Comtex Reports 2nd Quarter Fiscal 2004 Financial Results

Comtex Reports 2nd Quarter Fiscal 2004 Financial Results 


ALEXANDRIA, Va., Feb. 17  /PRNewswire-FirstCall/ -- Comtex News Network, Inc., 
(BULLETIN BOARD: CMTX) , a leading wholesaler of electronic real-time news and
content, today announced the financial results for the three and six-month
periods ended December 31, 2003.

For the quarter ended December 31, 2003, the Company's revenues were $2 million
compared to $2.4 million for the second quarter of fiscal 2003. The decline in
revenues primarily results from business closures and consolidation among
clients.  The Company reported an operating loss of $708,000 and a net loss of
$1,035,000, or $0.08 loss per share, for the second quarter of fiscal 2004,
versus last year's second quarter operatingprofit of $228,000 and net profit of
$182,000, or $0.01 per share. The operating and net losses are primarily due to
the termination of an operating lease for office space, the disposal of assets
related to office and data center moves, and increased legal fees, as discussed
below.

The terminated operating lease had $2.6 million in remaining lease obligations
and was terminated for $463,000 in settlement-related expenses and additional
rent payments.  As a result of the lease termination, during thesecond quarter,
the Company reduced its leased office space from one location, comprising
approximately 17,000 square feet, to two locations totaling approximately 5,000
square feet.  Leased office expense was thereby reduced to $11,000 per month
from $40,000 per month, a decrease of 73%.

Operating expenses in the comparable period of the prior year included the
recovery of accrued legal fees of $394,000 related to a favorable litigation
settlement.  The recovery of those legal fees reduced the prior year expenses in
comparison to this year.  Excluding the expenses associated with the terminated
lease settlement and legal expense recovery, operating expenses for the second
quarter and the six-month periods, respectively, decreased $266,000, or 17%, and
$483,000, or 15%, from the comparable prior year periods.

In conjunction with the above lease termination and the move of its data center
to a third-party hosting facility, the Company also disposed of related
furniture and equipment assets.  Expenses related to these disposals total
approximately $300,000, reported in other expense.

C.W. Gilluly, Comtex's Chairman and Interim CEO, said, "The turnaround of Comtex
is proceeding, although settling our former office space lease and writing-off
various assets increased non-cash expenses and losses during the quarter."  Dr.
Gilluly also noted, "During this quarter, Comtex opened an office in New York
City, expanded relationships with key distributors and established a new banking
relationship.  All of these factors contribute to increasing the strength of the
Company."

Revenues for the six months ended December 31, 2003 were $4.2 million, the
operating loss was $936,000 and the net loss was $1.3 million, or $0.10 loss per
share.  Revenues for the prior year six-month period were $4.9 million, the
operating loss was $15,000 and the net loss was $85,000, or a loss of $0.01 per
share.  As with the quarter, the increase in operating and net losses for the
six month period are due primarily to the settlement of the liability on the
office space lease, the loss on disposal of assets related to office and data
center moves, the relative increase in legal fees, and a decrease in revenues
and gross profit margins, all partially offset by decreased operating expenses.

About Comtex

Comtex is a leading wholesaler of real-time news and related content for the
world's leading financial and business information distributors. With a
specialization in the financial news and content marketplace, Comtex receives,
enhances, combines, filters and distributes news and content received from more
than 10,000 national and international news bureaus, agencies and publications. 
The resulting news and content products -- with embedded stock tickers, key
words,standardized metadata, uniform formatting and custom filters -- are all
designed to meet the exacting standards required by investment professionals. 
More information on the company can be found at http://www.comtex.com/.

  Financial Table Follows


Comtex News Network, Inc.
                         Selected Financial Data
                               (unaudited)
             (amounts in thousands, except per share amounts)

                            Three Months Ended  Six Months Ended
                               December 31              December 31
                           2003         2002         2003         2002

  Revenues              $  2,014     $  2,430     $  4,187      $ 4,862
  Operating (Loss)
   Income                   (708)         228         (936)         (15)
  Net (Loss) Income     $ (1,035)    $    182     $ (1,287)     $   (85)

  Net (Loss) Earnings
  Per Share
   Basic and Diluted    $  (0.08)    $   0.01     $  (0.10)     $ (0.01)


  Weighted Avg.
  # Shares:
   Basic                  13,583       13,142       13,545       13,141
   Diluted                13,583       13,296       13,545       13,141


  Reconciliation
  to EBITDA:
   Net (Loss) Income    $ (1,035)    $    182$ (1,287)     $   (85)
   Stock-based
    compensation              24            2           52            2
   Depreciation &
    Amortization             230          304          483          608
   Interest/Other
    Expense                  327           45          350           70
   Income Taxes               --           --           --           --
   EBITDA               $   (454)    $    533     $   (402)     $   595




Please Note:  EBITDA is not a term defined by generally accepted accounting
principles, and as a result, our measure of EBITDA might not be comparable to
similarly titled measures used by other companies.  However, we believe that
EBITDA is relevant and useful information, which is often reported and widely
used byanalysts, investors and other interested parties in our industry. 
Accordingly, we are disclosing this information to permit a more comprehensive
analysis of our operating performance.

Also note, except for the historical information contained herein,this press
release contains forward-looking statements within the meaning of Section 21E of
the Securities and Exchange Act of 1934, as amended, that involve a number of
risks and uncertainties.  These forward-looking statements may be identified by
reference to a future period by use of forward-looking terminology such as
"anticipate," "expect," "could," "intend," "may" and other words of a similar
nature.  These statements involve risks and uncertainties that could cause
actual results to differ materially from those contemplated herein, including
the occurrence of unanticipated events or circumstances relating to the fact
that Comtex is in a highly competitive industry subject to rapid technological,
product and price changes.  Other factors include the possibility that demand
for the Company's products may not occur or continue at sufficient levels,
changing global economic and competitive conditions, technological risks and
other risks and uncertainties, including those detailed in the Company's filings
with the Securities and Exchange Commission. Comtex undertakes no obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. 

DATASOURCE: Comtex News Network, Inc.



CONTACT: Amber Gordon of Comtex News Network, [phone]



Web site:  http://www.comtexnews.com/ 

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