EX-2 8 newsreleaseyearended.htm NEWS RELEASE - 2005 YEAR ENDED RESULTS PRESS RELEASE



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Trading Symbols (LMD:TSX V; LNGMF:OTC BB)


151 Bloor St West                                       Kenzo Oriental Tower 11K  

Suite 890                                                        48 Dongzhimenwai Dajie

 Toronto, Ontario                                                    Dongcheng District

 Canada M5S 1S4                                                  Beijing 100027 China

 Tel :  +1.416.927.7000                                    Tel:  +011.8610.5160.0689

 Fax : +1.416.927.1222                                   Fax:  +011.8610.5160.0788

www.lingomedia.com

PRESS  RELEASE

FOR IMMEDIATE RELEASE


Lingo Media Reports 2005 Year End Result


Toronto, Canada, May 2, 2006 - Lingo Media Inc. (LMD: TSX V; LNGMF: OTC BB) (the “Company” or “Lingo Media”), announces its financial results for the year ended December 31, 2005.

The 2005 year-end results compared with 2004, reported in Canadian dollars, are as follows:


Consolidated Balance Sheets

 (Expressed in Canadian dollars)


As At December 31

2005

2004

   

Assets

  
   

Current assets:

  

Cash

$     144,337

$     29,791

Accounts and grants receivable

488,303

562,558

Inventory

34,084

23,291

Prepaid and sundry assets

134,348

133,833

 

801,072

749,473

   

Investment and advances

182,520

-

Deferred costs

117,102

-

Property and equipment, net

48,770

54,491

Development costs, net

408,633

489,325

Acquired publishing content, net

53,003

123,673

 

$     1,611,100

$     1,416,962

   

Liabilities and Shareholders’ Equity

  
   

Current liabilities:

  

Bank loan

$     110,000

$     90,000

Accounts payable

247,547

252,726

Accrued liabilities

63,844

58,000

Loans payable

101,929

77,762

 

523,320

478,488

   

Shareholders’ equity:

  

Capital stock

3,996,971

3,367,119

Contributed surplus

288,437

74,100

Warrants

30,849

-

Deficit

(3,228,477)

(2,502,745)

 

1,087,780

938,474

Commitments

  
 

$     1,611,100

$     1,416,962














Consolidated Statements of Operations


For the years ended December 31

2005

2004

   

Revenue

$     906,357

$     589,654

   

Direct costs

123,107

94,990

Margin

783,250

494,664

   

Expenses:

  

General and administrative

855,118

651,232

Amortization

267,819

488,776

Interest and other financial expenses

42,869

19,931

Stock-based compensation

214,337

52,176

 

1,380,143

1,212,115

   

Loss before income taxes and other taxes

(596,893)

(717,451)

   

Income taxes and other taxes

128,839

77,926

   

Net loss for the year

(725,732)

(795,377)

   

Loss per share

$     (0.03)

$     (0.04)

   

Weighted average number of

Common shares outstanding


24,711,619


22,626,746









Consolidated Statements of Cash Flows


For the years ended December 31

2005

2004

   

Cash flows provided by (used in):

  

Operations:

  

Net loss for the year

$     (725,732)

$     (795,377)

Items not affecting cash:

  

Amortization of property and equipment

12,278

9,078

Amortization of development costs

184,797

377,903

Amortization of acquired publishing content

70,670

70,670

Amortization of software development costs

-

31,046

Stock-based compensation

214,337

52,176

Change in non-cash balances related to operations:

  

Accounts and grants receivable

74,255

(34,466)

Inventory

(10,793)

5,818

Prepaid and sundry assets

(514)

(99,849)

Accounts payable

(5,181)

107,529

Accrued liabilities

5,845

25,952

Interest payable

(833)

2,762

Cash used by operating activities

(180,871)

(246,758)

   

Financing:

  

Increas4e in bank loan

20,000

90,000

Increase in loans payable

248,500

290,000

Repayment of loans payable

(223,500)

(215,000)

Issuance of capital stock

745,800

93,517

Share issue costs

(85,099)

(32,191)

Cash provided by financing activities

705,701

226,326

   

Investing:

  

Investment and advances

(182,520)

-

Purchase of property and equipment

(6,556)

(21,725)

Deferred costs

(117,102)

-

Development costs

(104,106)

(160,554)

Cash used in investing activities

(410,284)

(182,279)

Increase in cash

114,546

(202,711)

Cash, beginning of year

29,791

232,502

Cash, end of year

$     144,337

$     29,791

Supplemental cash flow information:

  

Income taxes and other taxes paid

$     157,121

$     41,189

Interest paid

$     9,838

$     11,368








The notes are an integral part of the financial statements and as such should be read in conjunction with the complete annual audited financial statements and Management’s Discussion and Analysis for the year ended December 31, 2005 available at www.sedar.com.  


During the fiscal year 2005, Lingo Media focused on its core royalty co-publishing business with People’s Education Press in China and continued to pursue its China Expansion Plan.


Highlights of the year are as follows:


·

Revenues increased by 53% over 2004 fiscal year end.

·

Maintained the Company’s dominant market share of over 60% of the primary English language learning textbook market in China through its co-publishing agreement with People’s Education Press selling its 100 millionth copy.

·

Signed the Company’s first Sino-Foreign JV with Sanlong Cultural Communication Co. Ltd. for a 51% ownership interest in the Hebei Jintu Education Book Co. Ltd. Joint Venture (“Jintu JV”).  To date, this Joint Venture has received approvals from the General Administration of Press and Publications Bureau and from the Ministry of Commerce and is currently awaiting its business license registration expected by the end of Q2 2006.

·

Signed a second Sino-Foreign JV Agreement with Liaoning Publishing Group for a 51% ownership interest in an English language learning product and services joint venture awaiting Chinese regulatory approval.  Liaoning Publishing Group is a RMB 3.645 billion (US$450 million) Chinese publishing conglomerate headquartered in Shenyang, Liaoning Province, PRC.

·

Developing new English language learning programs and is pursuing co-publishing agreements with PEP and other Chinese publishers.

·

Enhanced our Board of Directors with the addition of Nereida Flannery, a market entry and relationship expert based in China.

Michael Kraft, President & CEO of Lingo Media, commented on the results, “We have started to develop two new English language learning programs and are confident that we can secure strong co-publishing partners and incremental revenues through this organic growth strategy during the second half of 2006.  Under our China Expansion Plan, the Jintu JV will provide increased revenue and establish a new distribution channel, which will serve as a valuable direct-to-consumer selling platform. In 2006, we plan to add new products such as newspapers and magazines which will transform our co-publishing royalty business into an integrated publishing and distribution company with increased top-line sales.”


About Lingo Media

Lingo Media is a leading publisher of English language learning programs in China, incorporating print, audio/video cassette and CD-based products for students and teachers from pre-school through university. Founded in 1996, Lingo Media has an established presence in the Chinese educational market of more than 200 million English language students.  To date, over 100 million units from Lingo Media's library of more than 285 program titles have been published and sold in China.  While Lingo Media remains focused on its royalty-based educational publishing business, it is advancing its China Expansion Plan to establish itself as a distributor of educational print media including books, newspapers and magazines in China.

For further information, contact:

Michael P. Kraft, President & CEO

Tel: (416) 927-7000, ext. 23

Toll Free Tel: (866) 927-7011

Email: investor@lingomedia.com

To learn more, visit www.lingomedia.com

Portions of this press release include "forward-looking statements", which may be understood as any statement other than a statement of historical fact.  Forward-looking statements contained in this press release are made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995.  These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances.  Actual results may vary materially from management's expectations and projections expressed in this press release.  Certain factors that can affect the Company's ability to achieve projected results are described in the Company's Annual Report 20-F and other reports filed with the Securities and Exchange Commission. 

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