Belzberg Reports Fourth Quarter and Annual 2009 Financial Results
TORONTO, March 16 /PRNewswire-FirstCall/ - Belzberg Technologies Inc. (TSX -BLZ), a provider of technology-based equity and options trading services, announced today its financial results for the three and twelve months ended December 31, 2009.
"Belzberg's disappointing financial performance in 2009 reflects the difficult market conditions," said Judith Robertson, President and CEO. "Despite the important operational improvements to our products and service, we were not able to compensate for the revenue lost through lower volumes, price compression and competition. Our success in reducing operating costs was helpful, but was not sufficient on its own to return the Company to profitability."
Major elements of the fourth quarter statements include:
- Unusual expense items of approximately $1.1M relating to the
Company's announced restructuring and strategic initiatives.
- Non-cash charges of approximately $7.8M related to write-downs of
intangible assets and tax losses and foreign exchange translation
loss.
"Management is aggressively pursuing strategies to improve the Company's financial performance," said Judith Robertson, President and CEO. "Our recently announced reorganization will eliminate a further $1.4M in annual costs and better position the organization. In addition, we continue to seek scale through partnerships and combinations."
Other elements of the reorganization include:
- Elimination of 20 positions (19% of workforce) since the 3rd quarter
2009.
- Salary freezes for employees and rationalization and salary
reductions for senior management.
- Hiring of Andrew Brenner to lead our US sales efforts.
Total revenues for the fourth quarter decreased 35% to $7.9 million versus $12.2 million in the same year-ago period. Net revenues for the fourth quarter decreased 36% to $5.0 million versus $7.9 million in the same year-ago period. The net loss for the fourth quarter was $10.9 million (including unusual non-cash charges of $7.5 million and restructuring charges of $0.8 million) as compared to a net loss of $0.3 million (including restructuring charges of $1.0 million and a future tax recovery of $0.7 million) same quarter last year. Diluted loss per share for the fourth quarter was $(0.74) including $(0.56) related to restructuring and unusual non-cash charges. This compared to a loss of $(0.02) per share including restructuring and non-cash charges of ($0.03) in the same year-ago period.
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Financial Highlights
(in millions of dollars, Three months ended Twelve months ended
except per share data) December 31, December 31,
(Three month periods unaudited) 2009 2008 2009 2008
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Total revenue $ 7.9 $ 12.2 $ 38.2 $ 41.8
Net revenue $ 5.0 $ 7.9 $ 23.1 $ 30.3
Net earnings (loss) $ (10.9) $ (0.3) $ (16.5) $ 0.1
Net earnings (loss) before
restructuring and unusual
non-cash charges $ (2.6) $ 0.1 $ (9.0) $ 0.2
Diluted earnings (loss)
per share $ (0.74) $ (0.02) $ (1.11) $ 0.01
Diluted earnings (loss)
per share before
restructuring and unusual
non-cash charges $ (0.17) $ 0.01 $ (0.61) $ 0.02
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The Company's financial position included cash and cash equivalents of $15.7 million and working capital of $16.2 million at December 31, 2009.
About Belzberg Technologies
Belzberg Technologies Inc. is a provider of trading technology and technology-based brokerage services for equities and options. Using Belzberg's suite of integrated trading tools and network connectivity, Belzberg's customers have direct access to all major North American markets. Belzberg Technologies is listed on the Toronto Stock Exchange (Ticker-BLZ) - additional information is available at www.belzberg.com.
Forward looking statement disclaimer
Except for historical information contained herein, the matters discussed in this press release are based on forward-looking statements that involve risk and uncertainty. A variety of important factors could cause results to differ materially from such statements, including but not limited to economic, competitive, governmental and technological factors affecting the company's operation, markets, products, prices and other factors.
BELZBERG TECHNOLOGIES INC.
Consolidated Balance Sheets
(in thousands of Canadian dollars)
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December 31, December 31,
2009 2008
(Audited) (Audited)
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ASSETS
CURRENT
Cash and cash equivalents $ 15,670 $ 19,452
Cash and cash equivalents segregated under
regulations and other 2,805 184
Cash and cash equivalents on deposit with
clearing and depository organizations 1,363 1,989
Receivable from brokers, dealers and
clearing organizations 947 1,774
Accounts receivable 2,405 5,973
Prepaid expenses and other receivables 468 534
Other assets - 1,565
Income taxes receivable 12 89
Investment tax credits recoverable - 84
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23,670 31,644
CAPITAL ASSETS 2,233 3,326
INVESTMENT 30 38
INVESTMENT TAX CREDITS RECOVERABLE 147 1,580
FUTURE INCOME TAX ASSETS - 3,289
GOODWILL - 1,608
OTHER INTANGIBLE ASSETS, NET 141 473
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$ 26,221 $ 41,958
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LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 5,176 $ 6,350
Payable to customers and correspondents 1,948 183
Payable to brokers, dealers and
clearing organizations 345 131
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7,469 6,664
FUTURE INCOME TAX LIABILITIES - 244
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7,469 6,908
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SHAREHOLDERS' EQUITY
CAPITAL STOCK 23,754 23,930
CONTRIBUTED SURPLUS 4,044 3,686
RETAINED EARNINGS (DEFICIT) (9,046) 7,434
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18,752 35,050
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$ 26,221 $ 41,958
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BELZBERG TECHNOLOGIES INC.
Consolidated Statements of Operations and Retained Earnings (Deficit)
(in thousands of Canadian dollars, except per share amounts)
(Three month periods unaudited)
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Three months ended Twelve months ended
December 31, December 31,
2009 2008 2009 2008
----------- ----------- ----------- -----------
REVENUE
Equity order flow
and clearing $ 4,353 $ 6,463 $ 21,032 $ 17,942
Options and futures
contracts 2,192 3,679 10,815 15,220
Subscription fees 1,075 1,683 4,907 7,087
Other revenue 322 409 1,457 1,512
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7,942 12,234 38,211 41,761
Cost of exchange and
clearance fees (2,916) (4,383) (15,097) (11,496)
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TOTAL NET REVENUE 5,026 7,851 23,114 30,265
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EXPENSES
Compensation and
related benefits 2,881 3,610 12,824 12,502
Telecommunication
and datafeed services 1,842 2,051 7,774 6,988
Administrative and
other expenses 1,121 1,511 4,235 5,279
Brokerage fees 840 988 3,144 4,525
Amortization of
capital assets 463 507 2,042 1,904
Amortization of
intangible assets 37 60 202 198
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7,184 8,727 30,221 31,396
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LOSS BEFORE THE UNDERNOTED (2,158) (876) (7,107) (1,131)
Restructuring expenses 819 1,052 1,658 1,052
Government assistance 1,390 (60) 1,295 (60)
Impairment of goodwill
and intangible assets 1,745 - 1,745 -
Foreign exchange (gain)
loss 355 (814) 2,087 (727)
Interest expense 3 1 25 4
Interest income (22) (117) (193) (582)
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4,290 62 6,617 (313)
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LOSS BEFORE INCOME TAXES (6,448) (938) (13,724) (818)
PROVISION FOR (RECOVERY OF)
INCOME TAXES
Current 149 (9) 149 -
Future 4,304 (679) 2,607 (936)
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4,453 (688) 2,756 (936)
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NET EARNINGS (LOSS) (10,901) (250) (16,480) 118
RETAINED EARNINGS
(DEFICIT), BEGINNING OF
PERIOD 1,855 7,684 7,434 (8,684)
REDUCTION OF STATED
CAPITAL - - - 16,000
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RETAINED EARNINGS
(DEFICIT), END OF PERIOD (9,046) 7,434 (9,046) 7,434
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EARNINGS (LOSS) PER
SHARE:
Basic $ (0.74) $ (0.02) $ (1.11) $ 0.01
Diluted $ (0.74) $ (0.02) $ (1.11) $ 0.01
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WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING
(in thousands)
Basic 14,797 14,835 14,820 14,829
Diluted 14,797 14,835 14,820 14,879
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BELZBERG TECHNOLOGIES INC.
Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(Three month periods unaudited)
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Three months ended Twelve months ended
December 31, December 31,
2009 2008 2009 2008
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CASH PROVIDED BY
(USED FOR)
OPERATING ACTIVITIES
Net earnings (loss) $ (10,901) $ (250) $ (16,480) $ 118
Items not affecting
cash
Amortization of
capital assets 463 507 2,042 1,904
Amortization of
intangible assets 37 60 202 198
Impairment of
goodwill and
intangible assets 1,745 - 1,745 -
Unrealized foreign
exchange loss (gain) 177 (764) 1,628 (1,413)
Gain on sale of
investment - - (5) -
Stock-based
compensation 61 163 279 283
Future income taxes 4,341 (894) 3,045 (1,226)
Changes in non-cash
working capital items 7,175 1,843 6,430 (231)
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3,098 665 (1,114) (367)
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INVESTING ACTIVITIES
Purchase of capital
assets (49) (495) (949) (2,473)
Purchase of intangibles - - (7) (212)
Purchase of investment - - (2) -
Contribution for
interest in a joint
venture - (21) - (21)
Proceeds from sale of
investment - - 15 -
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(49) (516) (943) (2,706)
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FINANCING ACTIVITIES
Repayment of obligations
under capital lease - - - (27)
Repurchase of common
shares (65) - (97) (306)
Proceeds from the
exercise of stock
options - - - 364
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(65) - (97) 31
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Effect of exchange rate
changes on cash and
cash equivalents (177) 764 (1,628) 1,413
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS 2,807 913 (3,782) (1,629)
CASH AND CASH
EQUIVALENTS,
BEGINNING OF PERIOD 12,863 18,539 19,452 21,081
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CASH AND CASH
EQUIVALENTS, END
OF PERIOD $ 15,670 $ 19,452 $ 15,670 $ 19,452
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CASH AND CASH
EQUIVALENTS:
Cash $ 3,795 $ 2,703 $ 3,795 $ 2,703
Cash equivalents 11,875 16,749 11,875 16,749
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$ 15,670 $ 19,452 $ 15,670 $ 19,452
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SUPPLEMENTAL CASH
FLOW INFORMATION
Interest received $ 23 $ 169 $ 202 $ 633
Interest paid 3 1 25 4
Income taxes paid 72 22 90 219
SOURCE Belzberg Technologies Inc.
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