April 18th, 2008
Breakeven Results for Third and Fourth Quarter; 2007 Earnings per Share Improves From ($0.09) to ($0.03)
MARINA DEL REY, CA--(MARKET WIRE)--Apr 18, 2008 -- InfoSearch Media, Inc. (OTC BB:ISHM.OB - News), a diversified search marketing firm delivering Web traffic via search-optimized text and video content, pay-per-click and SEO services, today reported financial results for its fiscal year ended December 31, 2007. Although revenues decreased 35.4% to $4.91 million for the fiscal year ended December 31, 2007, from $7.60 million the prior year, significant expense reductions resulted in the Company's net loss narrowing by 62% to $1.54 million in 2007, down from a loss of $4.04 million in 2006. As a result, the loss per share improved from ($0.09) to ($0.03).
This improvement resulted from breakeven results in earnings per share during the third and fourth quarter of $0.00 and $0.00, respectively. Improvements shown in the second half of 2007 resulted from a significant rationalization of the Company's business during the second quarter, which included the elimination of low-performing clients plus a corresponding reduction in Company headcount and expenses. Subsequently, revenues for the fourth quarter grew 5.3% to $1.25 million over the prior quarter. Total revenues were negatively impacted by the second quarter elimination of certain customer categories and decreased revenue from non-core Web properties, although much of this decline resulted primarily from the Company's FY 2006 extinguishment of that remaining deferred revenue accumulated during 2004 and early 2005.
"We recognized the need to qualify prospective clients into those positioned to benefit the most from our products and services, and have been targeting only those companies," said Scott Brogi, Chief Financial Officer. "This enabled InfoSearch to increase revenue over the third quarter, and coupled with further expense reductions, allowed the Company to achieve its first quarterly operating profit of fiscal 2007."
"The improvement to earnings over the second half of the year is a result of financial and operating discipline combined with a modest increase in revenue," said George Lichter, president and CEO, InfoSearch Media. "InfoSearch must now deliver higher growth rates; the Company is actively pursuing complementary search marketing opportunities which may require additional financing."
Q4 Financial Summary
InfoSearch Media reported an operating profit of $24,390 for the quarter ended Dec. 31, 2007, representing an improvement from the loss of $294,491 in the third quarter of 2007 and from the loss of $572,429 for the fourth quarter of 2006. Additionally:
- The Company reported a GAAP net profit of $180,432, or $0.00 per share (basic and diluted).
- Cash on-hand increased by 23.1% during the quarter, partly due to receipt of a one-time legal settlement.
2007 Financial Summary
InfoSearch Media reported an operating loss of $2.07 million for the year ended Dec. 31, 2007, representing an improvement of 69.6% from the operating loss of $6.81 million during the year ended Dec. 31, 2006.
Revenues from FY 2007, as compared to FY 2006, decreased 35.4% to $4.91 million from $7.60 million. Revenues were negatively impacted by:
- A reduction in TrafficBuilder revenues as a result of the Company's
decision during the second quarter to eliminate sales to those lower-performing customers. - A reduction of non-core Web Properties of $126,236 in 2007 versus $1,583,980 in 2006. This decline was primarily a result of $1,354,055 in deferred revenue being relieved from the balance sheet for which cash had been received in 2004 and early 2005. The actual monetized revenue decreased by only $103,689 to $126,236 in 2007 from $229,925 in 2006.
As part of its review, the Company's auditors raised an issue related to the Company's ability to continue as a going concern. The Company discussion of this can be found in its 10-KSB as follows:
"Although the Company reduced its net loss to $4,588 for the second half of the year by significantly lowering operating expenses and has increased cash to $787,239 as of December 31, 2007, the Company has historically experienced recurring net losses and negative cash flows from operations... the Company's ability to continue as a going concern is contingent upon its ability to ultimately maintain profitable operations or secure additional financing. Management believes that its current and future plans provide an opportunity to continue as a going concern."
Recent Company Highlights
- PPC campaign management - During the first quarter of 2008, and in response to customer requests for a one-stop solution to their Internet marketing needs, InfoSearch Media began offering PPC campaign management along with landing page optimization engineered to produce higher customer conversions. PPC and other SEM marketing products currently represent the largest percentage of all Internet advertising and, according to a recent study by SEMPO, account for $10.6 billion or 87% of overall Internet spending in 2007. Offering PPC campaign management in combination with the Company's established search-targeted content and SEO services provides clients a singular management of their overall Internet advertising budget.
- Launch of TrafficBuilder Text Turbo - InfoSearch Media has completely revamped its original TrafficBuilder Text product, launching a Turbo edition to create more visually appealing content pages that drive search engine traffic more effectively. The new "Turbo" product also follows the most current SEO industry best practices and with its increased line-up of value-added offerings, is priced 20% higher than the original TrafficBuilder Text product.
- Website redesign and new content management system - The Company has updated its website to highlight the expansion of its products and services. The redesign includes a new home page, the addition of video and other changes to improve usability. A best-in-class content management system has also been implemented to streamline operations and reduce the ongoing cost of maintaining the website.
About InfoSearch Media
InfoSearch Media is a leading, comprehensive Internet search marketing Company and the largest dedicated provider of cost-effective Web traffic via search optimized text and video content, pay-per-click and SEO services. 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 clients secure Internet traffic. Incorporated in 2000, the Company is publicly traded with headquarters in Marina del Rey, California.
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 Annual Report on Form 10-K for the year ended Dec. 31, 2007, 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.
Schedule of Option Expense
For the quarter ended March 31, 2007
INFOSEARCH MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Twelve Months
Ended December 31,
--------------------------
2007 2006
------------ ------------
CONTENTLOGIC SALES $ 4,784,068 $ 6,016,080
WEB PROPERTIES SALES 126,236 1,583,980
------------ ------------
NET SALES 4,910,304 7,600,060
CONTENTLOGIC COST OF SALES 1,335,933 1,686,645
WEB PROPERTIES COST OF SALES 56,954 987,040
------------ ------------
COST OF SALES 1,392,887 2,673,685
GROSS PROFIT $ 3,517,417 $ 4,926,375
OPERATING EXPENSES
General & administrative 3,754,240 9,600,049
Sales & marketing 1,831,548 2,138,695
------------ ------------
TOTAL COSTS AND EXPENSES 5,585,788 11,738,744
LOSS FROM OPERATIONS $ (2,068,371) $ (6,812,369)
CHANGE IN FAIR VALUE OF WARRANTS 233,285 1,728,443
LIQUIDATED DAMAGES - (502,397)
OTHER EXPENSES (INCOME) 252,707 (35,244)
INTEREST INCOME (NET) 52,153 92,414
------------ ------------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE TAX $ (1,530,226) $ (5,529,153)
TAXES FROM CONTINUING OPERATIONS 6,083 18,585
------------ ------------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS $ (1,536,309) $ (5,547,738)
DISCONTINUED OPERATIONS (NOTE 12)
Loss from discontinued operations of
Answerbag, Inc. - (412,132)
Gain on disposal of discontinued
operations - 1,919,962
LOSS BEFORE TAXES $ (1,536,309) $ (4,039,908)
------------ ------------
EARNINGS FROM DISCONTINUED OPERATIONS - 1,507,830
NET EARNINGS (LOSS) $ (1,536,309) $ (4,039,908)
============ ============
EARNINGS (LOSS) PER SHARE FROM CONTINUING
OPERATIONS -
BASIC (0.03) (0.12)
============ ============
DILUTED (0.03) (0.12)
============ ============
EARNINGS (LOSS) PER SHARE FROM DISCONTINUED
OPERATIONS -
BASIC - (0.03)
============ ============
DILUTED - (0.03)
============ ============
EARNINGS (LOSS) PER SHARE
BASIC $ (0.03) $ (0.09)
============ ============
DILUTED $ (0.03) $ (0.09)
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 51,887,244 47,202,261
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 51,887,244 47,202,261
The accompanying notes are an integral part of the unaudited consolidated
financial statements.
INFOSEARCH MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
December December
31, 2007 31, 2006
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 787,239 $ 2,495,655
Restricted cash 20,000 380,530
Accounts receivable 215,518 68,941
Due from related parties - 50,732
Prepaid and other current assets 104,245 201,604
----------- -----------
TOTAL CURRENT ASSETS $ 1,126,702 $ 3,197,463
----------- -----------
EMPLOYEE ADVANCE 1,800 1,000
CONTENT DEVELOPMENT - 4,082
PROPERTY AND EQUIPMENT, NET 130,650 131,139
SECURITY DEPOSIT 37,500 37,500
EQUITY WARRANT ASSET 112,049 308,837
----------- -----------
TOTAL ASSETS $ 1,408,701 $ 3,680,020
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 228,308 $ 204,271
Accrued salaries and bonuses 12,553 264,515
Accrued expenses 172,132 400,052
Accrued expenses Answerbag acquisition - 75,156
Capital leases - 17,621
Deferred revenue 526,868 454,741
Provision for refunds payable/chargebacks 15,842 30,842
----------- -----------
TOTAL CURRENT LIABILITIES 955,703 1,447,198
FAIR VALUE OF WARRANT LIABILITY 967,651 1,396,215
----------- -----------
TOTAL LIABILITIES $ 1,923,354 $ 2,843,413
----------- -----------
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, undesignated, par value
$.001 per share, 25,000,000 shares
authorized; no shares issued and
outstanding; - -
Common stock, $.001 par value, authorized
200,000,000 shares; issued and outstanding
52,336,909 and 42,277,775, respectively 52,494 51,491
Committed stock, 0 and 164,282 shares 0 22,586
Additional paid in capital 11,336,742 11,130,109
Accumulated deficit (11,903,889) (10,367,580)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY: $ (514,653) $ 836,606
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,408,701 $ 3,680,019
=========== ===========
InfoSearch Media, Inc.
Statements of Cash Flows
For the twelve months ended 12-31-07
2007 2006
------------- -------------
Cash flows from operating
activities:
Net Loss $ (1,536,309) $ (4,039,908)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 118,535 615,529
Equity Based Compensation 157,959 4,223,245
Issuance of Warrants - 78,331
Loss on disposal of equipment - 10,937
Liquidated damages - 509,904
Changes in fair value of warrants (233,285) (1,728,443)
Gain on sale of Answerbag assets - (1,919,962)
Accounts receivable (171,277) (64,492)
Prepaid Expenses and Other Current
Assets 147,291 (16,074)
Accounts Payable, Accrued Expenses,
and Other Liabilities (531,002) 222,141
Provision for refund 10,000 (13,309)
Deferred Revenue 72,127 (2,173,306)
------------- -------------
Net cash provided by (used in)
operating activities (1,965,961) (4,295,407)
------------- -------------
Cash flows from investing activities:
Restricted cash 360,530 (380,530)
Net cash payments in purchase of Answerbag - (479,888)
Net proceeds from sales of Answerbag
assets - 2,937,149
Capital expenditures - fixed assets (88,963) (37,640)
Capital expenditures - content
development - (49,361)
------------- -------------
Net cash used in investing
activities 271,567 1,989,730
------------- -------------
Cash flows from financing activities:
Principal payments of capital lease
obligations (17,621) (33,004)
Stock options exercised - 5,775
Warrants exercised 3,600 -
------------- -------------
Net cash from financing activities (14,021) (27,229)
------------- -------------
Net increase (decrease) in cash
and cash equivalents (1,708,415) (2,332,906)
Cash and cash equivalents at beginning of
period $ 2,495,654 $ 4,828,560
Cash and cash equivalents at end of period $ 787,239 $ 2,495,654
------------- -------------
Investor Contact:
Scott Brogi
CFO, InfoSearch Media
310.822.1103
scott@ishm.com
Email Contact
Media Contact:
Len Simpson
310/301-7741
press@infosearchmedia.com
Email Contact
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