MARINA DEL REY, CA , a leading Internet search marketing firm
that cost-effectively delivers web traffic via search optimized
text and video content, has announced financial results for its
third quarter ended September 30, 2007.
"Improvement in third quarter earnings is a direct result of our
repositioned products gaining traction in parallel with significant
expense rationalization. It put us back on the path to
profitability," said George Lichter, President and CEO, InfoSearch
Media. "We continue to focus on driving the growth of our core
business and will be opportunistic in looking to expand our
customer base as well as the breadth and depth of our offerings in
both organic and paid search."
Q3 Financial Summary
InfoSearch Media reported an operating loss of $0.29 million for
the quarter ended September 30, 2007, representing a decrease of
51% from the loss of $0.60 million in the third quarter of 2006.
Excluding a non-recurring, non-operating expense of $0.11 million,
the adjusted operating loss of $0.18 million was a decrease of 70%
from the third quarter of 2006 and 83% from the loss of $1.07
million in the second quarter of 2007.
-- The Company reported a GAAP net loss of $0.19 million, or ($0.00) per
share (basic and diluted), a decrease of 72% from $0.65 million or ($0.02)
per share (basic and diluted) for the third quarters ended 2007 and 2006,
respectively.
-- Cash on-hand increased by 12% to $0.64 million.
-- Revenues were $1.19 million for the third quarter, a decrease of 27%
compared to the third quarter of 2006 and an increase of 3% compared to the
second quarter of 2007. Third quarter 2006 revenues included non-recurring
revenues from a purchase of certain, pre-existing content by Demand Media.
Gross margins increased to 70% for the third quarter of 2007 as compared to
61% for the second quarter of 2007. Total operating expenses for the third
quarter of 2007 decreased 36% to $1.13 million from $1.78 million in the
second quarter of 2007.
-- New customer orders grew 48 percent over the first half of 2007. New
customer orders are an important leading indicator of revenues and exclude
recurring client backlog and advertising revenue from the Company's Web
Properties.
"The Company's 83% lower operating loss quarter over quarter
yielded sequential improvement in EPS to ($0.00) as well as a 12%
increase in cash on-hand. InfoSearch Media is now well-positioned
to grow its share of the expanding online advertising market," said
Scott Brogi, CFO of InfoSearch Media. "Accordingly, management
intends to purchase shares of the Company's common stock on the
open market as buying opportunities present themselves and our
insider trading policies permit."
Recent Company Highlights
-- Opening of Austin, Texas Sales Office -- In response to growing new
customer orders and an attractive local talent pool, the company opened a
small, regional sales office in Austin, Texas, in October.
-- Expansion of TrafficBuilder Text Product Line -- In response to
customer requests and feedback, the Company launched TrafficBuilder Text
TuneUp. A cost-effective solution for clients who want more traffic from
content they already have, TuneUp transforms existing web content by
applying best practices in search engine optimization in order to increase
its effectiveness in driving website traffic.
About InfoSearch Media
InfoSearch Media (http://www.InfoSearchMedia.com) is a leading
Internet search marketing company and the largest dedicated
provider of traffic-targeted online text and video content.
InfoSearch Media's network of professional writers, editors,
technical specialists and video producers helps businesses succeed
on the Web by implementing cost-effective Internet marketing
solutions designed to deliver more web traffic for customers of
every size. Whether a business needs more local traffic in 100
cities or is a content publisher with an ongoing need for fresh,
targeted Web content, InfoSearch Media offers the outsourced
solutions, capacity and reputation to help it win the audience it
needs on the Internet.
Safe Harbor Statement
This release contains "forward-looking statements" that involve
risks and uncertainties. Actual results may differ materially from
expectations discussed in such forward-looking statements.
Management assumes no obligation to comment on or provide an update
to its stock purchases or sales in the future except as
specifically required by law and by the Securities and Exchange
Commission. Factors that might cause such differences include, but
are not limited to the challenges of attracting new customers and
maintaining existing customers and developing, deploying and
delivering InfoSearch services; competition from existing and new
competitors; the ability to generate sufficient cash flow or
otherwise obtain funds to repay new or outstanding indebtedness;
the loss or decline in business from our key customers and other
risks described from time to time in InfoSearch's filings with the
Securities and Exchange Commission. In particular, see InfoSearch's
recent quarterly and annual reports filed with the Securities and
Exchange Commission, copies of which are available upon request
from InfoSearch. InfoSearch does not assume any obligation to
update the forward-looking information contained in this press
release.
INFOSEARCH MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2007 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 639,674 $ 2,495,655
Restricted cash 362,392 380,530
Accounts receivable 27,619 68,941
Due from related parties 16,309 50,732
Prepaid and other current assets 148,588 201,604
-------------- --------------
TOTAL CURRENT ASSETS 1,194,582 3,197,463
-------------- --------------
EMPLOYEE ADVANCE 4,500 1,000
CONTENT DEVELOPMENT - 4,082
PROPERTY AND EQUIPMENT, NET 142,117 131,139
SECURITY DEPOSIT 37,500 37,500
EQUITY WARRANT ASSET 122,573 308,837
-------------- --------------
TOTAL ASSETS $ 1,501,272 $ 3,680,020
-------------- --------------
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable 299,818 204,271
Accrued salaries and bonuses 74,393 206,145
Accrued expenses 290,245 458,423
Accrued expenses Answerbag acquisition - 75,156
Capital leases 459 17,621
Deferred revenue 606,292 454,741
Provision for refunds
payable/chargebacks 10,718 30,842
Current tax liability 1,250 -
-------------- --------------
TOTAL CURRENT LIABILITIES 1,283,174 1,447,200
CAPITAL LEASES, NET OF CURRENT PORTION - -
INCOME TAX PAYABLE 156,000 -
FAIR VALUE OF WARRANT LIABILITY 873,862 1,396,215
-------------- --------------
TOTAL LIABILITIES $ 2,313,037 $ 2,843,414
-------------- --------------
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, undesignated, par
value $.001per share, 25,000,000 shares - -
authorized; no shares issued and
outstanding;
Common stock, $.001 par value,
authorized 200,000,000 shares; 52,872 51,491
issued and outstanding 52,871,973
and 51,491,197, respectively
Committed stock, 0 and 164,282 shares - 22,586
Additional paid in capital 11,375,683 11,130,109
Accumulated deficit (12,240,320) (10,367,580)
TOTAL STOCKHOLDERS' EQUITY: (811,765) 836,606
-------------- --------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,501,272 $ 3,680,020
INFOSEARCH MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
NET SALES
Content $ 1,151,542 $ 1,278,964 $ 3,547,651 $ 4,822,700
Web Properties 38,517 339,978 109,266 1,281,984
----------- ----------- ----------- -----------
NET SALES 1,190,059 1,618,942 3,656,917 6,104,684
COST OF SALES
Content 342,606 319,295 1,242,534 1,407,803
Web Properties 9,420 84,876 41,641 785,907
----------- ----------- ----------- -----------
COST OF SALES 352,026 404,171 1,284,175 2,193,710
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
GROSS PROFIT 838,033 1,214,771 2,372,742 3,910,974
----------- ----------- ----------- -----------
OPERATING EXPENSES
General and
Administrative 681,368 1,342,991 3,052,837 8,590,268
Sales and Marketing 341,156 476,611 1,302,666 1,560,645
Other Expenses 110,000 - 110,000 -
----------- ----------- ----------- -----------
TOTAL OPERATING
EXPENSES 1,132,524 1,819,602 4,465,503 10,150,913
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (294,491) (604,831) (2,092,761) (6,239,939)
----------- ----------- ----------- -----------
CHANGE IN FAIR VALUE
OF WARRANTS 103,139 232,119 337,597 2,247,102
OTHER EXPENSES - - - (34,103)
INTEREST INCOME 10,389 12,315 46,513 66,832
INTEREST EXPENSE (7) (5,861) (1,165) (12,795)
----------- ----------- ----------- -----------
(LOSS) FROM CONTINUING
OPERATIONS BEFORE TAX (180,970) (366,258) (1,709,816) (3,972,903)
PROVISION FOR TAX FROM
CONTINUING OPERATIONS 4,050 7,200 6,925 23,353
----------- ----------- ----------- -----------
NET (LOSS) FROM
CONTINUING OPERATIONS (185,020) (373,458) (1,716,741) (3,996,256)
LOSS FROM DISCONTINUED
OPERATIONS, NET OF
TAXES
----------- ----------- ----------- -----------
Loss from
discontinued
operations of
Answerbag, Inc. - (276,784) - (383,870)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
NET (LOSS) $ (185,020) $ (650,242) $(1,716,741) $(4,380,126)
=========== =========== =========== ===========
(LOSS) PER SHARE FROM
CONTINUING
OPERATIONS -
BASIC $ (0.00) $ (0.01) $ (0.03) $ (0.09)
DILUTED (0.00) (0.01) (0.03) (0.09)
(LOSS) PER SHARE FROM
DISCONTINUED
OPERATIONS -
BASIC - (0.01) - (0.01)
DILUTED - (0.01) - (0.01)
(LOSS) PER SHARE
BASIC (0.00) (0.01) (0.03) (0.10)
DILUTED (0.00) (0.01) (0.03) (0.10)
WEIGHTED AVERAGE
SHARES OUTSTANDING -
BASIC 53,280,710 46,301,912 52,396,658 46,028,271
WEIGHTED AVERAGE
SHARES OUTSTANDING -
DILUTED 53,280,710 46,301,912 52,396,658 46,028,271
INFOSEARCH MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Period ended September 30,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) (1,716,741) (4,894,699)
Adjustment from Discontinued Operations - 383,870
Net Loss from Continuing Operations (1,716,741) (4,510,829)
---------- ----------
Adjustment to reconcile net income (loss) to
net cash used in operating activities
Depreciation and amortization 86,353 566,459
Equity based compensation 199,122 4,729,683
Loss from disposal of fixed assets - 9,396
Dispositions of assets associated with the
sale of AnswerBag - -
Liquidated damages - 509,904
Change in fair value of warrants (336,088) (2,247,102)
Gain on sales of Answerbag asset - -
Changes in assets and liabilities:
Accounts receivable 41,322 (158,756)
Due from related parties 34,423 -
Due from employee advances (3,500) -
Prepaid expenses and other current assets 52,163 (119,691)
Accounts payable, accrued expenses and other
liabilities (279,539) (6,620)
Income tax payable 1,250 -
Provision for refunds (20,124) 8,694
Deferred revenue 151,551 (2,245,937)
---------- ----------
Total adjustments (75,567) 1,046,030
NET CASH USED IN CONTINUING OPERATIONS (1,792,308) (3,464,799)
Net loss from Discontinued Operations - (383,870)
Change in Operating Assets Held for Sale from
Discontinued Operations - 29,125
---------- ----------
Net Cash Used in Discontinued Operations - (354,745)
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (1,792,308) (3,819,544)
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted Cash 18,139 -
Capital expenditures - fixed assets (68,250) (37,640)
Capital expenditures - content development - (49,361)
---------- ----------
NET CASH USED IN CONTINUING INVESTMENT ACTIVITIES (50,111) (87,001)
NET CASH USED IN DISCONTINUED INVESTMENT
ACTIVITIES - (479,888)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (50,111) (566,889)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of capital lease obligations (17,162) (24,269)
Warrants Exercised 3,600 -
---------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (13,562) (24,269)
Net increase (decrease) in cash and cash
equivalents (1,855,981) (4,410,702)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 2,495,655 4,828,560
---------- ----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 639,674 $ 417,858
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest $ 299 $ 12,795
========== ==========
Income tax paid (refunded) $ 3,875 $ 23,353
========== ==========
NON-CASH SUPPLEMENTAL DISCLOSURE OF INVESTING
AND FINANCING ACTIVITIES:
Stock issued or committed to be issued for the
acquisition of Answerbag $ - $ 462,499
========== ==========
Stock Issuances for Liquidated Damages $ - $ 509,904
========== ==========
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Contact: Investors Scott Brogi CFO 310.822.1103 Email Contact
Media Heather Gore Vice President 310.437.7562 Email Contact
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