ZoomerMedia Limited (formerly Fifty-Plus.Net International Inc.) (TSX
VENTURE:ZUM) today announced the financial results for the first quarter ended
December 31, 2008.
On December 28, 2007, Olympus Management Limited ("OML"), a private Ontario
corporation, acquired control of Fifty-Plus.Net International Inc. ("FPN")
through a reverse take-over ("RTO").
As a result of the RTO, the former shareholders of Kemur Publishing Co. Ltd.
("Kemur") (i.e. OML) acquired control of FPN. Under the purchase method of
accounting Kemur has been identified as the acquirer, and, accordingly, the
entity is considered to be a continuation of Kemur with the net assets of FPN at
the date of the RTO deemed to have been acquired by Kemur. Since the RTO is
accounted for as a reverse take-over, the income statement figures up until the
date of the RTO (i.e. December 28, 2007) are solely those of Kemur. As the RTO
was completed on December 28, 2007, the results of FPN for the period from the
date of the RTO's closing (i.e. December 28, 2007) to December 31, 2007 are not
material and have not been included in the statement of income. The income
statement for the year ended June 30, 2008 includes the operations of Kemur for
the six months ended December 31, 2007 and the consolidated operations of Kemur
and FPN for the six months ended June 30, 2008. The comparative figures for last
year are solely those of Kemur. On June 10, 2008, Kemur was continued as a
Federal corporation and changed its name to ZoomerMedia Limited. On July 1,
2008, FPN and its wholly owned subsidiaries Fifty-Plus.Net Inc and ZoomerMedia
Limited amalgamated and will carry on business under the name ZoomerMedia
Limited.
For the quarter ended December 31, 2008, the Company had revenue of $2,814,620
and expenses of $3,618,786 with a net loss after tax of $804,166. These results
are in line with the Company's business plan for 2009 as it invests in the
development of ZOOMER magazine and accompanying Zoomer-branded websites, to
ensure that the Company maximizes its share of the growing media expenditures
anticipated in 2009 and beyond aimed at the aging baby boomer cohort. For the
comparable quarter ended December 31, 2007, the Company had revenue of
$1,096,988 and expenses of $1,099,126 with a net loss after tax of $2,238.
Magazine advertising revenue for the quarter was $897,665 versus $675,350 for
the comparable quarter last year. This increase of $222,315 (32.9%) is a result
of increased advertising pages sold in the re-launched version of Zoomer
magazine.
Subscription revenue for the quarter was $251,612 versus $388,972 for the
comparable quarter last year. This decline of $137,360 (35.3%) is attributable
to the a change in the recognition of subscription revenue from recognizing
subscription revenue on an equal monthly basis over the term of the subscription
to recognizing the revenue based upon the delivery of each issue of the magazine
over the term of the subscription period.
An increase in sundry revenue of $33,473 for the quarter was attributable to a
combination of increased interest revenue, prompt payment discounts and volume
rebates from suppliers.
Website revenue of $402,926, royalty revenue of $672,854 and show and conference
revenue of $523,424 was earned in the quarter. Comparative figures for these
three revenue categories for the comparable quarter last year are not contained
in these financial statements as the comparative figures are those of Kemur.
Administration expenses were $230,122 versus $138,995 for the comparable quarter
last year, an increase of $91,127 (65.6%) due to the inclusion of the
administration costs pertaining to the website, royalties and shows and
conferences that are not included in the comparative figures for the comparable
quarter last year as the comparative figures are those of Kemur.
Total amortization expenses were $283,763 versus $3,763 for the comparable
quarter last year due to the inclusion of the amortization of $253,674
pertaining to the CARP Royalty Rights and the Intangible Assets that are not
included in the comparative figures for the comparable quarter last year as the
comparative figures are those of Kemur.
Circulation expenses were $182,228 versus $60,212 for the comparable quarter
last year, an increase of $122,016 (202.6%) due to significant circulation
expenses incurred in newsstand and other promotion of the re-launch of Zoomer
magazine while no such expenditure was incurred in the comparable quarter last
year.
Editorial expenses were $738,301 versus $304,679 for the comparable quarter last
year, an increase of $433,622 (142.3%) due to additional personnel hires for the
re-launch of the magazine as well as increased expenditures for freelance
writers and photographers in the re-launched magazine.
Production expenses were $1,181,106 versus $351,064 for the comparable quarter
last year, an increase of $830,042 (236.4%) as a result of printing and
distributing significantly larger issues of Zoomer magazine and an additional
50,000 newsstand copies for the November and December issues.
Royalties paid were $672,781 versus $33,700 for the comparable quarter last
year. The increase is due to the obligations assumed on the acquisition of the
CARP Royalty Rights as described above.
Sales expenses were $641,386 versus $146,715 for the comparable quarter last
year, an increase of $494,671 (337.2%). This variance is attributable to the
inclusion of sales costs of $463,064 for website sales, show and conference
sales and CARP marketing initiatives that are not included in the comparative
figures for the comparable quarter last year as the comparative figures are
those of Kemur.
Professional fees were $99,503 versus $nil for the comparable quarter last year.
This variance is attributable to the inclusion of legal and audit fees for the
public company that are not included in the comparative figures for the
comparable quarter last year as the comparative figures are those of Kemur.
During the quarter, directors' fees of $8,000, management fees of $196,244 and
stock-based compensation expense of $124,000 were incurred. Website expenses
recovered in the amount of $381,580 during the quarter are the result of a tax
credit of $537,370 under the Ontario Interactive Digital Media Tax Credit
Program. Strong advertising demand and the need to enhance the look and
functionality of the Company's main web properties, 50Plus.com and CARP.ca, have
incurred additional expenditures in this very important area. New features such
as improved search capability and new article presentation have increased page
views by an average of 60% in the past 12 months. Comparative figures for these
expense categories for the comparable quarter last year are not contained in
these financial statements as the comparative figures are those of Kemur.
As at December 31, 2008, the Company had cash and short term deposits on hand of
$1,366,756 (June 30, 2008 - $2,233,536) and working capital (excluding the
current portion of deferred revenue) of $2,505,462 (June 30, 2008 - $2,887,318).
Management is of the opinion that these cash reserves are adequate to carry out
the business plan for the balance of 2009. The Company continually reviews its
business plan with a careful eye on available cash reserves to sustain
operations. The Company has implemented a cost cutting program including salary
and operating expense reductions the impact of which will begin to be reflected
in the next quarter.
About ZoomerMedia Limited
ZoomerMedia Limited (ZUM) publishes ZOOMER magazine, the largest paid
circulation magazine in Canada for the mature market. Published nine times a
year, ZOOMER magazine has a paid circulation of approximately 190,000 and places
a further 50,000 copies on newsstands.
ZUM also derives royalty revenues through the provision of exclusive marketing
and membership services to CARP, A New Vision of Aging for Canada.
(ZUM) is also Canada's leading provider of online content targeting the 45+ age
group. Altogether, the portfolio of web sites and electronic newsletters
delivers over 2 million pages views per month. The key property is
www.50plus.com, delivering a wide range of information, entertainment, community
(forums, dating, blogs) and commerce together with four electronic newsletters
(health, money, travel, lifestyle), each of which has over 120,000 opt-in
subscribers.
ZUM also produces and manages www.carp.ca, the online home of CARP. With 350,000
members, CARP is Canada's largest association for the 45+. In addition, ZUM has
recently launched www.nomorewaiting.info, a web site focusing on CARP's advocacy
campaign, "No More Waiting," which aims to influence governments to improve
health care performance. ZUM also produces CARP Action Online, an electronic
newsletter for CARP members.
Cautionary note on forward-looking statements
Certain statements made in this report are 'forward-looking statements' which
may include, without limitation, any statement that may predict, forecast,
indicate or imply future results, performance or achievements, and may contain
the words 'believe', 'anticipate', 'expect', 'estimate', 'project', 'will be',
'will continue', 'will likely result' or similar words or phrases.
Forward-looking statements involve risks and uncertainties, which may cause
actual results to differ materially from the forward-looking statements. The
risks and uncertainties are detailed from time to time in filings by ZoomerMedia
Limited with provincial securities commissions. New risk factors emerge from
time to time and it is not possible for management to predict all such risk
factors, nor can it assess the impact of all such risk factors on the Company's
business or the extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any forward-looking
statements. Such risks, uncertainties and other factors include, but are not
limited to, the following:
- the risks inherent in the operation of Internet media properties generally;
- the limited cash flow and the Corporation's dependency on a few large customers;
- the competition in the Internet and media industry for the baby boom
generation's business;
- the risks associated with governmental regulation of internet businesses;
- the risk of future legal claims made by or against the Corporation.
- the risk of managing the current revenue growth rate;
- the dependence of the business on the continuing operation of its computer
systems; and
- the dependence on key personnel.
Given these risks and uncertainties, investors should not place undue reliance
on forward-looking statements as a prediction of actual results.
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