November 13th, 2006
MARINA DEL REY, CA--(MARKET WIRE)--Nov 14, 2006 -- InfoSearch Media, Inc. (OTC BB:ISHM.OB - News), a leading online media and search marketing firm, today announced financial results for its third quarter ended September 30, 2006.InfoSearch Media reported revenue of $1.6 million for the third quarter of 2006, compared to $2.7 million for the third quarter of 2005. The third quarter of 2005 revenues included the recognition of $1.7 million of deferred revenue from the Company's discontinued ArticleInsider product. Revenue for ContentLogic grew 62.1% year-over-year to $1.6 million during the third quarter of 2006, compared to $1.0 million for the third quarter of 2005. The Company reported a GAAP net loss of $0.8 million, or $0.02 per share (basic and diluted) for the third quarter of 2006, compared to a GAAP net income of $0.1 million, or $0.00 per share (basic and diluted) for the third quarter of 2005.
"The third quarter results indicate strong progress for InfoSearch as we dramatically improved the bottom line, narrowing our net loss from $3.8 million in the second quarter of 2006 to $0.8 million in the most recent quarter. We continued to control expenses, reducing sales and marketing expenses by over 25%, both sequentially and year-over-year, and have streamlined our sales team to bring compensation in line with revenue generation, all in an effort to drive towards profitability. This streamlining process did produce flat sequential revenues in the third quarter, but we are already seeing enhanced productivity and expect to report continued revenue growth in our core content business going forward. In addition and importantly, as a result of the Answerbag divestiture in early October following the close of the quarter, we strengthened our balance sheet with the addition of $3 million in cash related to the sale," said George Lichter, President and CEO, InfoSearch Media.
"InfoSearch Media has a strong track record as a content-oriented company, and we are focused on broadening our product line of content and content-based online marketing solutions to continue to expand our customer base. We plan to announce a number of new upcoming initiatives, products and enhancements to our technology platform in the coming weeks that address the widespread content needs of both large customers like Demand Media as well as the SOHO and small business sector. We expect that these new initiatives, combined with improving financial results in the coming quarters, will demonstrate the progress that InfoSearch is making amidst the vast opportunities in the content and online marketing sectors," concluded Lichter.
About InfoSearch Media
InfoSearch Media is a leading provider of content based cost-effective search engine marketing services. InfoSearch Media maintains a network of more than 200 professional writers that help businesses succeed on the web by implementing content-based solutions that simultaneously increase online search engine rankings and website sales performance. InfoSearch Media drives website performance through its ContentLogic product.
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. 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.
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INFOSEARCH MEDIA, INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
September 30, December 31,
2006 2005
------------- ------------
ASSETS
Current assets:
Cash $ 417,858 $ 4,828,560
Accounts Receivables $ 174,230 $ 4,449
Due from related parties $ - $ 25,000
Prepaid current assets and other $ 345,930 $ 209,762
Assets Held For Sale $ 15,532 $ -
------------- ------------
Total Current Assets $ 953,550 $ 5,067,771
Employee Advance $ - $ 2,500
Content Development $ 19,341 $ 349,054
Property and Equipment $ 165,886 $ 285,021
Security Deposit $ 37,500 $ 37,500
Assets Held For Sale $ 902,380 $ -
------------- ------------
Total Assets $ 2,078,657 $ 5,741,846
============= ============
LIABILITY AND SHAREHOLDER'S DEFICIT
Current liabilities:
Accounts Payable $ 272,045 $ 276,704
Accrued Bonuses $ 57,169 $ 176,505
Accrued Expenses $ 235,707 $ 268,645
Accrued Expenses AnswerBag Acquisition $ 150,312 $ -
Capital Leases Current Portion $ 26,357 $ 33,004
Deferred Revenue Current Portion $ 382,110 $ 2,074,103
Provision for Refunds Payable/Bad Debt $ 52,844 $ 44,151
Liabilities Held For Sale $ 44,657 $ -
------------- ------------
Total Current Liabilities $ 1,221,201 $ 2,873,112
Capital Leases, net of current portion $ - $ 17,621
Deferred Revenue $ - $ 553,943
Fair Value of Warrant Liability $ 279,170 $ 2,526,272
------------- ------------
Total Liabilities $ 1,500,371 $ 5,970,948
Shareholder's Equity (Deficit):
Preferred Stock $ - $ -
Common Stock $ 51,929 $ 42,278
Committed Equity $ 150,312 $ -
Additional Paid in Capital $ 11,598,416 $ 6,056,291
Accumulated Deficit $ (11,222,371) $ (6,327,671)
------------- ------------
Total Shareholder's Equity (Deficit) $ 578,286 $ (229,102)
Total Liabilities and
Shareholders Equity (deficit) $ 2,078,657 $ 5,741,846
============= ============
INFOSEARCH MEDIA, INC. CONSOLIDATED
STATEMENT OF OPERATIONS
(unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------ ----------- ------------ ------------
2006 2005 2006 2005
------------ ----------- ------------ ------------
Net Sales $ 1,618,942 $ 2,685,510 $ 6,104,684 $ 6,496,249
Cost of Sales $ 404,171 $ 628,464 $ 2,193,712 $ 1,441,380
------------ ----------- ------------ ------------
Gross Profit $ 1,214,771 $ 2,057,046 $ 3,910,972 $ 5,054,869
Operating Expenses:
General &
Administrative $ 1,444,647 $ 1,279,901 $ 9,104,840 $ 3,733,332
Sales &
Marketing $ 476,611 $ 661,355 $ 1,560,645 $ 1,703,062
------------ ----------- ------------ ------------
Total Costs and
Expenses $ 1,921,258 $ 1,941,256 $ 10,665,485 $ 5,436,394
Loss from
Operations $ (706,487) $ 115,790 $ (6,754,513) $ (381,525)
Change in Fair
Value of Warrants $ 232,119 $ - $ 2,247,102 $ -
Other Expenses $ - $ - $ (34,103) $ -
Interest
Income/Expense $ 6,454 $ (2,299) $ 54,038 $ 26,042
------------ ----------- ------------ ------------
Earnings < Loss >
from Continuing
Operations before
Taxes $ (467,914) $ 113,491 $ (4,487,476) $ (355,483)
Provision for
Taxes from
Continuing
Operations $ 7,200 $ - $ 23,353 $ -
------------ ----------- ------------ ------------
Net Earnings
< Loss > from
Continuing
Operations $ (475,114) $ 113,491 $ (4,510,829) $ (355,483)
Loss from
Discontinued
Operations, net
of Taxes $ (276,784) $ - $ (383,870) $ -
------------ ----------- ------------ ------------
Net Earnings
< Loss > $ (751,898) $ 113,491 $ (4,894,699) $ (355,483)
============ =========== ============ ============
Loss per Share
from Continuing
Operations -
Basic and Diluted $ (0.01) $ 0.00 $ (0.10) $ (0.01)
Loss per Share from
Discontinued
Operations - Basic
and Diluted $ (0.01) $ 0.00 $ (0.01) $ 0.00
------------ ----------- ------------ ------------
Loss per Share -
Basic and Diluted $ (0.02) $ 0.00 $ (0.11) $ (0.01)
============ =========== ============ ============
Weighted Average
Shares Outstanding 46,301,912 34,393,608 46,028,271 34,375,766
============ =========== ============ ============
INFOSEARCH MEDIA, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
YTD 9/30/2005
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (4,894,699) $ (355,483)
Adjustment from Discontinued Operations $ 383,870 $ -
------------ ------------
Net Loss from Continuing Operations $ (4,510,829) $ (355,483)
Adjustment to reconcile net
loss to net cash
Used in Operating Activities
Depreciation and Amortization $ 566,459 $ 210,067
Equity based compensation $ 4,729,683 $ 642,385
Disposals-Fixed Assets $ 9,396 $ -
Liquidated Damages $ 509,904 $ -
Change in fair value of warrants $ (2,247,102) $ -
Changes in assets and liabilities:
Accounts Receivable $ (158,756) $ 104,751
Prepaid Expenses and
Other Current Assets $ (119,691) $ (220,056)
Accounts Payable, accrued expenses
and other liabilities $ (6,620) $ (262,076)
Amounts refunded to customers $ 8,694 $ (533,421)
Deferred Revenue $ (2,245,937) $ (3,035,684)
------------ ------------
Total adjustments $ 1,046,030 $ (3,094,034)
NET CASH USED FROM CONTINUING OPERATIONS $ (3,464,799) $ (3,449,517)
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 $ (354,744) $ -
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES $ (3,819,544) $ (3,449,517)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures -
Fixed Assets $ (37,640) $ (150,528)
Capital Expenditures -
Content development $ (49,361) $ (480,930)
------------ ------------
NET CASH USED IN CONTINUING
INVESTING ACTIVITIES $ (87,001) $ (631,458)
NET CASH USED IN DISCONTINUED
INVESTING ACTIVITIES $ (479,888) $ -
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES $ (566,889) $ (631,458)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal Payments of
Capital Lease Obligations $ (24,269) $ (23,605)
Gross Proceeds from Private Placement $ - $ 3,949,868
Employee Advances $ - $ 4,000
------------ ------------
NET CASH (USED IN)/PROVIDED BY
FINANCING ACTIVITIES $ (24,269) $ 3,930,263
------------ ------------
Net Increase (Decrease) in cash $ (4,410,702) $ (150,712)
Cash- Beginning of Period $ 4,828,560 $ 1,328,958
------------ ------------
Cash- End of Period $ 417,858 $ 1,178,246
============ ============
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash Paid for Interest $ 12,795 $ 10,256
============ ============
Income Tax Paid $ 23,353 $ 6,097
============ ============
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 $ -
============ ============
Investor Contact:
Brinlea Johnson
The Blueshirt Group, for InfoSearch Media, Inc.
415/217-7722
Email Contact
Media Contact:
Bree Friedman
InfoSearch Media
310-413-7531
Email Contact
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