Stockhouse Inc.
TSX VENTURE : SHC

Stockhouse Inc.

November 30, 2009 19:20 ET

Stockhouse® Reports Q3 2009 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 30, 2009) - Stockhouse Inc. (TSX VENTURE:SHC) today announced financial results for the third quarter ended September 30, 2009. All results are reported in US Dollars under accounting principles generally accepted in the United States of America (US GAAP).

Stockhouse revenues for the third quarter of 2009 were $1.57 million, a decrease of 38% from the three months ended September 30, 2008. Nine month revenues were $5.9 million, a decrease of 37% from the nine months ended September 30, 2008. Revenues were primarily impacted by the shutdown of the pager product line, reduction of the European wireless business, and the continuing impact of lower advertising revenue.

Stockhouse continued to reduce costs this quarter by restructuring its mobile division, shutting down our UK office, and continuing to negotiate with vendors. Cost of revenues decreased 52% from $1.39 million to $655 thousand and total operating expenses decreased 51% from $2.9 million to $1.4 million during Q3, 2009 over Q3, 2008. The Company had an EBITDA loss of $513,602 for the quarter a decrease of 71% or $1.23 million over 2008.

"The financial crises and recession have been very challenging for Stockhouse over the past year. We believe the worst is now behind us. We have sold or restructured poorly performing product lines, substantially reduced our expenses, continue to negotiate settlements with vendors, and have focused the business on our core of delivering high value products and services to the bank, brokerage and media marketplaces," stated Marcus New, CEO.

Mr. New continued, "Subsequent to quarter end we sold our media business for C$728 thousand to a private investor group. The sale reflects our desire to exit a business in which revenue had fallen from a peak of $1.1 million per quarter to a low of $295 thousand in this last quarter. The financial services, automotive and small public company advertisers have been impacted by the recession which has created significant challenges for the company and a sharp decline in our advertising revenues. By successfully selling our media business, we further reduced our cost structure, increased our working capital and we signed a $2 million dollar five year licensing agreement in the core business going forward."



Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
-----------------------------------------------------
Licensing and
subscriptions $ 1,273,614 $ 2,127,453 $ 4,719,599 $ 7,318,715
Advertising
services 295,387 416,719 1,187,223 1,990,320
-----------------------------------------------------
Total revenues $ 1,569,001 $ 2,544,172 $ 5,906,822 $ 9,309,035

Cost of revenues
(exclusive of
amortization) $ 655,333 $ 1,379,836 $ 2,741,783 $ 4,290,509
Total Operating
Expenses (1) 1,427,270 2,910,061 4,799,777 10,111,061
-----------------------------------------------------
EBITDA (2) $ (513,602) $(1,745,725) $(1,634,738) $(5,092,535)
-----------------------------------------------------
-----------------------------------------------------

Net loss $ (832,212) $(1,714,292) $(2,185,982) $(5,918,913)
-----------------------------------------------------
-----------------------------------------------------

EPS $ (0.02) $ (0.04) $ (0.05) $ (0.14)
-----------------------------------------------------
-----------------------------------------------------

Cash $ 297,836 $ 728,693 $ 297,836 $ 728,693
-----------------------------------------------------
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(1) 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.

(2) 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.


About Stockhouse Inc.

Stockhouse is a leading provider of private labeled financial content and software solutions to media, corporate, and financial services companies. Stockgroup employs proprietary technologies which enable its clients to provide financial data streams and news combined with cutting edge fundamental, technical, productivity, and disclosure tools to their customers, shareholders, and employees at a fraction of the cost of traditional internal methods. The Stockhouse platform for web-based portfolio management and financial content is licensed to top North American brokerage firms and media companies.

Legal notice regarding Forward Looking Statements

This release contains "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact and may be "forward looking statements". 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 release include that Stockhouse expects to lose approximately $1.3 million in annual revenue following the closing of the sale of its media assets. Readers are cautioned that actual future operating results and economic performance of the Company are subject to a number of risks and uncertainties, including general economic, market and business conditions and could differ materially from what is currently expected. More information about potential risk factors that could affect our business is included in our 10-K annual report for the year ended December 31, 2008, as amended, and our quarterly reports and other periodic filings filed from time to time and available publicly at www.sec.gov and www.sedar.com. Stockhouse undertakes no obligation and does not intend to update these forward looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this press release. All forward looking statements are qualified in their entirety by this cautionary statement.

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



UNAUDITED CONSOLIDATED BALANCE SHEETS

As at
September 30, December 31,
2009 2008
---------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 297,836 $ 728,693
Restricted cash - 130,733
Accounts receivable (net of allowance of
$659,344) 694,315 1,326,630
Prepaid expenses and other current assets 212,030 252,648
-----------------------------
TOTAL CURRENT ASSETS $ 1,204,181 $ 2,438,704
Property and equipment, net 363,282 554,676
Intangible assets, net - 207,998
-----------------------------
TOTAL ASSETS $ 1,567,463 $ 3,201,378
-----------------------------
-----------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 2,496,341 $ 1,560,582
Accrued liabilities 1,482,347 1,814,780
Deferred revenues 861,590 980,475
Debentures - 544,963
Capital lease obligations 11,146 78,427
-----------------------------
TOTAL CURRENT LIABILITIES $ 4,851,424 $ 4,979,227
Long-term capital lease obligations 597,323 3,995
Long-term deferred revenues 10,322 103,392
-----------------------------
TOTAL LIABILITIES $ 5,459,069 $ 5,086,614
-----------------------------
SHAREHOLDERS' DEFICIENCY
Preferred stock $ 2,968,821 $ 2,968,821
Series A convertible, $1,000 per share
authorized 5,000,000 shares issued and
outstanding 3,000 shares
Common Stock
authorized 75,000,000 shares,
no par value:
issued and outstanding 43,935,922 $ 19,030,161 $ 18,909,674
Additional paid-in capital 3,879,265 3,820,143
Accumulated deficit (29,769,853) (27,583,871)
-----------------------------
TOTAL SHAREHOLDERS' DEFICIENCY $ (3,891,606) $ (1,885,233)
-----------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIENCY $ 1,567,463 $ 3,201,381
-----------------------------
-----------------------------


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
------------------------------------------------------
REVENUES
Licensing and
subscriptions $ 1,273,614 $ 2,127,453 $ 4,719,599 $ 7,318,715
Advertising
services 295,387 416,719 1,187,223 1,990,320
------------------------------------------------------
TOTAL REVENUES $ 1,569,001 $ 2,544,172 $ 5,906,822 $ 9,309,035

OPERATING COSTS AND
EXPENSES
Cost of revenues
(exclusive of
amortization) $ 655,333 $ 1,379,836 $ 2,741,783 $ 4,290,509
Sales and marketing 271,208 1,062,683 1,033,403 3,718,661
Research and
development 43,617 355,880 275,937 1,107,584
General and
administrative 1,184,943 1,483,900 3,735,669 5,367,343
Amortization of
intangible assets 32,842 50,843 98,526 338,969
Impairment of
goodwill - - - 99,322
Impairment of
intangible assets 109,474 - 109,474 736,000
------------------------------------------------------
TOTAL OPERATING
EXPENSES $ 2,297,417 $ 4,333,142 $ 7,994,792 $ 15,658,388
------------------------------------------------------

Loss from operations $ (728,416) $ (1,788,970) $ (2,087,970) $ (6,349,352)
Interest and other
expense (income),
net 103,797 (82,704) 98,011 (440,015)
------------------------------------------------------
Net loss before
income taxes $ (832,213) $ (1,706,266) $ (2,185,981) $ (5,909,337)
Provision for income
taxes - 8,026 - 9,576
------------------------------------------------------
Net loss and
comprehensive loss $ (832,213) $ (1,714,292) $ (2,185,981) $ (5,918,913)
------------------------------------------------------
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Net loss per common
share:
Basic and diluted $ (0.02) $ (0.04) $ (0.05) $ (0.14)
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Common shares used
in computing basic
and diluted net loss
per share 43,935,922 41,297,000 43,935,922 41,295,922


Neither TSX Venture Exchange or its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Stockhouse Inc.
    Joe Lee
    Chief Financial Officer
    604.331.0995 | 1.800.650.1211
    www.stockgroup.com