Burntsand Releases Second Quarter 2009 Results and Announces New Chairman and New Board Member
TORONTO, ON, Aug. 6, 2009 /CNW/ - Burntsand Inc. (Burntsand) (TSX:BRT) a
North American business consulting and technology services company today
reported revenue and earnings results for its second quarter ended June 30,
2009.
Second Quarter 2009 Financial Results Highlights (000's) - unaudited
Three months ended June 30, Six months ended June 30,
2009 2008 2009 2008
-------------- ------------ ------------ ------------
Service revenue $ 5,337 $ 5,127 $ 11,291 $ 10,159
Adjusted EBITDA
(loss)(1) 30 (156) 26 (197)
Net loss (72) (265) (253) (452)
As at
30-Jun-09 31-Dec-08
------------ ------------
Cash and cash
equivalents $ 4,735 $ 4,876
Working capital 6,225 6,359
Results for the Second Quarter ended June 30, 2009
Service revenues for the second quarter of 2009 were $5.3 million
compared to $5.1 million for the second quarter of 2008. US operations
contributed $3.7 million of service revenue for the quarter, the same as the
$3.7 million for the second quarter of 2008. Gross profit on services revenue
was 30.0% for the second quarter of 2009 compared to 30.6% for the second
quarter of 2008.
Adjusted EBITDA(1) for the second quarter of 2009 was $30,321 compared to
an Adjusted EBITDA (loss) of ($156,090) for the second quarter of 2008. Net
loss for the second quarter of 2009 was ($72,186) or ($0.00) per share
compared to a net loss of ($265,034) or ($0.00) per share for the second
quarter of 2008.
Backlog as at June 30, 2009 was $5.4 million compared to $7.1 million as
at June 30, 2008.
Results for the Six Month Period ended June 30, 2009
Service revenues for the six month period ended June 30, 2009 were $11.3
million, up $1.1 million or 11% compared to $10.2 million for the same period
in 2008. US operations contributed $8.1 million of service revenue for the six
month period ended June 30, 2009 compared to $7.0 million for the same period
in 2008. Gross profit on services revenue was 28.2% for the six month period
ended June 30, 2009 compared to 29.4% for the same period in 2008.
Adjusted EBITDA for the six month period ended June 30, 2009 was $26,233
compared to an Adjusted EBITDA (loss) of ($197,079) for the same period in
2008. Net loss for the first six months of 2009 was ($253,395) or ($0.00) per
share compared to a net loss of ($451,631) or ($0.01) per share for the first
six months of 2008. The net loss for the first six months of 2009 included a
non-recurring realized currency translation loss of $53,550.
Financial Position at June 30, 2009
As at June 30, 2009 the Company held cash and short-term investments of
$4.7 million and working capital of $6.2 million. This compared to $3.0
million of cash and short-term investments and working capital of $4.6 million
as at June 30, 2008. The Company has not borrowed under its US $2.5 million
line of credit.
"While our cash, working capital and balance sheet remain strong we are
intensely focused on sales and marketing activities to begin to create growth"
said Martin Glover, Burntsand's President and Chief Executive Officer. "We
continue to focus on delivering cost effective solutions in our Collaboration,
Enterprise Content Management and Service Management practices in order to
enhance our competitive position." added Mr. Glover.
The Company has filed its financial statements and management's
discussion and analysis on SEDAR at www.sedar.com. This information includes
various metrics and performance measurements used by the company, including
utilization, project data, new customers and new contract information.
New Board Member and New Chairman
The Company announced today the appointment of Mr. Terry Holland, FCA as
Chairman of the Board of Directors of Burntsand. Mr. Holland has served as a
director of the Company since 1997 and has extensive experience as a board
member of numerous other public and private companies. Mr. Holland replaces
Mr. Jim Yeates as Chairman. Mr. Yeates will continue to serve as a Board
member of the Company.
The Company also announced today the appointment of Mr. Jim Meekison as a
director of the Company. Mr. Meekison, is the Chairman and Chief Executive
Officer of Trimin Capital Corp., a private equity company. Mr. Meekison is
currently a board member of GMP Capital Inc., Sonor Investments Limited; and
Retrocom Mid-Market Real Estate Investment Trust and a number of charitable
foundations.
"I look forward to serving as Chairman of the Board of Directors of
Burntsand as we continue to focus on improving profitability, revenue growth
and increasing shareholder value," said Mr. Holland. "I would also, on behalf
of Burntsand's board, management and staff, like to thank Mr. Jim Yeates for
serving as Burntsand's Chairman and to recognize his substantial contribution
to the Company since its inception. Jim is a founder and the original CEO of
Burntsand and in more recent years has provided strong leadership as its
Chairman."
As always we invite your comments and encourage you to follow the
progress of your company on the Burntsand website at www.burntsand.com.
About Burntsand
Burntsand is a leader in the delivery of technology consulting services
for customers with complex information processing and information management
requirements in three practice areas - Enterprise Content Management,
Collaboration and Service Management - aligned around our strategic partners,
EMC, Microsoft and BMC. The Company delivers strategic design, technology
architecture and custom application development through our proven
Time-to-Value methodology, which mitigates business risk and speeds process
improvements and returns. Headquartered in Toronto, Burntsand operates from
locations across North America. The Company's shares (TSX: BRT) are traded on
the Toronto Stock Exchange. Learn more about Burntsand at www.burntsand.com.
Forward Looking Statements
Certain information in this press release and in other public
announcements contains forward-looking information. Such statements include,
but are not limited to, statements which indicate the results, events or
activities that Burntsand expects or anticipates will or may occur in the
future, including statements which give guidance as to future revenues or
other financial results of Burntsand and statements regarding the growth of
business or operations, competitive strengths and strategic initiatives and
plans. Such forward-looking statements can generally be identified by words
such as "outlook", "guidance", "estimate", "forecast", "objective",
"anticipate", "intend", "likely", "will", "may", "should", "could", "expect",
"believe", and similar expressions and statements relating to matters that are
not historical facts.
The forward-looking statements in these documents are based upon the
reasonable beliefs of Burntsand and its management as of the date the
information; however, forward-looking statements involve risks and
uncertainties and are based upon factors that may change and assumptions that
may prove, with the passage of time, to be incorrect. Accordingly, undue
reliance should not be placed upon such statements. If factors materially
change or assumptions are materially incorrect, the actual results,
performance or achievements of Burntsand may be materially different from any
future results, performances or achievements expressed or implied by such
forward-looking statements.
Important factors that could cause actual results, events or activities
to differ materially from the forward-looking statements contained in this
press release include: general economic business conditions; loss of key
employees; integration of acquisitions; stock market volatility; supply and
demand for services offered by Burntsand; changes in laws and regulations;
Burntsand's ability to compete successfully, protect its intellectual property
rights, and adapt to technological advances and changing industry standards
and other factors. Important assumptions that were used in making the
forward-looking statements include: effective daily rates, estimated
utilization, estimated new bookings and realization on contracts.
All statements made in these documents that contain forward-looking
information are made as of the date of this document. Burntsand disclaims any
intention and undertakes no obligation to update or revise any forward-looking
statements to reflect new information, future events or otherwise.
Note
(1) Adjusted EBITDA
-------------------
Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation, amortization, stock-based compensation expense as well as
any realized foreign currency translation losses or gains. Burntsand uses
Adjusted EBITDA, amongst other measures, to assess the operating
performance of its on-going businesses. The term Adjusted EBITDA does not
have a standardized meaning prescribed by Canadian generally accepted
accounting principles and therefore may not be comparable to similarly
titled measures presented by other companies. Adjusted EBITDA should not
be construed as the equivalent of net cash flows from operating
activities. The following is a reconciliation of net income (loss) to
Adjusted EBITDA for the periods indicated:
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2009 2008 2009 2008
-------------- ------------ ------------ ------------
Net loss for the
period $ (72,186) $ (265,034) $ (253,395) $ (451,631)
Amortization of
capital assets
and intangibles 66,392 84,293 141,573 170,543
Interest and
investment income (5,761) (13,777) (15,666) (40,569)
Interest expense and
financing costs 9,310 10,555 40,293 17,956
Income tax expense - - - 25,197
--------------------------- -------------------------
Standardized EBITDA (2,245) (183,963) (87,195) (278,504)
Realized currency
translation loss - - 53,550 -
Stock-based
compensation 32,566 27,873 59,878 81,425
--------------------------- -------------------------
Adjusted EBITDA
(loss) $ 30,321 $ (156,090) $ 26,233 $ (197,079)
--------------------------- -------------------------
--------------------------- -------------------------
BURNTSAND INC.
Consolidated Balance Sheets
-------------------------------------------------------------------------
June 30, December 31,
2009 2008
------------ ------------
(unaudited)
ASSETS
CURRENT
Cash and cash equivalents $ 4,734,556 $ 4,876,377
Accounts receivable 3,362,825 5,216,377
Prepaid expenses 256,524 241,252
-------------------------------------------------------------------------
8,353,905 10,334,006
Capital assets 601,505 815,441
Goodwill 169,548 177,566
-------------------------------------------------------------------------
$ 9,124,958 $11,327,013
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 1,810,448 $ 2,828,319
Deferred revenue 257,209 1,046,277
Current portion of obligations under
capital leases 60,959 100,089
-------------------------------------------------------------------------
2,128,616 3,974,685
Long-term portion of obligations under
capital leases - 4,926
-------------------------------------------------------------------------
2,128,616 3,979,611
-------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common shares 9,611,454 9,611,454
Contributed surplus 1,384,895 1,325,017
Deficit (2,492,456) (2,239,061)
Accumulated other comprehensive loss (1,507,551) (1,350,008)
-------------------------------------------------------------------------
(4,000,007) (3,589,069)
-------------------------------------------------------------------------
6,996,342 7,347,402
-------------------------------------------------------------------------
$ 9,124,958 $11,327,013
-------------------------------------------------------------------------
-------------------------------------------------------------------------
BURNTSAND INC.
Consolidated Statements of Operations
-------------------------------------------------------------------------
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2009 2008 2009 2008
-------------- ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
REVENUE
Services $ 5,336,596 $ 5,126,548 $11,290,804 $10,159,478
License and
maintenance - 457,625 101,354 586,936
Other revenue 205,441 245,970 436,102 422,550
----------------------------------------------- -------------------------
5,542,037 5,830,143 11,828,260 11,168,964
----------------------------------------------- -------------------------
COSTS
Cost of services 3,734,480 3,557,279 8,107,878 7,176,881
Cost of license and
maintenance - 435,720 79,703 552,474
Cost of other
revenue 189,815 230,344 404,850 390,191
----------------------------------------------- -------------------------
3,924,295 4,223,343 8,592,431 8,119,546
----------------------------------------------- -------------------------
GROSS PROFIT 1,617,742 1,606,800 3,235,829 3,049,418
----------------------------------------------- -------------------------
EXPENSES
Sales and marketing 593,905 578,353 1,114,620 969,978
General and
administrative 612,363 613,068 1,223,676 1,250,088
Other expenses 413,719 599,342 931,178 1,107,856
----------------------------------------------- -------------------------
1,619,987 1,790,763 3,269,474 3,327,922
----------------------------------------------- -------------------------
Loss before the
undernoted (2,245) (183,963) (33,645) (278,504)
Realized currency
translation loss - - (53,550) -
Amortization of
capital assets (66,392) (84,293) (141,573) (170,543)
Interest and
investment income 5,761 13,777 15,666 40,569
Interest expense and
financing costs (9,310) (10,555) (40,293) (17,956)
----------------------------------------------- -------------------------
Income loss before
income taxes (72,186) (265,034) (253,395) (426,434)
Income tax expense - - - (25,197)
----------------------------------------------- -------------------------
NET LOSS FOR
THE PERIOD $ (72,186) $ (265,034) $ (253,395) $ (451,631)
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------
Loss, basic and
diluted, per share $ (0.00) $ (0.00) $ (0.00) $ (0.01)
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------
Weighted average
number of common
shares used to
calculate per share
amounts, basic and
diluted 72,660,220 72,612,601 72,660,220 72,603,078
----------------------------------------------- -------------------------
BURNTSAND INC.
Consolidated Statements of Cash Flows
-------------------------------------------------------------------------
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2009 2008 2009 2008
-------------- ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
CASH FLOWS FROM
OPERATING
ACTIVITIES
Net loss for the
period $ (72,186) $ (265,034) $ (253,395) $ (451,631)
Items not affecting
cash:
Amortization of
capital assets
and intangibles 66,392 84,293 141,573 170,543
Amortization of
assets used in
outsourcing
contract 44,260 44,260 88,520 88,520
Realized currency
translation loss - - 53,550 -
Stock-based
compensation 32,566 27,873 59,878 81,425
------------------------------------------- -------------------------
71,032 (108,608) 90,126 (111,143)
Changes in operating
assets and
liabilities:
Accounts receivable 206,494 (45,640) 1,748,304 (73,617)
Prepaid expenses (29,069) 293,016 (22,413) (69,156)
Accounts payable and
accrued liabilities (55,005) (182,619) (974,830) (224,348)
Deferred revenue (249,263) (274,210) (792,336) (101,857)
----------------------------------------------- -------------------------
(55,811) (318,061) 48,851 (580,121)
----------------------------------------------- -------------------------
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of capital
assets, net of
related accounts
payable (1,419) (49,764) (2,774) (105,100)
----------------------------------------------- -------------------------
(1,419) (49,764) (2,774) (105,100)
----------------------------------------------- -------------------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Payments on capital
lease obligations (33,963) (30,810) (68,446) (62,679)
Issue of common shares - 5,000 - 5,000
----------------------------------------------- -------------------------
(33,963) (25,810) (68,446) (57,679)
----------------------------------------------- -------------------------
NET CASH OUTFLOW (91,193) (393,635) (22,369) (742,900)
EFFECT OF FOREIGN
EXCHANGE RATE
CHANGES ON CASH (187,713) (16,003) (119,452) 94,303
CASH (EXCLUDING SHORT
TERM INVESTMENTS),
BEGINNING OF PERIOD 5,013,462 3,404,973 4,876,377 3,643,932
----------------------------------------------- -------------------------
CASH (EXCLUDING SHORT
TERM INVESTMENTS),
END OF PERIOD $ 4,734,556 $ 2,995,335 $ 4,734,556 $ 2,995,335
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------
%SEDAR: 00007529E
For further information: Martin Glover, President & CEO, Voice: (617)
923-6611, Email: MGlover@burntsand.com; Stephen W. Massel, CFO, Voice: (416)
234-3852, Email: SMassel@burntsand.com
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