Belzberg Reports Fourth Quarter and Annual 2010 Financial Results
TORONTO, March 22 /PRNewswire-FirstCall/ - Belzberg Technologies Inc. (TSX: BLZ), a provider of technology and trading services, today announced its financial results for the three and twelve months ended December 31, 2010.
Net revenues for the fourth quarter decreased 28% to $3.6 million versus $5.0 million in the same year-ago period. The net loss for the fourth quarter was $2.0 million as compared to a net loss of $10.9 million (including unusual non-cash charges of $7.5 million and restructuring charges of $0.8 million) in the same quarter last year. Diluted loss per share for the fourth quarter was $(0.14). This compared to a loss of $(0.74) per share including $(0.56) related to restructuring and unusual non-cash charges in the same year-ago period.
The Company's financial position included cash and cash equivalents of $8.3 million and working capital of $10.3 million at December 31, 2010.
| Financial Highlights | Three months ended | Twelve months ended | ||
| (in millions of dollars, except per share data) | December 31, | December 31, | ||
| (Three month periods unaudited) | 2010 | 2009 | 2010 | 2009 |
| Total revenue | $ 3.3 | $ 7.9 | $ 16.5 | $ 38.2 |
| Net revenue | $ 3.6 | $ 5.0 | $ 15.0 | $ 23.1 |
| Net loss | $ (2.0) | $ (10.9) | $ (7.5) | $ (16.5) |
| Diluted loss per share | $ (0.14) | $ (0.74) | $ (0.51) | $ (1.11) |
On February 23, 2011 Belzberg announced a change in its strategic direction to refocus on its technology business. At the same time, Belzberg announced a definitive agreement to merge with Frontline Technologies Corporation ("Frontline") through an acquisition of Frontline by Belzberg. The Frontline transaction is expected to close in the second quarter of 2011 and is subject to customary closing conditions, including all necessary regulatory and stock exchange approvals and approval by the shareholders of Belzberg.
As part of this new strategic direction, Belzberg announced that it had entered into an agreement to refer most of the clients of its US execution businesses to the ConvergEx Group. It is Belzberg's intention to pay a special distribution to the holders of its existing common shares within a year of the closing of the Frontline transaction. Shareholders are invited to review the Management Information Circular, dated March 11, 2010 for additional information related to these announcements.
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, | |||||||
| 2010 | 2009 | |||||||
| (Audited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT | ||||||||
| Cash and cash equivalents | $ 8,319 | $ 15,670 | ||||||
| Cash and cash equivalents segregated under regulations and other | 2,143 | 2,805 | ||||||
| Cash and cash equivalents on deposit with clearing and depository organizations | 1,630 | 1,363 | ||||||
| Receivable from brokers, dealers and clearing organizations | 168 | 947 | ||||||
| Accounts receivable | 1,718 | 2,405 | ||||||
| Prepaid expenses and other receivables | 346 | 468 | ||||||
| Securities borrowed | 6,186 | - | ||||||
| Income taxes receivable | - | 12 | ||||||
| 20,510 | 23,670 | |||||||
| CAPITAL ASSETS | 1,096 | 2,233 | ||||||
| INVESTMENT | 30 | 30 | ||||||
| INVESTMENT TAX CREDITS RECOVERABLE | - | 147 | ||||||
| OTHER INTANGIBLE ASSETS, NET | 77 | 141 | ||||||
| $ 21,713 | $ 26,221 | |||||||
| LIABILITIES | ||||||||
| CURRENT | ||||||||
| Accounts payable and accrued liabilities | $ 2,336 | $ 5,176 | ||||||
| Payable to customers and correspondents | 1,733 | 1,948 | ||||||
| Payable to brokers, dealers and clearing organizations | - | 345 | ||||||
| Securities loaned | 6,186 | - | ||||||
| 10,255 | 7,469 | |||||||
| SHAREHOLDERS' EQUITY | ||||||||
| CAPITAL STOCK | 23,612 | 23,754 | ||||||
| CONTRIBUTED SURPLUS | 4,391 | 4,044 | ||||||
| DEFICIT | (16,545) | (9,046) | ||||||
| 11,458 | 18,752 | |||||||
| $ 21,713 | $ 26,221 | |||||||
| 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 December 31, | Twelve months ended December 31, | |||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||
| REVENUE | ||||||||||||
| Equity order flow and clearing | $ 497 | $ 4,353 | $ 4,930 | $ 21,032 | ||||||||
| Options and futures contracts | 1,724 | 2,192 | 6,956 | 10,815 | ||||||||
| Subscription fees | 770 | 1,075 | 3,349 | 4,907 | ||||||||
| Other revenue | 310 | 322 | 1,306 | 1,457 | ||||||||
| 3,301 | 7,942 | 16,541 | 38,211 | |||||||||
| Cost of exchange and clearance fees | 341 | (2,916) | (1,491) | (15,097) | ||||||||
| TOTAL NET REVENUE | 3,642 | 5,026 | 15,050 | 23,114 | ||||||||
| EXPENSES | ||||||||||||
| Compensation and related benefits | 2,097 | 2,881 | 8,891 | 12,824 | ||||||||
| Telecommunication and datafeed services | 1,475 | 1,842 | 6,299 | 7,774 | ||||||||
| Administrative and other expenses | 790 | 1,121 | 3,023 | 4,235 | ||||||||
| Brokerage fees | 621 | 840 | 2,223 | 3,144 | ||||||||
| Amortization of capital assets | 335 | 463 | 1,550 | 2,042 | ||||||||
| Amortization of intangible assets | 24 | 37 | 124 | 202 | ||||||||
| 5,342 | 7,184 | 22,110 | 30,221 | |||||||||
| LOSS BEFORE THE UNDERNOTED | (1,700) | (2,158) | (7,060) | (7,107) | ||||||||
| Restructuring expenses | - | 819 | (221) | 1,658 | ||||||||
| Government assistance | - | 1,390 | (11) | 1,295 | ||||||||
| Impairment of goodwill and intangible assets | - | 1,745 | - | 1,745 | ||||||||
| Foreign exchange loss | 375 | 355 | 666 | 2,087 | ||||||||
| Interest expense | 3 | 3 | 10 | 25 | ||||||||
| Interest income | (1) | (22) | (5) | (193) | ||||||||
| 377 | 4,290 | 439 | 6,617 | |||||||||
| LOSS BEFORE INCOME TAXES | (2,077) | (6,448) | (7,499) | (13,724) | ||||||||
| PROVISION FOR INCOME TAXES | ||||||||||||
| Current | - | 149 | - | 149 | ||||||||
| Future | - | 4,304 | - | 2,607 | ||||||||
| - | 4,453 | - | 2,756 | |||||||||
| NET LOSS | (2,077) | (10,901) | (7,499) | (16,480) | ||||||||
| RETAINED EARNINGS (DEFICIT), BEGINNING OF PERIOD | (14,468) | 1,855 | (9,046) | 7,434 | ||||||||
| DEFICIT, END OF PERIOD | (16,545) | (9,046) | (16,545) | (9,046) | ||||||||
| LOSS PER SHARE: | ||||||||||||
| Basic | $ (0.14) | $ (0.74) | $ (0.51) | $ (1.11) | ||||||||
| Diluted | $ (0.14) | $ (0.74) | $ (0.51) | $ (1.11) | ||||||||
| WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in thousands) |
||||||||||||
| Basic | 14,638 | 14,797 | 14,647 | 14,820 | ||||||||
| Diluted | 14,638 | 14,797 | 14,647 | 14,820 | ||||||||
| BELZBERG TECHNOLOGIES INC. Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (Three month periods unaudited) |
|||||||||||
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||
| CASH PROVIDED BY (USED FOR) | |||||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net earnings (loss) | $ (2,077) | $ (10,901) | $ (7,499) | $ (16,480) | |||||||
| Items not affecting cash | |||||||||||
| Amortization of capital assets | 335 | 463 | 1,550 | 2,042 | |||||||
| Amortization of intangible assets | 24 | 37 | 124 | 202 | |||||||
| Impairment of goodwill and intangible assets | - | 1,745 | - | 1,745 | |||||||
| Unrealized foreign exchange loss (gain) | 283 | 177 | 550 | 1,628 | |||||||
| Gain on sale of investment | - | - | - | (5) | |||||||
| Stock-based compensation | 63 | 61 | 272 | 279 | |||||||
| Future income taxes | - | 4,341 | - | 3,045 | |||||||
| Changes in non-cash working capital items | 1,411 | 7,175 | (1,258) | 6,430 | |||||||
| 39 | 3,098 | (6,261) | (1,114) | ||||||||
| INVESTING ACTIVITIES | |||||||||||
| Purchase of capital assets | (190) | (49) | (413) | (949) | |||||||
| Purchase of intangibles | (60) | - | (60) | (7) | |||||||
| Purchase of investment | - | - | - | (2) | |||||||
| Proceeds from sale of investment | - | - | - | 15 | |||||||
| (250) | (49) | (473) | (943) | ||||||||
| FINANCING ACTIVITIES | |||||||||||
| Repurchase of common shares | - | (65) | (67) | (97) | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (283) | (177) | (550) | (1,628) | |||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (494) | 2,807 | (7,351) | (3,782) | |||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 8,813 | 12,863 | 15,670 | 19,452 | |||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 8,319 | $ 15,670 | $ 8,319 | $ 15,670 | |||||||
| CASH AND CASH EQUIVALENTS: | |||||||||||
| Cash | $ 2,783 | $ 3,795 | $ 2,783 | $ 3,795 | |||||||
| Cash equivalents | 5,536 | 11,875 | 5,536 | 11,875 | |||||||
| $ 8,319 | $ 15,670 | $ 8,319 | $ 15,670 | ||||||||
| |
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SOURCE Belzberg Technologies Inc.
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