TORONTO, Aug. 7 /PRNewswire-FirstCall/ -- Belzberg Technologies Inc. (TSX -BLZ), a provider of technology-based equity and options trading services, announced today that in the second quarter ended June 30, 2008, the net loss was $0.4 million as compared to earnings of $1.7 million same quarter last year.
Total revenues for the second quarter decreased 19% to $9.0 million versus $11.1 million in the same year-ago period. Diluted loss per share for the second quarter was ($0.03) per share as compared to earnings of $0.11 per share in the same year-ago period.
------------------------------------------------------------------------- Financial Highlights (in millions of dollars, Three months ended Six months ended except per share data) June 30, June 30, (unaudited) 2008 2007 2008 2007 ------------------------------------------------------------------------- Revenue $ 9.0 $ 11.1 $ 18.6 $ 22.0 Net earnings (loss) $ (0.4) $ 1.7 $ 0.7 $ 3.4 Diluted earnings (loss) per share $ (0.03) $ 0.11 $ 0.05 $ 0.22 ------------------------------------------------------------------------- -------------------------------------------------------------------------
The Company's financial position at June 30, 2008 included cash and cash equivalents of $22.6 million and working capital of $28.9 million.
"Results in the second quarter were impacted by higher costs that have been incurred in anticipation of the company initiating its clearing business," said Sid Belzberg, CEO of Belzberg. "It is currently expected that we will have all the necessary approvals in place to commence clearing operations in the near future. We have also made good progress in building a pipeline of new clearing and execution customers."
Revenue
Total revenue from option contracts traded both electronically and non-electronically was $3.7 million in the second quarter of 2008 compared to $4.8 million in the same year-ago quarter. Options revenue in the second quarter decreased by approximately $0.3 million from a strengthening Canadian dollar.
Average total daily volume of electronic equity and index options contracts traded both electronically and non-electronically on the floor of the CBOE and on other exchanges were 266,000 contracts per day in the second quarter of 2008 compared to 287,000 contracts per day in the same year-ago quarter.
Total revenue from U.S. equity order flow was $2.6 million in the second quarter of 2008 compared to $3.5 million in the same year-ago quarter. A strengthening Canadian dollar impacted U.S. equity revenue by approximately $0.2 million.
About Belzberg Technologies
Belzberg Technologies Inc. is a provider of technology-based brokerage services, trading equities and options through Electronic Brokerage Systems, Belzberg Technologies' wholly owned agency-only broker-dealer. Electronic Brokerage Systems is a member of most North American stock exchanges, options exchanges and clearing organizations, including the NYSE, NASDAQ, CBOE, NSCC and OCC. Using Belzberg's suite of integrated trading tools and network connectivity, Belzberg's customers have direct access to all North American equities and options markets. The firm's client-base includes over 200 leading U.S and international brokerage houses and financial institutions. Belzberg Technologies is listed on the Toronto Stock Exchange (Ticker-BLZ) - additional information is available at http://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.
Notice The consolidated financial statements have not been reviewed by an external auditor BELZBERG TECHNOLOGIES INC. Consolidated Balance Sheets (in thousands of Canadian dollars) ------------------------------------------------------------------------- June 30, December 31, 2008 2007 (Unaudited) (Audited) ------------- ------------- ASSETS CURRENT Cash and cash equivalents $ 22,627 $ 21,081 Cash and cash equivalents on deposit with clearing and depository organizations 1,687 2,971 Receivable from brokers, dealers and clearing organizations 481 2,521 Accounts receivable 4,721 4,601 Prepaid expenses and other receivables 577 380 Other assets 597 925 Investment tax credits recoverable 529 489 Future income tax assets 1,808 2,201 ------------------------------------------------------------------------- 33,027 35,169 CAPITAL ASSETS 3,428 2,955 INVESTMENT 38 38 INVESTMENT TAX CREDITS RECOVERABLE 1,049 972 FUTURE INCOME TAX ASSETS 458 290 GOODWILL 1,608 1,608 OTHER INTANGIBLE ASSETS, NET 208 240 ------------------------------------------------------------------------- $ 39,816 $ 41,272 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES CURRENT Accounts payable and accrued liabilities $ 3,778 $ 4,053 Payable to brokers, dealers and clearing organizations - 1,915 Income taxes payable 7 13 Future income tax liabilities 345 439 Obligations under capital lease - 27 ------------------------------------------------------------------------- 4,130 6,447 FUTURE INCOME TAX LIABILITIES 236 233 ------------------------------------------------------------------------- 4,366 6,680 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY CAPITAL STOCK 23,945 39,599 CONTRIBUTED SURPLUS 3,499 3,677 RETAINED EARNINGS (DEFICIT) 8,006 (8,684) ------------------------------------------------------------------------- 35,450 34,592 ------------------------------------------------------------------------- $ 39,816 $ 41,272 ------------------------------------------------------------------------- ------------------------------------------------------------------------- BELZBERG TECHNOLOGIES INC. Consolidated Statements of Operations and Retained Earnings (Deficit) (in thousands of Canadian dollars) (Unaudited) ------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- REVENUE Transaction fees: Equity order flow $ 3,157 $ 4,142 $ 6,936 $ 8,351 Options and futures contracts 3,672 4,778 7,288 9,227 ------------------------------------------------------------------------- 6,829 8,920 14,224 17,578 Subscription fees 1,787 1,864 3,640 3,749 Other revenue 358 322 700 677 ------------------------------------------------------------------------- TOTAL REVENUE 8,974 11,106 18,564 22,004 ------------------------------------------------------------------------- EXPENSES Exchange, clearing and brokerage fees 3,136 3,504 5,456 6,734 Compensation and related benefits 2,951 2,716 5,731 5,517 Telecommunication and datafeed services 1,662 1,554 3,216 3,079 Administrative and other expenses 1,416 1,107 2,509 2,322 Strategic process expenses - 10 - 98 Amortization of capital assets 496 347 981 677 Amortization of intangible assets 16 16 32 32 Foreign exchange loss 58 343 117 531 ------------------------------------------------------------------------- 9,735 9,597 18,042 18,990 ------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE THE UNDERNOTED (761) 1,509 522 3,014 Interest expense - 2 - 7 Interest income (149) (195) (336) (376) ------------------------------------------------------------------------- (149) (193) (336) (369) ------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INCOME TAXES (612) 1,702 858 3,383 PROVISION FOR (RECOVERY OF) INCOME TAXES Current - - 7 - Future (184) - 161 - ------------------------------------------------------------------------- (184) - 168 - ------------------------------------------------------------------------- NET EARNINGS (LOSS) (428) 1,702 690 3,383 DEFICIT, BEGINNING OF PERIOD (7,659) (14,266) (8,684) (15,947) REPURCHASE OF COMMON SHARES 93 - - - REDUCTION OF STATED CAPITAL 16,000 - 16,000 - ------------------------------------------------------------------------- RETAINED EARNINGS (DEFICIT), END OF PERIOD 8,006 (12,564) 8,006 (12,564) ------------------------------------------------------------------------- ------------------------------------------------------------------------- EARNINGS (LOSS) PER SHARE: Basic $ (0.03) $ 0.12 $ 0.05 $ 0.23 Diluted $ (0.03) $ 0.11 $ 0.05 $ 0.22 ------------------------------------------------------------------------- ------------------------------------------------------------------------- WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING Basic 14,846 14,665 14,819 14,650 Diluted 14,938 15,208 14,936 15,245 ------------------------------------------------------------------------- ------------------------------------------------------------------------- BELZBERG TECHNOLOGIES INC. Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (Unaudited) ------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES Net earnings (loss) $ (428) $ 1,702 $ 690 $ 3,383 Items not affecting cash Amortization of capital assets 496 347 981 677 Amortization of intangible assets 16 16 32 32 Unrealized foreign exchange loss 49 620 (195) 695 Stock-based compensation 39 43 78 86 Future income taxes (178) 125 134 140 Changes in non-cash working capital items (568) (1,158) 1,021 (1,644) ------------------------------------------------------------------------- (574) 1,695 2,741 3,369 ------------------------------------------------------------------------- INVESTING ACTIVITIES Purchase of capital assets (389) (756) (1,454) (1,121) ------------------------------------------------------------------------- (389) (756) (1,454) (1,121) ------------------------------------------------------------------------- FINANCING ACTIVITIES Repayment of obligations under capital lease - (35) (27) (65) Repurchase of common shares (37) - (273) - Proceeds from the exercise of stock options 14 40 364 202 ------------------------------------------------------------------------- (23) 5 64 137 ------------------------------------------------------------------------- Effect of exchange rate changes on cash and cash equivalents (49) (620) 195 (695) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,035) 324 1,546 1,690 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 23,662 17,802 21,081 16,436 ------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 22,627 $ 18,126 $ 22,627 $ 18,126 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS: Cash $ 4,983 $ 4,824 $ 4,983 $ 4,824 Cash equivalents 17,644 13,302 17,644 13,302 ------------------------------------------------------------------------- $ 22,627 $ 18,126 $ 22,627 $ 18,126 ------------------------------------------------------------------------- ------------------------------------------------------------------------- SUPPLEMENTAL CASH FLOW INFORMATION Interest received $ 164 $ 164 $ 345 $ 346 Interest paid - 2 - 7 Income taxes paid 77 - 130 -
