WANTED Technologies' Q2 Revenue Increases 21% on Diversification Efforts

WANTED Expands Growth Opportunity with Launch of Solutions to Serve Corporate and Staffing Recruiters

  • Revenue of $1,378,840 for the second quarter, compared to $1,143,740 in the second quarter of prior year, a 21% increase.
  • Launch of WANTED AnalyticsTM 3.0, the Company's next generation business intelligence platform targeting the Corporate HR sector.
  • Improvement of 7% in the Company's recurring revenue base in US dollars, from an annualized value of US$4.4 million as of December 31, 2009 to US$4.7 million as of December 31, 2010.
  • EBITDA of $8,763, compared to negative EBITDA of $60,834 in second quarter of fiscal 2010.
  • Net loss of $122,376, an improvement of $55,549 over the prior year as the Company continues to invest in diversification efforts.

QUEBEC CITY, Feb. 18 /CNW Telbec/ - WANTED Technologies (TSXV: WAN), the leading source of business intelligence for the talent marketplace, reported an increase of 21% in revenue over the same period in 2010. The Company, which has been diversifying its employment services solutions through continued investments in new product development efforts, also reported that it narrowed its loss in the quarter to $122,376, an improvement of $55,549 over the prior year. All amounts are in Canadian dollars, unless otherwise indicated.

"The profound effects of the employment contraction throughout the economy are obviously still with us," said Bruce Murray, WANTED's President and CEO. "However, this is the second consecutive quarter of year-over-year revenue gains, which gives us some cause for cautious optimism."

WANTED provides business intelligence services to Media, Staffing and Government clients which serve the employment marketplace. During the past two years, many of the Company's clients experienced revenue losses of between 40 and 60 percent as employers severely curtailed hiring. Although the current employment market is showing modest gains, general economic uncertainty is still causing employers to be very cautious in adding to payrolls.

"The gains we have seen in the past two quarters reflect the general improvements in the market," said Murray. "But there are still pockets of weakness in certain sectors that we serve, particularly among traditional media companies such as newspapers."

WANTED's latest launch of the AnalyticsTM 3.0 platform is designed to enable the Company to enter the much larger market for corporate human capital services. As the economy recovers and demand for employees picks up, WANTED expects to begin licensing its AnalyticsTM 3.0 platform services to corporate clients to improve the efficiency of their recruiting efforts.

WANTED's revenues for the quarter ended December 31, 2010 increased by 21 percent to $1,378,840 compared to $1,143,740 for the corresponding quarter of the previous year. For the six-month period ended December 31, 2010, revenue totalled $2,626,185, compared to $2,279,202 for the same period in the previous fiscal year, an increase of 15%. The majority of WANTED's clients subscribe on an annual basis to the Company's online platform, AnalyticsTM. Recurring revenue contracts with these clients represent approximately 88 percent of WANTED's total revenues for the second quarter of fiscal 2011, compared to 96 % for the corresponding quarter of prior year.

As of December 31, 2010, contracts in hand, in Canadian dollars, represented approximately $4.7 million dollars in annualized recurring revenues. This compares with contracts in hand totalling approximately $4.6 million dollars as of December 31, 2009, an increase of 2 percent. The majority of WANTED's clients are in the US and when viewed in US dollars, the level of recurring revenues as of December 31, 2010 is up 7 percent from 4.4 million dollars as of December 31, 2009.

WANTED's decision to diversify its client base beyond Media clients has succeeded in replacing some of the lost recurring revenue. Gains have come from the Staffing and Government sectors leading to a more stable recurring revenue base. These two sectors, Staffing and Government, represented together, at the end of the second quarter of fiscal 2011, approximately 45% of the total recurring revenue base compared to 22% a year ago. The Company's partnership with The Conference Board, positively contributed to this diversification.

                 
    Three-month periods   Six-month periods
    ended December 31,   ended December 31,
    2010   2009   2010   2009
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
    $   $   $   $
Revenues 1,378,840   1,143,740   2,626,185   2,279,202
Cost of sales 45,107   1,785   51,139   2,028
Gross margin 1,333,733   1,141,955   2,575,046   2,277,174
                 
Expenses              
  Research and development, net of tax credits 450,566   394,225   827,697   733,078
  Marketing and selling 581,601   561,465   1,151,705   971,096
  Administrative 323,844   278,542   572,642   525,576
  Amortization of intangible assets 40,770   40,770   81,540   81,540
  Financial expenses, net amount 3,222   14,275   6,200   24,057
    1,400,003   1,289,277   2,639,784   2,335,347
Loss before other expenses and (66,270)   (147,322)   (64,738)   (58,173)
income taxes              
Other expenses:              
  Exchange loss 37,186   15,800   57,305   82,655
  Loss on disposal of property, plant and equipment    222       2,297    
Loss before income taxes (103,678)   (163,122)   (124,340)   (140,828)
Income taxes 18,698   14,803   37,493   31,323
Loss and Comprensive Income (122,376)   (177,925)   (161,833)   (172,151)
                 
Basic and diluted net loss per share (0.005)   (0.007)   (0.007)   (0.007)
                 
                 

Operating costs went from $1,289,277 in the second quarter of fiscal 2010 to $1,400,003 for the second quarter of fiscal 2011, an increase of 9 percent. For the first six months of fiscal 2011, operating costs totalled $2,639,784, compared to $2,335,347 for the first six months of the previous fiscal year, an increase of $304,437 or 13 percent. These increases mostly result from increases in research and development, in sales and marketing expenses.

EBITDA for the second quarter of fiscal 2011 totalled $8,763, up $69,597 from a negative EBITDA of $60,834 for the second quarter of fiscal 2010. For the first six months of fiscal 2011, EBITDA totalled $83,837, compared to $57,795 for the first six months of the previous fiscal year, an increase of $26,042 or 45 percent. EBITDA represents the net earnings before net financial expense, income taxes, depreciation and amortization on property, plant and equipment and intangible assets. As generally accepted accounting principles in Canada do not provide a standardized definition for this measure, it may not be comparable to similar measures used by other companies.

Net loss for the quarter ended December 31, 2010 amounted to $122,376 (loss of $0.005 per share) compared to $177,925 (loss of $0.007 per share) for the corresponding quarter of the previous year, an improvement of $55,549. This positive variation results from a decrease in loss before other expenses, partially offset by an increase in foreign exchange loss. When compared to the same period for the previous year, loss before other expenses decreased $81,052 while foreign exchange loss increased by $21,386. For the first six months of fiscal 2011, net loss reached $161,833, compared to $172,151 for the first six months of the previous fiscal year, a positive variation of $10,318. This positive variation results from a decrease in foreign exchange loss, partially offset by a increase in loss before other expenses. When compared to the same period for the previous year, foreign exchange loss decreased by $25,350 while loss before other expenses increased by $6,565 for the six-month period ended December 31, 2010.

Higher provisions for income taxes also contributed to the variation in net losses for the three-month and six-month periods ended December 31, 2010. The Company recorded provisions of $18,698 and $37,493 for the second quarter and the six-month periods ended December 31, 2010, compared to provisions of $14,803 and $31,323 recorded in the corresponding period of prior year, representing negative variations of $3,895 and $6,170 respectively.

Financial position

As at December 31, 2010, WANTED had a cash position (cash and temporary investments) of $1,591,889 and a working capital of $1,497,092. This compares with a cash position of $2,430,913 and a working capital of $1,801,720 as at June 30, 2010, representing decreases of $839,024 and $304,628 respectively. This decrease of $839,024 in the Company's liquidity is mainly the result of negative cash flows of $226,414, $135,978 and $476,632 used by operating, investing and financing activities respectively.

Total assets stood at $5,660,237 at December 31, 2010, down $182,422 from $5,842,659 at June 30, 2010. The decrease in total assets is mainly due to decreases of $476,199 in short-term assets and $81,540 in intangible assets, partially offset by an increase of $375,317 in property, plant and equipment. This increase in property, plant and equipment mostly results from investments in leasehold improvements as well as the purchase of computer equipments required to maintain adequate user response time within new and more complex user functionalities as well as to support new product development.

WANTED also announces the issuance of a total of 740,000 stock options between the members of its executive team and the members of the Board of directors. Four members of WANTED'S executive team will be granted a total of 390,000 stock options while the members of the Board of directors will be granted a total of 350,000 stock options. Each option entitles its holder to purchase one common share of WANTED at a price of $0.40 per share for a five-year period. Of the 740,000 stock options granted, 390,000 are subject to a 90-day hold period and can be exercised up to 20% per year, on a cumulative basis. The remaining 350,000 stock options can be exercised immediately.

Those interested will be able to access the information on the December 31, 2010 unaudited consolidated financial statements, the notes thereto and the management discussion and analysis via the Internet at www.sedar.com and at the Company's website, www.wantedtech.com, as of Friday, February 18th, 2011.

About WANTED Technologies Corporation

WANTED provides real-time business intelligence for the talent marketplace. Clients in the staffing, HR, RPO, media, and government sectors use WANTED Analytics™ to find sales leads, analyze employment trends, gather competitive intelligence, forecast economic conditions, and source hard-to-fill positions.

WANTED is also the exclusive data provider for The Conference Board's Help-Wanted OnLine Data Series™, the monthly economic indicator of Hiring Demand in the United States.

WANTED Technologies (TSX-V:WAN) was founded in 1999. The company's headquarters are in Quebec City, Canada, and it maintains a US-based subsidiary with primary offices in New York City. The company began collecting detailed Hiring Demand data in June 2005, and currently maintains a database of more than 600 million unique job listings. To sample WANTED's services, visit www.wantedanalytics.com. For more information about how WANTED helps organizations make better decisions and improve sales results, visit www.wantedtech.com.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.  Any statement that appears prospective shall not be interpreted as such.

SOURCE WANTED TECHNOLOGIES INC.

For further information:

Source:  WANTED Technologies Corporation
   
Contact:    Mr. Bruce Murray, President and CEO
Tel: (418) 523-6663, ext. 222
Mr. Martin Auclair, VPFinance and CFO
Tel: (418) 523-6663, ext. 337

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WANTED TECHNOLOGIES INC.

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