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.
------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 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 -------------------------------------------------------------------------
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) ------------------------------------------------------------------------- December 31, December 31, 2009 2008 (Audited) (Audited) ------------ ------------ 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 ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- $ 26,221 $ 41,958 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 7,469 6,664 FUTURE INCOME TAX LIABILITIES - 244 ------------------------------------------------------------------------- 7,469 6,908 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY CAPITAL STOCK 23,754 23,930 CONTRIBUTED SURPLUS 4,044 3,686 RETAINED EARNINGS (DEFICIT) (9,046) 7,434 ------------------------------------------------------------------------- 18,752 35,050 ------------------------------------------------------------------------- $ 26,221 $ 41,958 ------------------------------------------------------------------------- ------------------------------------------------------------------------- BELZBERG TECHNOLOGIES INC. Consolidated Statements of Operations and Retained Earnings (Deficit) (in thousands of Canadian dollars, except per share amounts) (Three month periods unaudited) ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 7,942 12,234 38,211 41,761 Cost of exchange and clearance fees (2,916) (4,383) (15,097) (11,496) ------------------------------------------------------------------------- TOTAL NET REVENUE 5,026 7,851 23,114 30,265 ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- 7,184 8,727 30,221 31,396 ------------------------------------------------------------------------- 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) ------------------------------------------------------------------------- 4,290 62 6,617 (313) ------------------------------------------------------------------------- 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) ------------------------------------------------------------------------- 4,453 (688) 2,756 (936) ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- RETAINED EARNINGS (DEFICIT), END OF PERIOD (9,046) 7,434 (9,046) 7,434 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EARNINGS (LOSS) PER SHARE: Basic $ (0.74) $ (0.02) $ (1.11) $ 0.01 Diluted $ (0.74) $ (0.02) $ (1.11) $ 0.01 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- ------------------------------------------------------------------------- BELZBERG TECHNOLOGIES INC. Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (Three month periods unaudited) ------------------------------------------------------------------------- Three months ended Twelve months ended December 31, December 31, 2009 2008 2009 2008 ----------- ----------- ----------- ----------- 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) ------------------------------------------------------------------------- 3,098 665 (1,114) (367) ------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------- (49) (516) (943) (2,706) ------------------------------------------------------------------------- FINANCING ACTIVITIES Repayment of obligations under capital lease - - - (27) Repurchase of common shares (65) - (97) (306) Proceeds from the exercise of stock options - - - 364 ------------------------------------------------------------------------- (65) - (97) 31 ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 15,670 $ 19,452 $ 15,670 $ 19,452 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS: Cash $ 3,795 $ 2,703 $ 3,795 $ 2,703 Cash equivalents 11,875 16,749 11,875 16,749 ------------------------------------------------------------------------- $ 15,670 $ 19,452 $ 15,670 $ 19,452 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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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