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GuruNet Announces First Quarter 2005 Financial Results
GuruNet to Hold Investor Conference Call Today, May 10, 2005 at 1:00 PM EDT
NEW YORK, May 10 /PRNewswire-FirstCall/ -- GuruNet Corporation (AMEX: GRU), a
leading reference search engine, today announced its financial results for the
first quarter of 2005, the first quarter since the Company changed its business
model and released Answers.com, on January 3, 2005. The Company, through its
Answers.com site, generates fees primarily from ads placed alongside its topic
entries. Prior to the launch of Answers.com, the Company's primary means of
generating revenue was from the subscription fees it charged for the use of its
GuruNet premium product.
"We're pleased with our progress this year putting our company and flagship
product, Answers.com, on the map," said Bob Rosenschein, GuruNet's founder and
CEO. "We started by building up end-user traffic. In March, we implemented
Google AdSense, and have begun to see ad revenues from these ads."
Revenues for the first quarter of 2005 were $175,633, compared to $19,631, for
the same period in 2004, and compared to $76,245, in the fourth quarter of
2004. The net loss in the first quarter of 2005 was $1,504,924, compared to a
net loss of $1,692,712, for the same period in 2004, and compared to a net loss
in the fourth quarter of 2004 of $855,131. Net cash used in operations in the
first quarter of 2005, and for the same period in 2004, was $964,401 and
$806,551, respectively. The primary reasons for the difference between the net
loss and the net cash used in operations in the first quarter of 2005 is that
$386,000 of operating expenses were the result of a non-cash charge for
stock-based compensation expense, and various changes in our operating assets
and liabilities.
Revenues in the first quarter of 2005 resulted from advertising revenues of
approximately $107,000, recognition of subscription license revenue (from
subscriptions initiated prior to 2005) of approximately $50,000, revenue from
partners with whom we market co-branded products of approximately $14,000 and
other revenue of $5,000. Prior to January 3, 2005, our primary source of
revenue was selling subscriptions to the GuruNet product, the forerunner to
Answers.com. "The launch of Answers.com, from a revenue perspective, was a
multi-tiered process," said Steven Steinberg, GuruNet's CFO. "From launch date
until the middle of January, we ran public service announcements on Answers.com
and did not display any paid advertising. In the middle of January we began
using and testing various advertising network providers. We reached an
important milestone on February 28, 2005, when we began using Google's
contextual AdSense advertising on our Answers.com information pages, as well as
integrating Google search, with paid search advertising, into Answers.com. As a
result of the multi-tiered launch, our January and February 2005 advertising
revenue was approximately $16,000, while March 2005 advertising revenue was
approximately $91,000."
In the first quarter of 2005, the Company also increased its liquidity and
capital resources by entering into an agreement with certain holders of
warrants that were issued by the Company in 2004, in connection with a bridge
financing, pursuant to which such holders exercised an aggregate of 1,871,783
Bridge Warrants. As a result, the Company raised approximately $12,225,000, net
of costs relating to the exercise. Further, the Company raised additional
amounts, in excess of $1 million, from other exercises of options and warrants
during the quarter.
GuruNet will host a conference call today, Tuesday, May 10th, 2005, at 1:00 PM
EDT, to discuss the results of its first quarter ended March 31, 2005, as well
as to provide insight into Q2 trends to date, elaborate on recent
events/announcements and company progress and highlight next steps. Bob
Rosenschein and Steven Steinberg, will be making the presentation, which will
be followed by a question and answer session. Investors will have the
opportunity to listen to the conference call and the replay over the Internet
through GuruNet's Website, within its Investor Relations page at
http://www.gurunet.com/ir. To listen to the live call via webcast, please go to
our Website at least 10 minutes early to connect and register. To dial in to
listen and/or submit a question, please dial 800-938-0653 and request the
GuruNet call. For those unable to listen to the live broadcast, a replay will
be available on the site shortly after the call, and will remain available on
the site for a period of three weeks following the call.
About GuruNet
GuruNet Corporation (AMEX:GRU) operates Answers.com, a leading reference
engine, http://www.answers.com/. Founded in 1999 by Bob Rosenschein, GuruNet
Corporation (http://www.gurunet.com/) provides patented technology and software
tools to access concise information on demand. For additional information,
visit http://www.gurunet.com/.
Cautionary Statement
Some of the statements included in this press release are forward-looking
statements that involve a number of risks and uncertainties. For those
statements, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
Important factors may cause our actual results to differ materially, including
our inability to increase the number of persons who use our products and the
number of partners who will generate increase traffic to our sites, and other
risk factors identified from time to time in our SEC reports, including, but
not limited to, our registration statement on Form SB-2 filed in April 2005.
Any forward-looking statements set forth in this news release speak only as of
the date of this news release. We do not intend to update any of these
forward-looking statements to reflect events or circumstances that occur after
the date hereof. This press release and prior releases are available at
http://www.gurunet.com/. The information in GuruNet's website is not
incorporated by reference into this press release and is included as an
inactive textual reference only.
Press Contact:
Jay Bailey
Director, Communications
GuruNet Corporation
+1-866-576-0352
Selected Consolidated Financial Data (Unaudited)
Statements of Operations:
Three months ended March 31
2005 2004
$, Except $, Except
share data share data
(Unaudited) (Unaudited)
Revenue 175,633 19,631
Cost of revenues 208,543 156,527
Gross margin (32,910) (136,896)
Operating expenses
Research and development 330,469 263,788
Sales and marketing (1) 361,460 318,929
General and administrative (2) 851,615 212,407
Total operating expenses 1,543,544 795,124
Operating loss (1,576,454) (932,020)
Interest income (expense), net 85,907 (737,034)
Other income (expense), net 282 4,322
Loss before income taxes (1,490,265) (1,664,732)
Income taxes (14,659) (27,980)
Net loss (1,504,924) (1,692,712)
Basic and diluted net loss per common (0.25) (1.33)
share
Weighted average shares used in
computing basic and diluted net loss
per common share 6,043,796 1,271,075
(1) Includes $107,255 and $5,236 of stock based compensation in 2005 and 2004,
respectively
(2) Includes $277,366 and $11,522 of stock based compensation in 2005 and 2004,
respectively
Balance Sheets:
The following table summarizes our balance sheet data:
March 31, December 31,
2004
2005
(Unaudited) (Audited)
Cash and Investments $19,900,760 $7,415,415
Working capital $19,538,974 $6,688,721
Total assets $21,947,010 $8,907,183
Long-term liabilities $1,103,694 $1,078,548
Total stockholders' equity $19,689,771 $6,824,122
DATASOURCE: GuruNet Corporation
CONTACT: Press Contact: Jay Bailey, Director, Communications, GuruNet
Corporation, +1-866-576-0352