Stockgroup Announces Profitable Third Quarter Results

7th Consecutive Quarterly Increase in Revenue, $0.26 Million in Positive Cash Flow


NEW YORK, Nov. 10, 2004 (PRIMEZONE) -- Stockgroup Information Systems Inc. (OTCBB:SWEB) (TSX Venture Exchange:SWB), a financial media and technology company, is pleased to announce its financial results for the third quarter ended September 30, 2004. There was a conference call to discuss the Q3 results Tuesday, Nov. 9 at 4:05pm EST. The full quarterly report on Form 10-QSB will be available on EDGAR and SEDAR today.

Highlights Q3, 2004 compared to Q3, 2003 (All amounts US$)



 -- Revenue increased 64% to $1.23 million
 -- Gross Profit increased 66% to $0.99 million
 -- Gross Profit Margin of 81%
 -- Cash From Operations of $0.26 million

Revenue for Q3, 2004 was US$1.23 million compared to US$0.75 million for Q3, 2003, an increase of 64%. Gross profit improved 66% to US$0.99 million from US$0.60 million in Q3 2003. Gross Profit Margin increased to 81% from 80% in 2003. Net Income for the Company was US$0.011 million and $0.00 per share compared to loss from operations of US$0.276 million ($0.01 per share) for Q3 2003.

Cash from operations was US$0.26 million compared to a loss of US$0.17 million in Q3 2003 an improvement of $0.43 million.

"Although traditionally the summer quarter is one of the slowest, we are proud to have delivered our seventh consecutive quarterly increase in revenue and second consecutive quarter of profits," stated Marcus New, CEO. "Our licensing business continues to sign new customers and our strategy of fulfilling more market information needs of our enterprise clients continues to generate success with additional incremental revenue. We are also delighted to see an increase in advertising for our media property Stockhouse.com."

Highlights 9-Months 2004 compared to 9-Months 2003 (All amounts US$)



 -- Revenue increased 70% to $3.46 million
 -- Gross Profit increased 80% to $2.80 million
 -- Net loss decreased 99% to $24,700 from $1.64 million
 -- Loss per share was $0.00 compared to a loss of $0.07

Revenue for the nine months ended September 30, 2004 was US$3.46 million compared to US$2.04 million for the same period 2003, an increase of 70%. Gross profit improved 80% to $2.80 million in 2004 from $1.55 million to the same period 2003. Loss from operations for the nine months was US$24,700 ($0.00/share) compared to US$1.64 million ($0.07/share) in fiscal 2003.

Management Changes

Mr. Leslie Landes, President and COO of Stockgroup will be retiring from his full time position with the company on December 31, 2004. Effective January 1, 2005, Mr. Landes will assume the role of Chairman of the Board replacing Marcus New who will be resigning as Chairman. Mr. New will continue in the capacity of President and Chief Executive Officer.

"We are thankful for the tremendous contribution Mr. Landes has made to the Company over the past six years. Mr. Landes has been instrumental in creating a Company that has stabilized itself financially, grown its customer base, built a great team of people, and has one of the most positive outlooks for the upcoming year that we have seen in the Company's history. On behalf of the entire company we want to thank Mr. Landes for his contribution and look forward to his continued involvement as the Chairman of the Board," stated Marcus New, CEO.

"I'm proud of the progress and accomplishments that Stockgroup has demonstrated," stated Leslie Landes, President. "We have been through the incredible turmoil that so negatively affected our industry sectors and resulted in so many terminal casualties. Today Stockgroup has the experience, the products and the people to do great things. We are better positioned today than ever before in our history to seize the market opportunities available to us."

Conference Call

A conference call and web cast was held on Tuesday, November 9, 2004 at 4:05pm EST to discuss the Company's third quarter results. To participate in the conference call, please dial 1-877-895-3312. Approximately 5-10 minutes prior to the start time or log on to the Company's website at www.stockgroup.com. The call will be archived for a period of thirty days.

ABOUT STOCKGROUP

Stockgroup Information Systems Inc. is a financial media and technology company. It is a provider of private labeled Financial Software and Content Systems to media, corporate and financial services companies. Stockgroup employs proprietary technologies, which enable its clients to provide financial data streams and news, combined with fundamental, technical, productivity and disclosure tools to their customers, shareholders and employees at a fraction of the cost of traditional internal methods. Stockgroup is also a provider of Public Company Disclosure and Awareness Products. Its financial Web sites, including www.stockhouse.com, www.stockhouse.ca and www.smallcapcenter.com, are online research centers for the investment community. To find out more about Stockgroup (OTCBB: SWEB, TSX-V: SWB), visit our website at www.stockgroup.com.

This release contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact and may be "forward looking statements." Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through the use of words such as "expects", "will," "anticipates," "estimates," "believes," or statements indicating certain actions "may," "could," or "might" occur.

This release has neither been approved or disapproved by the TSX



                           Stockgroup Information Systems Inc.
                          CONSOLIDATED STATEMENTS OF OPERATIONS
                         (UNAUDITED -- Expressed in U.S. Dollars)


                   Three Months Three Months  Nine Months  Nine Months
                      Ended        Ended        Ended        Ended
                    September    September    September    September 
                     30, 2004     30, 2003     30, 2004     30, 2003
                   ------------ ------------ ------------ ------------
 REVENUE

  Revenues         $  1,226,986 $    745,801 $  3,458,171 $  2,036,044
  Cost of revenues      237,954      150,529      658,536      484,215
                   ------------ ------------ ------------ ------------
  Gross profit     $    989,032 $    595,272 $  2,799,635 $  1,551,829

 EXPENSES

  Sales and
   marketing       $    372,815 $    220,877 $  1,100,505 $    545,692
  General and
   administrative       610,911      640,018    1,738,730    1,751,807
                   ------------ ------------ ------------ ------------
                   $    983,726 $    860,895 $  2,839,235 $  2,297,499
                   ------------ ------------ ------------ ------------
 INCOME (LOSS) 
  FROM
  OPERATIONS       $      5,306 $   (265,623)$    (39,600)$   (745,670)

 Interest income          4,581          134       14,939          134
 Interest expense           (37)      (8,803)      (1,660)    (893,801)
 Other income
  (expense)               1,599       (1,604)       1,602        1,521
                   ------------ ------------ ------------ ------------
 NET INCOME (LOSS)
  AND 
  COMPREHENSIVE
  INCOME (LOSS)    $     11,449 $   (275,896)$    (24,719)$ (1,637,816)
                   ============ ============ ============ ============
 BASIC AND DILUTED
  INCOME (LOSS) 
  PER SHARE        $       0.00 $      (0.01)$      (0.00)$      (0.07)
                   ============ ============ ============ ============
 Weighted average
  shares 
  outstanding for 
  the period         34,643,763   29,246,784   34,064,667   24,688,123
                   ============ ============ ============ ============


                       Stockgroup Information Systems Inc.
                         CONSOLIDATED BALANCE SHEETS
                    (UNAUDITED - Expressed in U.S. Dollars)

                                     September 30,    December 31,
                                        2004            2003 (1)
                                     -----------     ------------
 ASSETS
  CURRENT                        
   Cash and cash equivalents         $  1,624,141   $  1,400,195
  Marketable securities                   52,314           2,616
  Accounts receivable 
   (net of allowances for
    doubtful accounts of
    $76,734; December 31, 2003
    $45,016)
                                         451,488         325,057
  Prepaid expenses                       111,669          79,648
                                      ------------    ------------
  TOTAL CURRENT ASSETS              $  2,239,612    $  1,807,516
   Property and equipment, net      $    386,268    $    311,632
                                     ------------    ------------
                                    $  2,625,880    $  2,119,148
                                     ============    ============
 LIABILITIES AND SHAREHOLDERS'
  EQUITY
  CURRENT
  Accounts payable and accrued
   liabilities                      $    267,824    $    217,110
  Accrued payroll liabilities             99,218         115,208
  Deferred revenue                       685,597         499,525
  Capital lease obligation                    --          38,920
                                     ------------    ------------
     TOTAL LIABILITIES              $  1,052,639    $    870,763

 COMMITMENTS AND CONTINGENCIES

 SHAREHOLDERS' EQUITY
  COMMON STOCK, No Par Value
  Authorized shares - 75,000,000
  Issued and outstanding shares 
  - 33,931,221
   at Sept. 30, 2004 
   (32,498,721 - December 31,
    2003)                           $ 13,568,499    $ 13,218,924
  ADDITIONAL PAID-IN CAPITAL           3,099,314       3,099,314
  ACCUMULATED DEFICIT                (15,094,572)    (15,069,853)
                                     ------------    ------------
 TOTAL SHAREHOLDERS' EQUITY         $  1,573,241    $  1,248,385
                                     ------------    ------------
                                    $  2,625,880    $  2,119,148
                                     ============    ============

 (1) The balance sheet at December 31, 2003 has been derived from 
     the audited consolidated financial statements at that date.

              The Accompanying Notes Are An Integral Part
               Of These Unaudited Financial Statements.



                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (UNAUDITED -- Expressed in U.S. Dollars)

                     Three Months Three Months Nine Months Nine Months
                        Ended       Ended        Ended       Ended
                      September   September    September   September
                       30, 2004    30, 2003     30, 2004    30, 2003
 OPERATING 
  ACTIVITIES         ----------- -----------  ----------- -----------
 Net income (loss)   $    41,701 $  (275,896) $     5,533 $(1,637,816)
 Add (deduct) 
  non-cash items
  Amortization            79,625      96,500      264,746     286,353
  Effective interest
   on convertible
   notes and
   debentures                 --          --           --     860,351
  Bad debt expense
   (recovery)             (4,145)     13,003       31,718      65,656
  Unrealized foreign
   exchange gain              --          --           --      23,761
                     ----------- -----------  ----------- -----------
                     $   117,181 $  (166,392) $   301,997 $  (401,695)
  Net changes in
   non-cash
   working capital
  Marketable
   securities            (25,231)      1,603      (49,698)     (1,511)
  Accounts 
   receivable                146      (6,916)    (158,127)   (249,483)
  Prepaid expenses        33,428       3,655      (32,021)     21,595
  Accounts payable 
   and accrued 
   liabilities            39,649      (9,369)      50,712     (28,874)
  Accrued payroll
   liabilities             7,364      10,955      (15,990)    (42,556)
  Accrued interest
   notes payable              --     (15,836)          --     (23,763)
  Deferred revenue        87,955      14,181      186,072       6,120
                     ----------- -----------  ----------- -----------
 CASH PROVIDED BY
  (USED IN)
  OPERATIONS         $   260,492 $  (168,119) $   282,945 $  (720,167)
                     ----------- -----------  ----------- -----------
 INVESTING 
  ACTIVITIES
  Property and
   equipment (net)   $   (41,742)$   (10,220) $   (78,954)$   (27,859)
                     ----------- -----------  ----------- -----------
 CASH USED IN
  INVESTING          $   (41,742)$   (10,220) $   (78,954)$   (27,859)
                     ----------- -----------  ----------- -----------
 FINANCING 
  ACTIVITIES
  Issuance of common
   stock and
   warrants (net)    $        -- $   215,278  $        -- $   840,559
  Proceeds on 
   exercise of 
   warrants                   --     498,000           --     581,775
  Proceeds on 
   exercise of stock 
   options                    --         450       58,875      12,420
  Repayment of
   (proceeds from)
   convertible debt           --          --           --     (35,332)
  Repayment of notes
   payable                    --    (208,158)          --    (255,158)
  Repayment of 
   capital lease 
   obligation                 --     (20,525)     (38,920)    (76,144)
                     ----------- -----------  ----------- -----------
 CASH PROVIDED BY
  FINANCING          $        -- $   485,045  $    19,955 $ 1,068,120
                     ----------- -----------  ----------- -----------
 INCREASE IN CASH
  AND CASH 
  EQUIVALENTS        $   218,750 $   306,706  $   223,946 $   320,094
 Cash and cash
  equivalents,
  beginning of 
  period               1,405,391     553,358    1,400,195     539,970
                     ----------- -----------  ----------- -----------
 CASH AND CASH
  EQUIVALENTS,
  END OF PERIOD      $ 1,624,141 $   860,064  $ 1,624,141 $   860,064
                     =========== ===========  =========== ===========


                 The Accompanying Notes Are An Integral Part
                   Of These Unaudited Financial Statements.


            

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