Exhibit 99.1
Copernic Inc. Announces 2009 Fourth Quarter Results
Quebec City, Canada, March 26, 2010 - Copernic Inc., (the “Company”), (NASDAQ: 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 fourth quarter ended December 31, 2009 (‘‘Q4 2009’’). Unless otherwise stated, all figures in this release are in US dollars. For comparison purposes, comparative figures have been re-casted to reflect the sale of Mamma.com and its AD Network.
Financial Highlights
| § | Revenues from continuing operations were $0.37 million for Q4 2009, compared to $0.69 million for Q4 2008. Revenues from continuing operations for the year 2009 were $1.65 million, compared to $2.22 million for 2008. |
| § | Gross margin from continuing operations in Q4 2009 was 98% compared to 98% for Q4 2008. |
For the year 2009 gross margin from continuing operations was 96% compared to 95% for 2008.
| § | Expenses from continuing operations in the fourth quarter of 2009 were at $1.1 million, compared to $5.5 million in the comparable period in 2008, including write-downs of $4.3 million. Expenses from continuing operations for the year 2009 were at $4.5 million, compared to $10.5 million for the year 2008, including write-downs of $4.3 million. |
| § | Net loss in Q4 2009 was $0.7 million ($0.34 per share) compared to a net loss of $4.2 million ($2.04 per share) for the same period in 2008. Net income for the year 2009 was $2.1 million ($1.01 per share) compared to a loss of $6.5 million ($3.10 per share) for 2008. |
| § | Liquidities sufficient to meet normal operating requirements until end of 2010 were at $4 million as of December 31, 2009, compared to $5.1 million as of December 31, 2008. |
Recent Highlights
| § | As announced on February 12, 2010, Copernic Inc. amended the agreement signed on November 12, 2009, pursuant to which the Company will issue, by way of private placement, 500,000 shares at $4.00 per share for a total proceeds of $2,000,000. The amended agreement also proposes a purchase, by Copernic, of 70.1% of the common shares outstanding of Sunbay Canada Corporation (‘‘Sunbay’’), a company registered in Ontario. The Board of Directors of Sunbay will be comprised of three members elected by Copernic, one of which will be Mr. Marc Ferland, Chief Executive Officer of Copernic who will also hold this position for Sunbay. In addition, Newlook Industries Corporation and Sunbay Energy Corporation will each elect a representative. Based on this amended agreement, Copernic will issue 150,000 common shares in exchange of its equity position in Sunbay valued at $600,000 and 450,000 shares for cash of $1,400,000. The closing is scheduled no later than April 30, 2010. |
“Our sales shortfall compared to last year was the result of unfavorable economic conditions, particularly in corporate sales. Therefore we continued our rigorous cost reduction plan in an attempt to offset the sales shortfall and right size our operations as the result of the sale of our AD Network. Since December 2007, we have taken out $3.6 Million in operating expenses’’, stated Mr. Marc Ferland President and CEO of Copernic.
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 and www.mycopernic.com. With its award winning Copernic Desktop Search software search engine product, the Company brings the power of a sophisticated, yet easy-to-use search engine to the user's PC.
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.
FOR INFORMATION PLEASE CONTACT:
Copernic Inc.
Jean-Rock Fournier, CA
Executive Vice President and Chief Financial Officer
Telephone Toll Free: (877) 289-4682
Telephone: (418) 527-0528 ext. 1271
Email: jrfournier@copernic.com
Website: www.copernic.com
| Condensed Consolidated Balance Sheets | ||||||||
| As at December 31, 2009 and 2008 | ||||||||
| (expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada) | ||||||||
| 2009 | 2008 | |||||||
| $ | $ | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | 465,949 | 1,066,817 | ||||||
| Temporary investments | 3,504,930 | 4,006,115 | ||||||
| Accounts receivable | 256,110 | 907,560 | ||||||
| Income taxes receivable | 337,802 | 110,121 | ||||||
| Balance of sale receivable | 655,131 | - | ||||||
| Prepaid expenses | 118,149 | 170,864 | ||||||
| 5,338,071 | 6,261,477 | |||||||
| Balance of sale receivable | 3,694,060 | - | ||||||
| Property and equipment | 115,110 | 240,094 | ||||||
| Intangible assets | 202,597 | 918,485 | ||||||
| Goodwill | 3,362,003 | 3,362,003 | ||||||
| 12,711,841 | 10,782,059 | |||||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | 1,010,140 | 991,142 | ||||||
| Deferred revenue | 103,668 | 156,789 | ||||||
| Deferred rent | 1,534 | 4,805 | ||||||
| Current portion of obligations under capital leases | 50,630 | 57,267 | ||||||
| 1,165,972 | 1,210,003 | |||||||
| Obligations under capital leases | 7,906 | 39,992 | ||||||
| Future income taxes | 45,146 | 259,848 | ||||||
| Commitments | ||||||||
| Shareholders’ Equity | ||||||||
| Capital stock | ||||||||
| Authorized | ||||||||
| Unlimited number of common shares, no par value | ||||||||
| Issued and outstanding | ||||||||
| 2,091,437 common shares | 96,556,485 | 96,556,485 | ||||||
| Contributed Surplus | 5,853,737 | 5,747,028 | ||||||
| Accumulated other comprehensive income | 561,137 | 561,137 | ||||||
| Accumulated deficit | (91,478,542 | ) | (93,592,434 | ) | ||||
| 11,492,817 | 9,272,216 | |||||||
| 12,711,841 | 10,782,059 | |||||||
| Copernic Inc. | ||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| (expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada) | ||||||||
| For the twelve months ended | For the three months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Revenues | 1,653,026 | 2,218,264 | 372,943 | 693,467 | ||||||||||||
| Cost of revenues | 62,304 | 105,338 | 7,136 | 16,513 | ||||||||||||
| Gross Margin | 1,590,722 | 2,112,926 | 365,807 | 676,954 | ||||||||||||
| Expenses | ||||||||||||||||
| Marketing, sales and services | 625,243 | 386,486 | 193,312 | 72,239 | ||||||||||||
| General and administration | 2,329,947 | 2,907,964 | 566,536 | 525,309 | ||||||||||||
| Product development and technical support | 1,125,102 | 1,836,986 | 271,085 | 315,403 | ||||||||||||
| Amortization of property and equipment | 117,909 | 89,169 | 30,834 | 979 | ||||||||||||
| Amortization of intangible assets | 720,729 | 980,285 | 182,335 | 244,688 | ||||||||||||
| Write-downs and settlement costs | 10,924 | 4,381,840 | 10,924 | 4,381,840 | ||||||||||||
| Restructuring charges | 33,677 | 101,012 | 13,053 | 69,621 | ||||||||||||
| Interest and other income | (333,979 | ) | (162,880 | ) | (149,272 | ) | (40,306 | ) | ||||||||
| Gain on disposal of an investment | (169,239 | ) | - | - | - | |||||||||||
| Loss (gain) on foreign exchange | 70,772 | (24,440 | ) | 23,643 | (18,218 | ) | ||||||||||
| 4,531,085 | 10,496,422 | 1,142,450 | 5,551,555 | |||||||||||||
| Loss from continuing operations before income taxes and discontinued operations | (2,940,363 | ) | (8,383,496 | ) | (776,643 | ) | (4,874,601 | ) | ||||||||
| Current income taxes | 1,498 | 522 | - | (8,550 | ) | |||||||||||
| Future income taxes | (656,347 | ) | (854,914 | ) | (60,067 | ) | (306,410 | ) | ||||||||
| Recovery of income taxes | (654,849 | ) | (854,392 | ) | (60,067 | ) | (314,960 | ) | ||||||||
| Loss from continuing operations | (2,285,514 | ) | (7,529,104 | ) | (716,576 | ) | (4,559,641 | ) | ||||||||
| Results of discontinued operations, net of income taxes | 4,399,406 | 1,038,400 | 14,295 | 299,204 | ||||||||||||
| Net earnings (loss) for the year | 2,113,892 | (6,490,704 | ) | (702,281 | ) | (4,260,437 | ) | |||||||||
| Basic and diluted loss / share - continuing operations | (1.09 | ) | (3.60 | ) | (0.34 | ) | (2.18 | ) | ||||||||
| Basic and diluted earnings / share - discontinued operations | 2.10 | 0.50 | 0.01 | 0.14 | ||||||||||||
| Basic and diluted net earnings (loss) / share | 1.01 | (3.10 | ) | (0.34 | ) | (2.04 | ) | |||||||||
Copernic Inc.
Condensed Consolidated Statements of Cash Flows
(expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada)
| For the twelve months ended | For the three months ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||
| $ | $ | $ | $ | ||||||||||||
| Cash flows from (used for) | |||||||||||||||
| Operating activities | |||||||||||||||
| Loss from continuing operations | (2,285,514 | ) | (7,529,104 | ) | (716,576 | ) | (4,559,641 | ) | |||||||
| Adjustments for | - | - | |||||||||||||
| Amortization of property and equipment | 117,909 | 89,169 | 30,834 | 979 | |||||||||||
| Amortization of intangible assets | 720,729 | 980,285 | 182,335 | 244,688 | |||||||||||
| Employee stock-based compensation | 106,709 | 8,249 | 21,991 | (5,317 | ) | ||||||||||
| Write-down of goodwill | - | 3,995,000 | - | 3,995,000 | |||||||||||
| Write-down of intangible assets | 1,462 | 343,768 | 1,462 | 343,768 | |||||||||||
| Write-down of investment | - | - | - | - | |||||||||||
| Write-down of property and equipment | 9,462 | 43,072 | 9,462 | 43,528 | |||||||||||
| Gain on disposal of an investment | (169,239 | ) | - | - | - | ||||||||||
| Future income taxes | (656,347 | ) | (854,914 | ) | (60,067 | ) | (306,410 | ) | |||||||
| Accreted interest on balance of sale receivable | (200,823 | ) | - | (74,730 | ) | - | |||||||||
| Unrealized loss (gain) on foreign exchange | 10,529 | (25,201 | ) | 2,027 | (18,920 | ) | |||||||||
| Net change in non-cash working capital items | 130,297 | (391,011 | ) | (48,642 | ) | 439,726 | |||||||||
| Cash used for operating activities from continuing operations | (2,214,826 | ) | (3,340,687 | ) | (651,904 | ) | 177,401 | ||||||||
| Cash provided by discontinued operations | 1,051,219 | 1,620,116 | (18,104 | ) | 518,304 | ||||||||||
| Cash used for operations | (1,163,607 | ) | (1,720,571 | ) | (670,008 | ) | 695,705 | ||||||||
| Investing activities | |||||||||||||||
| Proceeds on the disposal of an investment | 169,239 | - | - | - | |||||||||||
| Purchase of intangible assets | (14,373 | ) | (5,054 | ) | (11,149 | ) | - | ||||||||
| Purchase of property and equipment | (30,627 | ) | (15,879 | ) | (1,730 | ) | (2,837 | ) | |||||||
| Net decrease (increase) in temporary investments | 3,005,227 | 960,157 | - | (3,005,227 | ) | ||||||||||
| Cash provided by (used for) continuing operations | 3,129,466 | 939,224 | (12,879 | ) | (3,008,064 | ) | |||||||||
| Cash used in discontinued operations | (579 | ) | - | 229,090 | - | ||||||||||
| Cash provided from (used for) investing activities | 3,128,887 | 939,224 | 216,211 | (3,008,064 | ) | ||||||||||
| Financing activities | |||||||||||||||
| Issuance of capital stock | - | - | - | - | |||||||||||
| Repayment of obligations under capital leases | (62,106 | ) | (57,976 | ) | (17,641 | ) | (14,075 | ) | |||||||
| Cash provided from (used for) financing activities | (62,106 | ) | (57,976 | ) | (17,641 | ) | (14,075 | ) | |||||||
| Net change in cash and cash equivalents during the period | 1,903,174 | (839,323 | ) | (471,438 | ) | (2,326,434 | ) | ||||||||
| Cash and cash equivalents – Beginning of the period | 2,067,705 | 2,907,028 | 4,442,317 | ) | 4,394,139 | ||||||||||
| Cash and cash equivalents – End of year | 3,970,879 | 2,067,705 | 3,970,879 | 2,067,705 | |||||||||||
| Cash and cash equivalents comprise: | |||||||||||||||
| Cash | 465,949 | 1,066,817 | 465,949 | 1,066,817 | |||||||||||
| Temporary investments | 3,504,930 | 4,006,115 | 3,504,930 | 4,006,115 | |||||||||||
| Less: temporary investments with maturity date in excess of 3 months from date of issuance | - | (3,005,227 | ) | - | (3,005,227 | ) | |||||||||
| 3,970,879 | 2,067,705 | 3,970,879 | 2,067,705 | ||||||||||||
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