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FOR: SOLIUM CAPITAL INC. CDNX SYMBOL: SUM March 13, 2003 Solium Releases 2002 Year-end Results CALGARY, ALBERTA-Solium Capital Inc. ("Solium" or the "Company") today announced its financial results for the year ended December 31, 2002. Solium is an outsourced provider of solutions for employee share entitlement programs. Solium's flagship application, E-SOAP, is a complete end-to-end solution for the administration, execution and reporting of employee stock options for Canadian public companies. The Company had many successes in 2002 as it continued on its life cycle from an early stage technology company towards its goal of being a well-established and profitable entity. During the first quarter of 2002, the Company was reliant on short-term loans from Directors and a third party investor. Over the course of the year, the Company successfully sought out a combination of new financing and a change in executive leadership. As part of restructuring and re-focusing its business, the Company achieved many significant milestones.
Gross revenue in 2002 was $645,000, an increase of 247% from $186,000 in 2001. This increase was due to: (1) increased market penetration as the Company's client base grew, and (2) an increase in average revenue per individual E-SOAP participant as the Company evolved and improved its revenue model in the last half of 2002. The Company ended the year with 12,300 active participants enrolled on the E-SOAP system. This represents a growth of 72% from the 7,135 enrolled as at December 31, 2001. During 2002, 10 new corporate clients were activated onto the E-SOAP system, including EnCana Corporation, Shell Canada Limited, Pason Systems Inc., Molson Inc. and Enbridge Inc. The largest increase to participants on the system occurred in the last half of the year, when more than 4,500 participants were added. In the last half of 2002, the Company initiated an evolution of its revenue model for E-SOAP services. In the fourth quarter of 2002, the Company began charging an administrative fee to participants for each stock option exercise that is initiated through E-SOAP. This administrative fee generated $22,000 in the fourth quarter and is in addition to the existing corporate license fees charged by the Company. Expenses Total expenses decreased by $525,000 from $2,975,000 in 2001 to $2,450,000 in 2002. This was mainly attributable to a decrease of $52,000 in salaries and wages expense and $793,000 in development expense, offset by an increase of $285,000 in general and administrative expenses. Although salaries and wages were relatively static between 2001 and 2002, the Company has gone through some significant organizational restructuring. The employee base was reduced by 10 people in the latter part of 2001 as a result of cost reductions. However, this staff reduction was partially offset by the addition of sales and marketing staff, and the internalization of the Company's systems development through the integration of personnel from Stormworks Ltd. ("Stormworks"), a company that was acquired by Solium in 2002. General and administrative costs totaled $1,200,000 in 2002, compared to $923,000 in 2001. Contributing to this increase was the addition of Directors' and Officers' liability insurance and errors and omissions insurance totaling approximately $21,000, which were added in the latter part of 2001. Rent expense increased in 2002 by $185,000 for two reasons: (1) the Company enjoyed free rent in Calgary until June 30, 2001; and (2) due to the acquisition of Stormworks, the Company gained an additional office location and held two leases in Calgary, until such time that the Company was able to terminate one lease in November 2002. Fees associated with being a public company totaling approximately $37,000 were also a significant portion of the change in general and administrative costs from 2001. Outsourced development costs were $78,000 in 2002 as compared to $793,000 in 2001. This reflects two separate milestones. One being that E-SOAP's primary phase of commercial development was completed in 2001, and the second being that systems development was internalized. Net Financial Results The net loss for the year ended December 31, 2002 was $1,900,000, an improvement of 44% when compared to a net loss of $3,400,000 in 2001. The net loss from continuing operations for the year ended December 31, 2002 was $1,800,000, an improvement of 35% when compared to a net loss from continuing operations of $2,800,000 in 2001. These improvements are attributable to the factors described herein. Additional Information
A more detailed set of financial statements and management's discussion and analysis may be accessed at the links below:
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Solium Capital Inc. The Canadian Venture Exchange has neither approved nor disapproved the information contained herein.
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