VIDWRX INC SMDWF

NR - SoMedia Networks Files Financial Results for the Three

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SoMedia Networks Files Financial Results for the Three Months

Ending March 31, 2014

VANCOUVER, British Columbia, May 21, 2014 -- SoMedia Networks (TSX-V:VID), the pioneer of globally scalable cloud-based video production solutions, reported results for the three month period ending March 31, 2014.

The results for the three months ending March 31, 2014 reflect 109% sales growth over the same period last year, or 36% sales growth over the previous quarter. During the quarter, the Company saw a 25% month over month growth in sales and an increase in average order size by 151%, while staffing costs were reduced by 29% over the previous quarter. During this period, SoMedia continued to modify and improve its operations and focus on increasing market penetration of its Scalable Video solutions, including the development of a third sales channel, SoMedia Direct.

Q1 2014 HIGHLIGHTS

• Achieved top line month over month sales growth of over 25% while reducing headcount by 29% over the previous quarter.

• Achieved record sales volume of $160,341, an increase of 36% over the previous quarter and 109% from the year-ago quarter.

• Average order size by repeat resellers increased 151% over the previous quarter as a result of focusing on higher-value existing and corporate clients.

• Total operating expenses decreased by 20% over the previous quarter, while the comprehensive loss decreased by 23% compared to the fourth quarter of 2013.

KEY PERFORMANCE INDICATORS
			For the quarter ended March 31, 2014			For the quarter ended December 31, 2013			For the quarter ended September 31, 2013			For the quarter ended June 30, 2013			For the quarter ended March 31, 2013
Average Headcount			20			33			40			40			34
Value of Orders			$160,341			117,366			130,623			107,518			76,665
Average Order Value – Repeat Sale			$2,107			1,223			1,729			1,593			1,821
Average Order Value – Initial Sale			$2,033			764			739			796			1,143

The measures described in this table are not intended to be measures that should be regarded as an alternative to other financial operating performance measures prepared in accordance with IFRS. Those measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. They are provided to assist investors in determining the Company’s ability to generate profitability from its operations and to evaluate its financial performance. For further descriptions of these terms, please refer to either the Company’s Management’s Discussion and Analysis for the period or to the ‘Definition of Key Performance Indicators’ section at the conclusion of this document.

“The first quarter saw a strong start to the year with a 25% month over month increase in sales while at the same time reducing headcount by 29%,” said George Fleming, CEO. “The Company continued to execute on its sales plan by optimizing lead nurturing programs and streamlining sales and marketing operations to focus on higher value partners. As a result, we made progress on our strategic objectives to grow and diversify our sales channels, including 52% growth in our web services channel and a 105% increase in our enterprise channel. Additionally, we saw a 102% increase over the previous quarter in repeat partner sales and a 36% increase in total sales.

“Looking ahead, we plan to continue to invest in sales optimization and growth initiatives such as the expansion of SoMedia Direct app integrations into large SaaS marketing and business services platforms. We are in a unique market position and have an opportunity to accelerate expansion of our Scalable Video technologies and platforms in the marketplace in 2014.”

FINANCIAL REVIEW

The company delivered higher revenues with lower costs as a direct result of adjusting to demand and reducing operating costs.

FINANCIAL PERFORMANCE

			2014			2013
			First quarter			Fourth quarter			First quarter
Revenues			91,209			77,579			40,947
Employment expenses			584,695			820,787			685,695
Other operating expenses			385,340			386,044			449,815
Non-operating expenses			50,278			73,589			236,041
Comprehensive loss for the period			929,104			1,202,929			1,330,575
Loss per share (basic and diluted)			$(0.03)			(0.07)			(0.12)

			As at March 31, 2014			As at December 31, 2013
Total assets			$910,908			$658,460
Long-term financial liabilities			$0			$0

Annual General Meeting Results

At the annual general meeting on May 20, 2014, shareholders voted in favor of all items put forward by the board of directors and management. All four individuals nominated for the board of directors - George Fleming, Ben Pickering, Beng Lai and Ash Katey were re-elected. Shareholders approved the appointment of MNP LLP, Chartered Accountants as auditors for the ensuring year and to fix their remuneration and approved the Company's stock option plan.

Also, the company received disinterested shareholder approval for the re-pricing of options for certain directors and officers with respect to an aggregate of 341,235 stock options from an exercise price of $0.85 per share to an exercise price of $0.50 per share, 64,985 of which were granted on February 27, 2012, 81,250 of which were granted on January 1, 2013 and 195,000 of which were granted on October 1, 2013. The re-pricing of the options is subject to the approval of the TSX Venture Exchange and no options may be exercised at the new price until such approval is obtained.

About SoMedia Networks

SoMedia Networks, the creator of Scalable Video, has reengineered how businesses access video content creation, production and deployment. The cloud-based SoMedia Platform allows businesses, brands and media to easily order the production of custom video content at scale and volume, anywhere, on demand, with rapid turnaround, and at a fraction of current costs.

SoMedia provides Scalable Video as an integrated solution to corporate partners, as a resale solution through thousands of web marketing firms and directly to digital agencies and millions of SMBs across North America. To learn more visit: www.somedia.net .

Definition of Key Performance Indicators

Average Headcount: The average number of persons employed in a full-time position during the quarter.

Value of Sales: The dollar value of videos sold during the period. A video is considered sold when a client makes an order and provides a deposit.

Average Order Value-Repeat Sales: A repeat sale is a sale made to a client with one or more prior purchases. The “Average order value – repeat sales” is the total of all orders received from repeat clients in the quarter, divided by the number of unique orders made by these clients.

Average Order Value - New sales: A new sale is a sale made to a client with no prior purchase history. The “Average order value - new sales” is the total orders received from new clients in the quarter, divided by the number of unique orders made by these clients.

FOR MORE INFORMATION:

Company Contact:

George Fleming, CEO

Tel: [phone]

Email: [e-mail]

Media Contact:

Annette Leach, Hotwire PR

Tel: [phone]

Email: [e-mail]

Canadian Investor Contact:

Ryan Jonson, SoMedia

Tel: [phone] x 570

Email: [e-mail]

U.S. Investor Contact:

Michael Koehler or Matt Glover, Liolios Group

Tel: [phone]

Email: [e-mail]

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release includes forward-looking statements that are subject to risks and uncertainties.All statements within, other than statements of historical fact, are to be considered forward looking.Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements.Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions.There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties.We do not assume any obligation to update any forward-looking statements. This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States.The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available

SOURCE: SoMedia Networks