Stockhouse Inc.
TSX VENTURE : SHC
OTC Bulletin Board : STKH

Stockhouse Inc.

April 02, 2009 09:01 ET

Stockhouse® Reports 2008 Results

NEW YORK, NEW YORK--(Marketwire - April 2, 2009) - Stockhouse, Inc. (OTCBB:STKH)(TSX VENTURE:SHC) today announced financial results for the fourth quarter and year ended December 31, 2008. The Company's 10K has been filed on EDGAR and SEDAR. A conference call and webcast will be held today at 4:05 PM EDT to discuss the results. All results are reported in US Dollars under accounting principles generally accepted in the United States of America (US GAAP).

Stockhouse® revenues for the fourth quarter of 2008 were $2.5 million and $11.81 million for the year, a decrease of 35% over Q4, 2007 and 17% percent year over year. The decline in revenue has been affected primarily by a decline in advertising revenue and our legacy pager revenue as well as the strengthening of the US dollar against the Canadian dollar and Euro of which the majority of our revenue is generated.

Stockhouse achieved significant progress in cost reductions in the 4th quarter. Total operating expenses for Q4, 2008 were $2.0 million compared to $3.5 million in Q4, 2007, an improvement of 43%. Total direct cost of revenues for the quarter were $945,000 compared to $1.4 million in Q4, 2007, an improvement of 33% and a decrease of 31% over Q3, 2008.

The Company's Q4, 2008 EBITDA(1) loss improved 57% to $465,000 in Q4, 2008 from $1.1 million in Q4, 2007. Q4, 2008 EBITDA(1) loss improved 74% over Q3, 2008. The Company's net loss improved 42% from $633,000 in Q4, 2008 compared to $1.1 million in Q4, 2007.

"The decline in the stock market and global recession has had a significant impact on our advertising revenue, which declined 46% in Q4, 2008 as compared to Q4, 2007," stated Marcus New, CEO. "At the beginning of October the company announced and undertook a further cost reduction program which reduced our staff by 27%, primarily in our media business. This accelerated our ongoing cost reduction initiative that began in the first quarter and included; eliminating redundant third party vendors, consolidating production systems, closing our Spain office and consolidating our financial operations. These initiatives have led to a 43% reduction in operating expenses over Q4, 2007 and 28% over Q3, 2008. As a part of our ongoing effort, our total direct costs decreased 32% from Q4, 2008 over Q3, 2008."

Mr. New continued, "This quarter we launched our new global mobile platform and completed the integration of our mobile acquisition into the new platform saving us significant costs going forward. In addition, we signed one new mobile reseller, and launched Ticker Trax, a new paid subscription information product targeting individual investors distributed through Stockhouse."



Q4 (unaudited) YTD (audited)
Actual Actual
2008 2007 2008 2007
Revenue

Licensing and Subscription 1,891 2,761 9,210 10,170

Advertising Services 610 1,100 2,600 3,978
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Total Revenue 2,501 3,861 11,810 14,148
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Total Direct Costs (2) 945 1,398 5,236 5,986
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Operating Expenses (3) 2,021 3,547 12,209 12,894
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EBITDA (1) (465) (1,084) (5,635) (4,732)
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Net Income (Loss) (633) (1,099) (6,546) (5,133)
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EPS (0.02) (0.03) (0.16) (0.13)
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Cash 859 2,821 859 2,821
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Traffic to Stockhouse

During Q4, the company reports an average of 637,000 unique visitors and 6.32 minutes average time spent per user.

Stockhouse launches new global mobile platform Stockstream Mobile

The company launched its new mobile platform and service Stockstream Mobile. Stockstream Mobile is a full featured application for BlackBerry smart phones designed to stream real-time financial information to individual investors. Stockstream Mobile provides the individual investor with live data and news from Reuters, the world's most reliable provider of financial information.

Stockstream Mobile, a powerful tool for the global investor, offers:

- Global market data and news

- Data on equities, options, futures, forex and indices

- Price and news alerts providing immediate notice of changes or news

Conference Call and Web cast

To participate in the conference call scheduled for 9:00am EDT April 1st, please call (888) 245-0960 / International (913) 312-1484 five to ten minutes prior to the start time. To listen to the live web cast, please go to www.stockgroup.com.

The earnings call will be recorded and accessible on our website for a period of one month. Participants intending to access the web cast should have Windows Media® Player installed prior to connecting to the call.

(1) EBITDA - Earnings (Loss) Before Interest, Taxes, Depreciation and Amortization is a non-GAAP measure that does not have a standardized meaning and may not be comparable to similar measures disclosed by other issuers. This measure does not have a comparable US GAAP measure. EBITDA is calculated as Income (Loss) from operations less depreciation, amortization, impairment of goodwill and intangible assets, interest income and provision for income tax.

(2) Total Direct Costs - Total Direct costs is a non GAAP measurement used by the Company to describe the direct data feed and bandwidth costs associated with providing the revenue.

(3) Operating Expenses - Operating expenses is a non GAAP measurement used by the Company to describe costs that are incurred to operate the Company and that have been incurred to provide the revenue and consists of sales and marketing expenses, research and development expenses and general and administrative expenses.

About Stockhouse, Inc.

Stockhouse is a leading financial media company focused on user generated content and collaborative technologies. The Stockhouse platform for web-based portfolio management and financial content is licensed to top North American brokerage firms and media companies. This platform is also extended through Stockhouse.com, a leading online financial portal owned and operated by Stockhouse, Inc. Stockhouse.com is home to Bullboards message board - Canada's largest community of active investors. Recognized for its engaged audience, Stockhouse.com provides a sought-after demographic for advertisers.

Legal notice regarding Trademarks

"Stockgroup", "Stockhouse" and "Bullboards" are either registered trademarks or trademarks of Stockhouse, Inc. (formerly Stockgroup Information Systems Inc.) and/or its affiliated companies in Canada, the United States and/or other countries.

"Microsoft", "Windows" and "Windows Media" are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

The BlackBerry and RIM families of related marks, images and symbols are the exclusive properties and trademarks of Research In Motion Limited.

Other names may be trademarks of their respective owners.

Legal notice regarding Forward Looking Statements

This release contains "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this document include, but are not limited to, statements that: (i) Stockhouse's new "Reputation analytics" system works to solve the quality and relevancy problem associated with user generated content; (ii) Stockhouse believes it is at the leading edge of being able to serve citizen journalist contributors and filter the highest quality content to create a new community news feed on the stock market; (iii) the addition of reputation analytics, collaborative tools, citizen journalism and social networking features for investors to the Stockhouse website will further position Stockhouse as a leader in online financial media. Factors which could delay or prevent these forward looking statements from being achieved include that our product offerings may present greater technical challenges than anticipated, causing delays or preventing features we intend to offer; that competitors may offer better or cheaper alternatives to our products; we may lose key employees; we may not have sufficient capital to fund our plans; and that the market for our products may not grow. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this press release. In addition, this release should be read in conjunction with the Company's current periodic reports which are on file with the SEC and available at the SEC website at www.sec.gov. Stockhouse undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. All forward looking statements are qualified in their entirety by this cautionary statement.

To find out more about Stockhouse, Inc. (OTCBB: STKH, TSX-V: SHC), visit our website at www.stockgroup.com.



STOCKHOUSE, INC.
(formerly Stockgroup Information Systems Inc.)

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of U.S. Dollars, except number of common shares)

As at December 31,
2008 2007
-------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 728 $ 2,821
Restricted cash 131 -
Accounts receivable (net of allowance of $347 and $456) 1,327 1,906
Prepaid and other current assets 253 752
-------- --------
TOTAL CURRENT ASSETS 2,439 5,479

Property and equipment, net 555 703
Goodwill - 99
Intangible assets, net 208 1,530
-------- --------
TOTAL ASSETS $ 3,202 $ 7,811
-------- --------
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,561 $ 1,818
Accrued liabilities 2,085 2,824
Deferred revenues 711 1,341
Debentures 545 -
Capital lease obligations 78 190
-------- --------
TOTAL CURRENT LIABILITIES 4,980 6,173

Long-term capital lease obligations 4 66
Long term payable - 41
Long-term deferred revenues 103 15
-------- --------
TOTAL LIABILITIES 5,087 6,295
-------- --------
Shareholders' (Deficiency) Equity

Preferred stock
Series A convertible, $1,000 per share
authorized 5,000,000 shares
issued and outstanding 3,000 shares 2,969 -

Common stock, no par value:
authorized 75,000,000 shares
issued and outstanding 41,295,922 and 40,916,921 shares 18,910 18,902
Additional paid-in capital 3,820 3,652
Accumulated deficit (27,584) (21,038)
-------- --------
TOTAL SHAREHOLDERS' (DEFICIENCY) EQUITY (1,885) 1,516
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
(DEFICIENCY) EQUITY $ 3,202 $ 7,811
-------- --------
-------- --------


STOCKHOUSE, INC.
(formerly Stockgroup Information Systems Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in thousands of U.S. Dollars, except per share data)

For the years
ended December 31,
2008 2007
-------- --------
REVENUES
Licensing and subscriptions $ 9,210 $ 10,170
Advertising services 2,600 3,978
-------- --------
TOTAL REVENUES 11,810 14,148
OPERATING COSTS AND EXPENSES
Cost of revenues (exclusive of amortization) 5,236 5,986
Sales and marketing 4,403 4,869
Research and development 1,434 1,925
General and administrative 6,372 6,100
Amortization of intangible assets 389 505
Impairment of goodwill 99 -
Impairment of intangible assets 889 -
-------- --------
TOTAL OPERATING EXPENSES 18,822 19,385
-------- --------

Loss from operations (7,012) (5,237)
Interest and other expense (income), net (461) (107)
-------- --------
Loss before income taxes (6,551) (5,130)
(Recovery of) Provision for income taxes (5) 4
-------- --------
Net loss and comprehensive loss $ (6,546) $ (5,134)
-------- --------
-------- --------
Net loss per common share:
Basic and diluted $ (0.16) $ (0.13)
-------- --------
Common shares used in computing basic and diluted net
loss per share (thousands) 41,301 39,264
-------- --------


STOCKHOUSE, INC.
(formerly Stockgroup Information Systems Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of U.S. Dollars)

For the years
ended December 31,
2008 2007
-------- --------
Operating activities:
Net loss $ (6,546) $ (5,134)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of property and equipment 340 446
Amortization of intangible assets 389 505
Impairment of goodwill 99 -
Impairment of intangible assets 889 -
Stock-based compensation 177 216
Gain on write off of account payable (44) -
Gain on sale of shares in Stockscores (75) -
Changes in non-cash working capital (531) 1,532
-------- --------
CASH USED IN OPERATING ACTIVITIES (5,302) (2,435)
-------- --------
Investing activities:
Purchases of property and equipment (192) (324)
Proceeds on sale of shares in Stockscores 75 -
Acquisition of Mobile Finance Division - (348)
Acquisition of Semotus assets (50) (238)
Restricted cash (131) -
-------- --------
CASH USED IN INVESTING ACTIVITIES (298) (910)
-------- --------
Financing activities:
Proceeds on exercise of stock options 167 182
Proceeds on issuance of preferred shares, net of costs 2,969 -
Proceeds on debentures, net of costs 545 -
Proceeds on private placements, net of costs - 4,129
Repayment of capital lease obligations (174) (158)
-------- --------
CASH PROVIDED BY FINANCING ACTIVITIES 3,507 4,153
-------- --------

Net (decrease)increase in cash and cash equivalents (2,093) 808
Cash and cash equivalents, beginning of the year 2,821 2,013
-------- --------
Cash and cash equivalents, end of the year $ 728 $ 2,821
-------- --------
-------- --------

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