YANGAROO reports first quarter results

TORONTO, May 28 /CNW/ - YANGAROO Inc. (TSX-V: YOO, OTC: YOOIF), the industry's leading secure digital media distribution company, today announced its results for the first quarter ended March 31, 2010. Revenues for the first quarter of 2010 increased 6% over revenues for the preceding fourth quarter of 2009, and increased 2% compared to the first quarter of 2009.

Highlights from the first quarter of 2010 include: the Recording Academy's successful utilization of YANGAROO'S Digital Media Distribution System (DMDS) to distribute music submitted for the 52nd GRAMMY Awards to the more than 12,000 voting members throughout the U.S.; the signing of multi-year agreements with the Western Canadian Music Alliance (WCMA) and Music BC; and completion of the private placement of 818 Units at $1,000 per Unit for gross proceeds of $818,000. Shortly after the end of the first quarter the company signed a landmark agreement with MTV Networks, a division of Viacom International Inc., to use DMDS to receive artist and music-related audiovisual content and to integrate DMDS into MTV Network's internal workflow.

"While Q1 did show moderate growth in revenues, we are not satisfied with these results," said YANGAROO President & CEO John Heaven. "We had targeted to have our agreement with MTV Networks in place earlier and revenue from music video deliveries in the U.S. to commence during the first quarter. The agreement with MTVN was announced on April 15, 2010 and we expect that revenues from music video deliveries in the U.S. will commence in the second quarter and grow rapidly throughout the remainder of the year. DMDS 5.0 is now the 'one stop shop' for music labels, artists and production houses to distribute both their broadcast quality audio and video releases. The next major vertical for us is television advertising delivery and we expect that revenues from this market will closely follow the rollout of music video delivery."

Summary of operating results for the periods ended March 31st:

    
    -------------------------------------------------------------------------
                       $CDN                               First Quarter
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                                                        2010         2009
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    Revenue                                             185,290      181,386
    -------------------------------------------------------------------------
    Interest income                                         404        6,996
    -------------------------------------------------------------------------
    EBITDA                                             (505,653)    (487,213)
    -------------------------------------------------------------------------
    Net loss for the period                            (686,300)    (610,021)
    -------------------------------------------------------------------------
    Loss per share (basic & diluted)                      (0.01)       (0.01)
    -------------------------------------------------------------------------
    

An increase in total expenses of 9% accounted for the higher loss compared to the corresponding period in 2009. This increase was mostly accounted for by a 45% increase in amortization of intangible assets and a 29% increase in general and administrative expense for the protection of the company's Canadian and U.S. intellectual property rights. These increases were partly offset by a 17% decrease in marketing and promotion expense and 6% decrease in salaries and consulting expense.

The full text of the financial statements and Management Discussion & Analysis is available at www.yangaroo.com and at www.sedar.com.

About YANGAROO:

YANGAROO's patented Digital Media Distribution System (DMDS) is a leading secure B2B digital delivery solution for the music and advertising industries. DMDS is a Web-based delivery system that pioneers secure digital file distribution by incorporating biometrics, high-value encryption and watermarking. DMDS replaces the physical distribution of audio and video content for music, music videos, and advertising to television, radio, media, retailers and other authorized recipients with more accountable, effective, and far less costly digital delivery of broadcast quality media via the Internet.

Named one of Canada's Top 100 Tech Companies for 2009 by Canadian Business, YANGAROO has offices in Toronto, New York, Los Angeles, and London, U.K. YANGAROO trades on the TSX Venture Exchange (TSX-V) under the symbol YOO and in the U.S. under OTCBB:YOOIF. For further information, please contact John Heaven at 905-763-3553 or visit www.yangaroo.com.

The statements contained in this release that are not purely historical are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

%SEDAR: 00018809E

SOURCE YANGAROO Inc.

For further information: For further information: Don Prindle, Gina Preoteasa, Trylon SMR, (212) 725-2295, don@trylonsmr.com, gina@trylonsmr.com

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