Copernic Inc. Announces 2009 Second Quarter Results

QUEBEC CITY, CANADA--(Marketwire - Aug. 10, 2009) - Copernic Inc., (the "Company"), CNIC, a leading software development company in the technology sector, specializing in internet, desktop and mobile search products, today reported its financial results for the second quarter ended June 30, 2009 (Q2). Unless otherwise stated, all figures in this release are in US dollars. For comparison purposes, historical data has been re-casted to reflect the sale of Mamma.com and its Ad Network. Financial Highlights - Revenue from continuing operations was $0.4 million for Q2 2009, compared to $0.6 million in Q2 2008, a decline of 31,2% - Gross margin from continuing operations in Q2 2009 was 96,1% compared to 94,7% for Q2 2008 - Expenses from continuing operations in the second quarter of 2009 were at $1.2 million, compared to $1.3 million in the comparable period - Net loss from continuing operations of $0.7 million ($0.05 per share) for the second quarter 2009 compared to net loss of $0.6 million ($0.05 per share) in the second quarter 2008 - Net income from discontinued operations of $4.5 million ($0.31 per share) for Q2 2009, compared to $0.1 million ($0.01 per share) in Q2 2008 - Liquidities sufficient to meet normal operating requirements until end of Q2 2010 were at $4.8 million as of June 30, 2009, compared to $5.1 million as of December 31, 2008. Recent Highlights - Sold the assets of Mamma.com and its Ad Network which closed an important chapter in the history of the Company - Unveiled its new personal search portal called myCopernic that is designed to provide solutions for today's challenges: mobility and accessibility of personal data. It will also provide innovative solutions to search and access information that help professionals do business while being an integral part of the new Cloud Computing paradigm - Announced the availability of myCopernic on the Go! - the first service available from the myCopernic personal search portal. myCopernic on the Go! offers the end-user an intelligent solution to search and access relevant information from virtually anywhere, using any internet enabled device or wireless handset - Announced that it intends to seek shareholder approval to complete a share consolidation on the basis of one (1) post consolidation common share for every two (2) to ten (10) pre-consolidation shares. The exact consolidation factor will be determined at the discretion of the board of directors "The asset sale of Mamma.com and its Ad Network was successfully completed at the end of the quarter. Management continues its cost restructuring programs to size its remaining business particularly when faced with the realities of poor sales growth due to the continued unfavourable economic environment", stated Marc Ferland President and CEO of Copernic. Financial Results for the quarter ended June 30, 2009 Revenues from continuing operations in the second quarter of 2009 totaled $413,000, down from $600,000 in the second quarter of 2008 mainly due to a decline in software licensing revenues. Revenues in Q2 2009 were lower than Q1 2009 by $100,000. Gross margin from continuing operations in Q2 2009 was 96,1% compared to 94,7% for Q2 2008. Expenses in the second quarter of 2009 were at $1,153,000, compared to $1,271,000. The difference is mainly due to the continued cost reduction program. Net loss from continuing operations in the second quarter 2009 was $703,000 ($0.05 per share), compared to a net loss of $634,000 ($0.05 per share) in the same quarter 2008. Net income from discontinued operation in the second quarter 2009 was $4,471,000 ($0.31 per share), compared to $112,000 ($0.01 per share) in the same quarter 2008. The company sold the assets of Mamma.com and its Ad Network. The discontinued operation generated a net income of $281,000 in Q2 2009 compared to $112,000 for the same period last year, since public reporting costs and associated consulting fees have been reported in continuing operations in their entirety. The transaction generated a gain on a disposal of assets of $4,190,000. Net income in the second quarter 2009 was $3,768,000 ($0.26 per share), compared to a net loss of $522,000 ($0.04 per share) in the same quarter 2008. Liquidities totaled $4,767,000 which was a decrease of $406,000 from March 31, 2009. During Q2 2009, the Company paid its Directors & Officers Insurance for the current year, audit, legal fees and other costs related to 2008 year-end. Liquidities including temporary investment of $4,000,355 should be entirely available by the end of Q3 2009. About Copernic Inc. Copernic Inc. specializes in developing, marketing and selling cutting-edge search technology, providing innovative home and business software products and solutions for desktop, web and mobile users, through its online properties www.copernic.com. More information can be found at www.copernic.com. Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that can cause actual results to differ materially from estimated results. Such risks and uncertainties are detailed in the Company's filings with the Securities and Exchange Commission and the Ontario Securities Commission. The Company expressly disclaims any intent or obligation to update any description of the scope, focus or subject matter of the statements in this press release. /T/ Copernic Inc. Condensed Consolidated Balance Sheets ------------------------------------------------------------------------- (unaudited) (expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada) As at As at June 30, December 31, 2009 2008 $ $ Assets Current assets Cash and cash equivalents 766,782 2,067,705 Temporary investments 4,000,355 3,005,227 Accounts receivable 667,665 907,560 Income taxes receivable 204,785 110,121 Balance of sale receivable 1,473,055 - Prepaid expenses 252,768 170,864 ------------------------------------------------------------------------- 7,365,410 6,261,477 Balance of sale receivable 2,974,175 - Property and equipment 168,243 240,094 Intangible assets 557,775 918,485 Goodwill 3,362,003 3,362,003 ------------------------------------------------------------------------- 14,427,606 10,782,059 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 1,102,487 991,142 Deferred revenue 131,137 156,789 Deferred rent 2,706 4,805 Current portion of obligations under capital lease 64,021 57,267 ------------------------------------------------------------------------- 1,300,351 1,210,003 ------------------------------------------------------------------------- Obligations under capital lease 9,401 39,992 Future income taxes 152,497 259,848 ------------------------------------------------------------------------- Commitments Shareholders' Equity Capital stock Authorized Unlimited common shares, no par value Issued and outstanding 14,637,531 common shares 96,556,485 96,556,485 Additional paid-in capital 5,802,254 5,747,028 Accumulated other comprehensive income 561,137 561,137 Accumulated deficit (89,954,519) (93,592,434) ------------------------------------------------------------------------- 12,965,357 9,272,216 ------------------------------------------------------------------------- 14,427,606 10,782,059 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Copernic Inc. Condensed Consolidated Statements of Operations ------------------------------------------------------------------------- (unaudited) (expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada) For the six months ended For the three months ended June 30, June 30, ------------------------------------------------------------------------- 2009 2008 2009 2008 $ $ $ $ Revenues 926,790 1,027,269 413,360 599,557 ------------------------------------------------------------------------- Cost of revenues 29,443 63,483 16,243 31,489 ------------------------------------------------------------------------- Gross Margin 897,347 963,786 397,117 568,068 ------------------------------------------------------------------------- Expenses Marketing, sales and services 285,150 260,606 120,912 36,065 General and administration 1,146,610 1,616,580 531,932 674,370 Product development and technical support 556,941 1,047,499 280,367 288,729 Amortization of property and equipment 54,231 65,167 28,235 32,691 Amortization of intangible assets 355,864 490,253 178,106 245,233 Restructuring charges 25,622 - 5,210 - Interest and other income (23,682) (99,869) (9,263) (21,382) Gain on disposal of an investment (169,239) - - - Loss (gain) on foreign exchange 10,008 (28,041) 17,993 15,693 ------------------------------------------------------------------------- 2,241,505 3,352,195 1,153,492 1,271,399 ------------------------------------------------------------------------- Loss from operations before income taxes and discontinued operations (1,344,158) (2,388,409) (756,375) (703,331) Current income taxes 1,498 8,622 - 3,356 Recovery of future income taxes (107,351) (145,301) (53,676) (72,651) ------------------------------------------------------------------------- Net loss from continuing operations (1,238,305) (2,251,730) (702,699) (634,036) Net income from discontinued operations 4,876,220 643,140 4,470,784 111,637 Net income (loss) for the period 3,637,915 (1,608,590) 3,768,085 (522,399) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted loss from continuing operations per share (0.08) (0.15) (0.05) (0.05) Basic and diluted earnings (loss) per share 0.25 (0.11) 0.26 (0.04) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares outstanding Basic 14,637,531 14,637,531 14,637,531 14,637,531 Diluted 14,639,886 14,637,531 14,645,816 14,637,531 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Copernic Inc. Condensed Consolidated Statements of Cash Flows ------------------------------------------------------------------------- (unaudited) (expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada) For the six months ended For the three months ended June 30, June 30, ------------------------------------------------------------------------- 2009 2008 2009 2008 $ $ $ $ Cash flows from (used for) Operating activities Loss from continuing operations (1,238,305) (2,251,730) (702,699) (634,036) Adjustments for Amortization of property and equipment 54,231 65,167 28,235 32,691 Amortization of intangible assets 355,864 490,253 178,106 245,233 Employee stock- based compensation 55,226 11,662 29,681 (428) Future income taxes (107,351) (145,301) (53,676) (72,651) Gain on disposal of an investment (169,239) - - - Unrealized loss (gain) on foreign exchange 3,706 (2,431) 5,744 3,753 Net change in non- cash working capital items 41,371 (725,997) (165,588) (1,027,962) ------------------------------------------------------------------------- Cash and cash equivalent used for operating activities from continuing operations (1,004,497) (2,558,377) (680,197) (1,453,400) ------------------------------------------------------------------------- Investing activities Net change in cash and cash equivalents from discontinued operations 583,704 681,080 303,092 250,008 Proceeds on the disposal of an investment 169,239 - - - Purchase of intangible assets (3,224) (5,056) (2,622) - Purchase of property and equipment (23,474) (7,785) (12,549) (5,920) Net decrease (increase) in temporary investments (995,128) 3,965,384 6,208 - ------------------------------------------------------------------------- Cash and cash equivalents from (used for) investing activities (268,883) 4,633,623 294,129 244,088 ------------------------------------------------------------------------- Financing activities Repayment of mobligations under capital lease (27,543) (28,470) (14,056) (15,464) ------------------------------------------------------------------------- Cash and cash equivalent used for financing activities (27,543) (28,470) (14,056) (15,464) ------------------------------------------------------------------------- Net change in cash and cash equivalents during the period: (1,300,923) 2,046,776 (400,124) (1,224,776) Cash and cash equivalents - Beginning of period 2,067,705 2,907,028 1,166,906 6,178,580 ------------------------------------------------------------------------- Cash and cash equivalents - End of period 766,782 4,953,804 766,782 4,953,804 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash and cash equivalents comprise: Cash 466,694 1,252,811 466,694 1,252,811 Short-term investments 300,088 3,700,993 300,088 3,700,993 ------------------------------------------------------------------------- 766,782 4,953,804 766,782 4,953,804 /T/