[Comtex Letterhead]
Release: IMMEDIATE
For: Comtex News Network
Contact: Amber Gordon (Symbol: CMTX)
703-820-2000
COMTEX REPORTS 3RD QUARTER FISCAL 2004 FINANCIAL RESULTS
ALEXANDRIA, VA, May 17, 2004 - Comtex News Network, Inc., (OTC BB: CMTX), a
leading wholesaler of electronic real-time news and content, today announced the
financial results for the three and nine-month periods ended March 31, 2004.
For the quarter ended March 31, 2004, the Company reported an operating
loss of $26,000 and a net loss of $68,000, or $0.00 per share, versus last
year's third quarter operating loss of $107,000 and net loss of $135,000, or
$0.01 loss per share. The decreased operating and net losses are primarily due
to decreased operating expenses, particularly in the area of general and
administrative costs. For the third quarter of fiscal 2004, revenues were $2
million compared to $2.3 million for the third quarter of fiscal 2003. The
decline in revenues resulted primarily from business closures and continuing
consolidation among clients.
Revenues for the nine months ended March 31, 2004 were $6.1 million,
the operating loss was $1,263,000 and the net loss was $1.4 million, or $0.10
loss per share. Revenues for the prior year nine-month period were $7.1 million,
the operating loss was $122,000 and the net loss was $220,000, or a loss of
$0.02 per share. As with the quarter, the decline in revenues resulted primarily
from business closures and continuing consolidation among clients.
Operating expenses for the current nine-month period include the costs
of a terminated operating lease and data center move including the disposal of
assets, and, in the comparable period of the prior year, include the recovery of
accrued legal fees of $394,000 related to a favorable litigation settlement. The
recovery of those legal fees reduced the prior year expenses in comparison to
this year. Excluding the expenses associated with the terminated lease and legal
expense recovery, operating expenses for the nine-month period decreased
$777,000, or 16%, from the comparable prior year period.
The terminated operating lease had $2.6 million in remaining lease
obligations and was terminated for $478,000 in settlement-related expenses and
additional rent payments. As a result of the lease termination, the Company
reduced its leased office expense to $11,000 per month from $40,000 per month, a
decrease of 73%.
Comtex's Chairman and Interim CEO, C.W. Gilluly, stated, "Comtex
management is working to control costs while focusing on the strategic tasks of
developing new business and creating new, economically useful news and
information products for our clients."
MORE...
Comtex: Reports 3rd Quarter FY 2004 Results Page 2
May 17, 2004
About Comtex
Comtex is a leading wholesaler of real-time news and related content for the
world's leading financial and business information distributors. With a
specialization in economically useful news and information, Comtex receives,
enhances, combines, filters and distributes news and content received from more
than 10,000 national and international news bureaus, agencies and publications.
The resulting news and content products - with embedded stock tickers, key
words, standardized metadata, uniform formatting and custom filters - are all
designed to meet the exacting standards required by investment professionals.
More information on the company can be found at www.comtex.com.
Financial Table Follows
MORE...
Comtex: Reports 3rd Quarter FY 2004 Results Page 3
May 17, 2004
Comtex News Network, Inc.
Selected Financial Data
(unaudited)
(amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended
March 31 March 31
--------------------- ---------------------
2004 2003 2004 2003
---- ---- ---- ----
Revenues $ 1,962 $ 2,287 $ 6,149 $ 7,149
Operating Loss (26) (107) (1,263) (122)
Net Loss $ (68) $ (135) $ (1,355) $ (220)
-------- -------- -------- --------
Net Loss Per Share
Basic and Diluted $ (0.00) $ (0.01) $ (0.10) $ (0.02)
-------- -------- -------- --------
Weighted Avg. # Shares:
Basic and Diluted 13,588 13,227 13,560 13,170
-------- -------- -------- --------
Reconciliation to EBITDA:
Net Loss $ (68) $ (135) $ (1,355) $ (220)
Stock-based compensation 16 -- 68 2
Depreciation & Amortization 197 304 679 911
Interest/Other Expense 42 27 92 97
Income Taxes -- -- -- --
-------- -------- -------- --------
EBITDA $ 187 $ 196 $ (516) $ 790
Please Note: EBITDA is not a term defined by generally accepted accounting
principles, and as a result, our measure of EBITDA might not be comparable to
similarly titled measures used by other companies. However, we believe that
EBITDA is relevant and useful information, which is often reported and widely
used by analysts, investors and other interested parties in our industry.
Accordingly, we are disclosing this information to permit a more comprehensive
analysis of our operating performance.
Also note, except for the historical information contained herein, this press
release contains forward-looking statements within the meaning of Section 21E of
the Securities and Exchange Act of 1934, as amended, that involve a number of
risks and uncertainties. These forward-looking statements may be identified by
reference to a future period by use of forward-looking terminology such as
"anticipate," "expect," "could," "intend," "may" and other words of a similar
nature. These statements involve risks and uncertainties that could cause actual
results to differ materially from those contemplated herein, including the
occurrence of unanticipated events or circumstances relating to the fact that
Comtex is in a highly competitive industry subject to rapid technological,
product and price changes. Other factors include the possibility that demand for
the Company's products may not occur or continue at sufficient levels, changing
global economic and competitive conditions, technological risks and other risks
and uncertainties, including those detailed in the Company's filings with the
Securities and Exchange Commission. Comtex undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
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