Toronto, Canada
US Deliveries Triple in Period; Independent Sector Revenues Grow 51%
YANGAROO Inc. (TSX-V: YOO, OTC: YOOIF), the industry's leading secure digital media distribution company, today announced its results for the nine months and quarter ended September 30, 2007. Revenues (which exclude interest income) for the nine month period ended September 30, 2007 were 27% higher than for the same period in 2006. The loss for the nine months increased 12%, but remained below the company’s budget target. The company’s liquidity position remained strong and above plan with $6,925,000 cash on hand and total liabilities of $217,000 at the quarter end.
In the US market, the adoption of YANGAROO’s Digital Media Distribution System (DMDS) accelerated through the first three quarters, as the number of deliveries made via DMDS in the US rose to 846,000 by the end of September. The number of US deliveries in the nine month period was more than triple those made in the same period of 2006. The company made 211,000 US deliveries in the month of October alone, of which over 60% were made by major US labels. This October volume is more than double the volume for the entire first half of 2006.
In Canada, YANGAROO’s DMDS remained the de-facto standard for B2B (business to business) digital delivery of new music files for the record and radio industry. No competitor’s system was in commercial use at any major record label in Canada to date in 2007. EMI, Sony BMG, Universal and Warner Music Canada were all using DMDS commercially and independent sector use continued to expand. Revenues from the Canadian and US independent sector for the nine month period increased 51% over the same period last year.
“It is clear that the US music industry is coming to rely on DMDS as an essential tool for distribution of promotional releases, just as the industry did in Canada. We are now working closely with US major labels to monetize their growing usage of DMDS,” said YANGAROO President & CEO John Heaven. “The increase in revenues for the third quarter is very encouraging as it included the traditionally slow July and August period for music releases. Planned increases in human resources combined with patent enforcement costs led to higher expenses in the period, however total expenses remained under budget.”
The company continued to make headway with its second US patent application, as the US patent examiner has not issued rejections in reliance on any of the prior art listed by a competitor as being relevant to the application, and in November dismissed as improper a submission made by the competitor.
Summary of operating results for the nine months and quarter ended September 30, 2007 ($Cdn):
| | Nine Months | Quarter |
| | 2007 | 2006 | 2007 | 2006 |
| Revenue | 387,306 | 305,701 | 133,858 | 106,465 |
| Interest income | 210,408 | 11,916 | 78,210 | 5,789 |
| EBITDA | (1,770,633) | (1,433,781) | (633,265) | (455,361) |
| Net loss for the period | (1,813,550) | (1,624,182) | (652,295) | (524,314) |
| Loss per share (basic & diluted) | (0.03) | (0.05) | (0.01) | (0.02 |
The full text of the financial statements and Management Discussion & Analysis is available at www.yangaroo.com and at www.sedar.com.
In further news, the board of directors of YANGAROO has granted three external directors 25,000 options each with an exercise price of $0.13 and expiry date of November 27, 2012. The board of directors has adopted a policy of setting option exercise prices at the greater of the three month weighted average trading price and the closing price on the day before the grant.
YANGAROO's DMDS has made over four million deliveries of over 11,000 songs from more than 500 record labels to destinations which include radio stations representing over 35 US broadcast chains such as CBS/Infinity, Citadel, Clear Channel, Cox, Cumulus, Emmis, EntreVision, Entercom, Federated Media, Sirius, Journal, DMX, Jones Radio, AOL, Music Choice, Radio One, Salem Communications, Univision, Westwood One, Regent, Premiere Radio, Next Media, XM Satellite Radio, Waitt Media and many others. DMDS is the only system that can deliver music across the US, Canada and the UK.
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 musical recordings and advertising to radio, media, retailers and other authorized recipients with more accountable, effective and far less costly digital delivery of broadcast quality media via the Internet. YANGAROO has offices in Toronto, New York, Los Angeles, and London, UK. 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, President and CEO of YANGAROO Inc. 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.