Belzberg Reports First Quarter 2009 Financial Results



    TORONTO, May 11 /CNW/ - Belzberg Technologies Inc. (TSX -BLZ), a provider
of technology-based equity and options trading services, announced today that
in the first quarter ended March 31, 2009, the net loss was $1.8 million
(including restructuring charges of $0.8 million and a net income tax recovery
of $0.9 million) as compared to net earnings of $1.1 million same quarter last
year.
    "The negative trends we saw in the fourth quarter of 2008 have continued
into the first quarter of 2009, creating this disappointing result. Revenues
in our execution business (net of pass-throughs) declined as a result of lower
volumes and pricing pressure," said Judith Robertson, President and CEO.
"However, the changes we have made in strategy and organization in the first
quarter have already resulted in improvements to our operating ability."

    
    Major activities in the first quarter include:

        -  Eliminated approximately $1.9 million in annual costs through
           headcount and cost reductions.
        -  Reorganized client support and technology teams to provide better
           service and improve reliability.
        -  Added 11 net new clients over all business segments.
        -  Added first clearing client at the end of March.
    

    "The market conditions continue to be challenging for Belzberg and its
clients," said Judith Robertson, President and CEO. "We have been heartened by
our ability to add new clients in both Canada and the US across equities and
options and are excited by the ability to provide expanded services through
the addition of our clearing business. These initiatives along with the
improvements in the delivery and service of our technology platform are the
highest focus of our new management team. We are on track and continue to
expect improved results in the second half of 2009."
    Total revenues for the first quarter, including pass-throughs on which
the Company makes no margin, increased 18% to $11.3 million versus $9.6
million in the same year-ago period. Revenues net of pass-throughs decreased
by 11% to $6.6 million from $7.5 million in the same year-ago period. A
strengthening US dollar positively impacted revenues before pass-throughs by
approximately $1.0 million.
    Diluted loss per share for the first quarter was $(0.12) per share as
compared to earnings of $0.07 per share in the same year-ago period.

    
    -------------------------------------------------------------------------
    Financial Highlights                                Three months ended
    (in millions of dollars, except per share data)          March 31,
    (unaudited)                                         2009           2008
    -------------------------------------------------------------------------
    Revenue                                       $      11.3    $       9.6
    Revenue before pass-throughs                  $       6.6    $       7.5
    Net earnings (loss)                           $      (1.8)(*)$       1.1
    Diluted earnings (loss) per share             $     (0.12)   $      0.07
    -------------------------------------------------------------------------
    (*) Includes restructuring charges of $0.8 million
    

    Business Line Revenues

    Total equity and clearing revenues before pass-throughs were $2.6 million
in the first quarter of 2009 compared to $2.9 million in the same year-ago
quarter. A strengthening US dollar positively impacted equity and clearing
revenues by approximately $0.5 million.
    Total revenue of option contracts before pass-throughs traded both
electronically and non-electronically was $2.6 million in the first quarter of
2009 compared to $2.7 million in the same year-ago quarter. A strengthening US
dollar positively impacted option revenues by approximately $0.5 million.
    Total subscription based revenue was $1.4 million in the first quarter of
2009 compared to $1.9 million in the same year-ago quarter.
    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 224,000 contracts per day in the first
quarter of 2009 as compared to 262,000 contracts per day in the same year-ago
quarter.

    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 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 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)
    -------------------------------------------------------------------------
                                                     March 31,   December 31,
                                                         2009           2008
                                                  (Unaudited)      (Audited)
                                                  -----------    -----------
    ASSETS

    CURRENT
      Cash and cash equivalents                   $     7,567    $    19,452
      Cash and cash equivalents segregated
       under regulations and other                      6,433            184
      Cash and cash equivalents on deposit with
       clearing and depository organizations            5,038          1,989
      Receivable from brokers, dealers and
       clearing organizations                          10,596          1,774
      Accounts receivable                               8,505          5,973
      Prepaid expenses and other receivables              534            534
      Other assets                                      1,172          1,565
      Income taxes receivable                             104             89
      Investment tax credits recoverable                    -             84
    -------------------------------------------------------------------------
                                                       39,949         31,644

    CAPITAL ASSETS                                      3,230          3,326

    INVESTMENT                                             30             38

    INVESTMENT TAX CREDITS RECOVERABLE                  1,587          1,580

    FUTURE INCOME TAX ASSETS                            4,520          3,289

    GOODWILL                                            1,608          1,608

    OTHER INTANGIBLE ASSETS, NET                          425            473
    -------------------------------------------------------------------------
                                                  $    51,349    $    41,958
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Clearing facility loan                      $     4,099    $         -
      Accounts payable and accrued liabilities          6,987          6,350
      Payable to customers and correspondents           5,781            183
      Restructuring accrual                               742              -
      Payable to brokers, dealers and
       clearing organizations                               -            131
    -------------------------------------------------------------------------
                                                       17,609          6,664

    FUTURE INCOME TAX LIABILITIES                         461            244
    -------------------------------------------------------------------------
                                                       18,070          6,908
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    CAPITAL STOCK                                      23,920         23,930

    CONTRIBUTED SURPLUS                                 3,749          3,686

    RETAINED EARNINGS                                   5,610          7,434
    -------------------------------------------------------------------------
                                                       33,279         35,050
    -------------------------------------------------------------------------
                                                  $    51,349    $    41,958
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Operations and Retained Earnings (Deficit)
    For the three months ended March 31, 2009 and March 31, 2008
    (in thousands of Canadian dollars except per share amounts)
    (Unaudited)
    -------------------------------------------------------------------------
                                                         2009           2008
                                                  -----------    -----------

    REVENUE
      Transaction fees:
        Equity order flow and clearing            $     6,290    $     3,779
        Options and futures contracts                   3,189          3,616
    -------------------------------------------------------------------------
                                                        9,479          7,395

      Subscription fees                                 1,395          1,853

      Other revenue                                       412            342
    -------------------------------------------------------------------------
    TOTAL REVENUE                                      11,286          9,590
    -------------------------------------------------------------------------

    EXPENSES
      Exchange, clearing and brokerage fees             5,544          2,320
      Compensation and related benefits                 3,755          2,780
      Telecommunication and datafeed services           2,050          1,554
      Administrative and other expenses                 1,190          1,093
      Restructuring expenses                              839              -
      Amortization of capital assets                      523            463
      Amortization of intangible assets                    55             38
      Foreign exchange loss                               168             59
    -------------------------------------------------------------------------
                                                       14,124          8,307
    -------------------------------------------------------------------------

    EARNINGS (LOSS) BEFORE THE UNDERNOTED              (2,838)         1,283

      Interest expense                                      6              -
      Interest income                                     (87)          (187)
    -------------------------------------------------------------------------
                                                          (81)          (187)
    -------------------------------------------------------------------------

    EARNINGS (LOSS) BEFORE INCOME TAXES                (2,757)         1,470

    PROVISION FOR (RECOVERY OF) INCOME TAXES
      Current                                               -              7
      Future                                             (933)           345
    -------------------------------------------------------------------------
                                                         (933)           352
    -------------------------------------------------------------------------

    NET EARNINGS (LOSS)                                (1,824)         1,118

    RETAINED EARNINGS (DEFICIT), BEGINNING OF
     PERIOD                                             7,434         (8,684)
    -------------------------------------------------------------------------
    RETAINED EARNINGS (DEFICIT), END OF PERIOD    $     5,610    $    (7,566)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EARNINGS (LOSS) PER SHARE:
      Basic                                       $    (0.12)    $      0.08
      Diluted                                     $    (0.12)    $      0.07
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WEIGHTED AVERAGE NUMBER OF COMMON
     SHARES OUTSTANDING (in thousands)
      Basic                                           14,835          14,791
      Diluted                                         14,835          14,935
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Cash Flows
    For the three months ended March 31, 2009 and March 31, 2008
    (in thousands of Canadian dollars)
    (Unaudited)
    -------------------------------------------------------------------------
                                                         2009           2008
                                                  -----------    -----------
    CASH PROVIDED BY (USED FOR)

    OPERATING ACTIVITIES
      Net earnings (loss)                         $    (1,824)   $     1,118
      Items not affecting cash
        Amortization of capital assets                    523            463
        Amortization of intangible assets                  55             38
        Unrealized foreign exchange gain                  (18)          (275)
        Gain on sale of investment                         (5)             -
        Stock-based compensation                           63             39
        Future income taxes                            (1,014)           312
      Changes in non-cash working capital items        (9,252)         1,589
    -------------------------------------------------------------------------
                                                      (11,472)         3,284
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of capital assets                         (427)        (1,024)
      Purchase of intangibles                              (7)           (41)
      Purchase of investment                               (2)             -
      Proceeds from sale of investment                     15              -
    -------------------------------------------------------------------------
                                                         (421)        (1,065)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Repayment of obligations under capital lease          -            (27)
      Repurchase of common shares                         (10)          (236)
      Proceeds from the exercise of stock options           -            350
    -------------------------------------------------------------------------
                                                          (10)            87
    -------------------------------------------------------------------------

    Effect of exchange rate changes on cash
     and cash equivalents                                  18            275

    NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                             (11,885)         2,581

    CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                               19,452         21,081
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS,
     END OF PERIOD                                $     7,567    $    23,662
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CASH EQUIVALENTS:
      Cash                                        $     1,016    $     5,048
      Cash equivalents                                  6,551         18,614
    -------------------------------------------------------------------------
                                                  $     7,567    $    23,662
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL CASH FLOW INFORMATION
      Interest received                           $        90    $       181
      Interest paid                                         6              -
      Income taxes paid                                    15             13
    





For further information:

For further information: Judith Robertson, Chief Executive Officer,
Phone: (416) 360-1812, E-mail: investorinfo@belzberg.com

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BELZBERG TECHNOLOGIES INC.

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