Belzberg Reports Fourth Quarter and Annual 2006 Financial Results



    TORONTO, March 12 /CNW/ - Belzberg Technologies Inc. (TSX -BLZ), a
provider of technology-based equity and options trading services, announced
today that in the fourth quarter ended December 31, 2006, net earnings
increased to $3.9 million (including a net income tax recovery of
$1.5 million) from $1.7 million same quarter last year.
    Total revenues for the fourth quarter increased 13% to $10.2 million
versus $9.0 million in the same year-ago period. Diluted earnings per share
for the fourth quarter rose to $0.25 per share from $0.12 per share in the
same year-ago period.

    
    -------------------------------------------------------------------------
    Financial Highlights
    (in millions of
     dollars, except
     per share data)         Three months ended          Twelve months ended
    (Three month                 December 31,                December 31,
     period unaudited)        2006          2005          2006          2005
    -------------------------------------------------------------------------
    Revenue           $       10.2  $        9.0  $       37.4  $       33.0
    Net earnings      $        3.9  $        1.7  $        9.2  $        4.1
    Diluted earnings
     per share        $       0.25  $       0.12  $       0.61  $       0.30
    -------------------------------------------------------------------------
    

    The Company strengthened its financial position with cash and cash
equivalents of $16.4 million and working capital of $22.2 million at
December 31, 2006, up from cash and cash equivalents of $7.1 million and
working capital of $10.5 million at December 31, 2005.
    Commenting on the results, Belzberg CEO Sid Belzberg said, "2006 was a
record year for Belzberg with revenues up 13% from the prior year and net
earnings excluding net income tax recoveries up 85% from the prior year, as a
result of a growing demand for the Company's products and services. We
continue to execute successfully on our strategy of using the floor-based
execution groups to sell technology-based brokerage services to our
institutional customers."
    Average daily volume of equity order flow executed by Belzberg
Technologies wholly owned U.S. broker-dealer subsidiary increased by 32% to
41.7 million shares per day in the fourth quarter of 2006 compared to
31.5 million shares per day in the same year-ago quarter.
    Average total daily volume of electronic equity and index options
contracts traded both non electronically and electronically on the floor of
the CBOE and on other exchanges were 231,000 contracts per day in the fourth
quarter of 2006 compared to 261,000 contracts per day in the same year-ago
quarter.
    The Company continues its strategic process and is in discussions with a
number of parties. However, no assurances can be made that these discussions
will result in strategic opportunities for the Company.

    Patent Information

    In January 1999, Belzberg received a U.S. Patent Number 5,864,827,
recognizing its exclusive rights to intellectual property for a System and
Method for Providing a Protocol Transaction Gateway. In August 2004, Belzberg
was granted European Patent Number 0992014 for a System and Method for
Providing an Information Gateway.
    The patents protect Belzberg's Transactions Gateway, a system that
translates the protocol of incoming transaction messages from customers into
the appropriate protocol used by various exchanges and market makers. The
technology facilitates electronic stock trading by allowing customers to
execute trades on any market they choose from a single screen.

    About Belzberg Technologies

    Belzberg Technologies Inc. is a provider of technology-based brokerage
services, trading equities and options through Electronic Brokerage Systems
(EBS), Belzberg Technologies' wholly owned agency-only broker-dealer. EBS 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.


    
    BELZBERG TECHNOLOGIES INC.
    Consolidated Balance Sheets
    (in Canadian dollars)
    -------------------------------------------------------------------------
                                                   December 31,  December 31,
                                                          2006          2005
                                                      (Audited)     (Audited)
                                                  ------------- -------------
    ASSETS

    CURRENT
      Cash and cash equivalents                   $ 16,435,704  $  7,052,641
      Deposits with and receivables from brokers,
       dealers and clearing organizations            2,741,562     2,232,350
      Accounts receivable                            4,704,665     3,470,577
      Prepaid expenses and other receivables           406,349       335,863
      Other current assets                             176,034       277,317
      Investment tax credits recoverable               597,835       160,215
      Future income tax asset                        1,795,754             -
    -------------------------------------------------------------------------
                                                    26,857,903    13,528,963

    Capital assets                                   2,296,813     2,254,346

    Investment                                          35,978             -

    Goodwill                                         1,608,471       755,239

    Other intangible assets, net                       303,970             -
    -------------------------------------------------------------------------
                                                  $ 31,103,135  $ 16,538,548
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities    $  4,542,478  $  2,780,646
      Current portion of obligations under
       capital lease                                   116,473       217,605
    -------------------------------------------------------------------------
                                                     4,658,951     2,998,251

    OBLIGATIONS UNDER CAPITAL LEASE                     32,059       184,809
    -------------------------------------------------------------------------
                                                     4,691,010     3,183,060
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    CAPITAL STOCK                                   38,840,032    35,088,972

    CONTRIBUTED SURPLUS                              3,518,871     3,379,968

    DEFICIT                                        (15,946,778)  (25,113,452)
    -------------------------------------------------------------------------
                                                    26,412,125    13,355,488
    -------------------------------------------------------------------------
                                                  $ 31,103,135  $ 16,538,548
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Operations and Deficit
    (in Canadian dollars)
    (Three Month Periods Unaudited)
    -------------------------------------------------------------------------

                              Three months ended         Twelve months ended
                                 December 31,                December 31,
                              2006          2005          2006          2005
                      ------------- ------------- ------------- -------------

    REVENUE
      Transaction fees:
        Equity
         order flow   $  4,514,399  $  3,993,417  $ 15,690,345  $ 14,516,794
        Electronic
         option and
         futures
         contracts       2,062,305     1,888,862     8,004,606     6,009,818
        Floor brokerage
         option
         contracts       1,395,088       755,905     4,849,977     2,748,301
    -------------------------------------------------------------------------
                         7,971,792     6,638,184    28,544,928    23,274,913

      Subscription fees  1,872,356     1,908,425     7,391,641     7,563,444

      Other revenue        344,489       426,307     1,429,913     2,181,376
    -------------------------------------------------------------------------
    TOTAL REVENUE       10,188,637     8,972,916    37,366,482    33,019,733
    -------------------------------------------------------------------------

    EXPENSES
      Exchange, clearing
       and brokerage
       fees              3,464,603     2,451,708    11,599,458     8,664,004
      Compensation and
       related benefits  2,654,062     2,045,138     9,002,558     8,148,186
      Telecommunication
       and datafeed
       services          1,369,512     1,464,615     5,111,297     6,485,926
      Administrative
       and other
       expenses          1,001,344       897,117     3,664,381     3,744,603
      Strategic process
       expenses             34,076             -       247,843             -
      Amortization of
       capital assets      321,637       383,238     1,304,675     1,780,508
      Amortization of
       intangible assets    15,998             -        15,998             -
      Government
       assistance         (778,327)            -      (885,336)     (160,215)
      Foreign exchange
       loss (gain)         (92,725)       79,706        25,855       248,413
    -------------------------------------------------------------------------
                         7,990,180     7,321,522    30,086,729    28,911,425
    -------------------------------------------------------------------------

    EARNINGS BEFORE
     THE UNDERNOTED      2,198,457     1,651,394     7,279,753     4,108,308

      Interest expense      19,930        12,815        38,504        53,410
      Interest income     (153,940)      (24,642)     (377,118)      (67,509)

    -------------------------------------------------------------------------

    NET EARNINGS BEFORE
     INCOME TAXES        2,332,467     1,663,221     7,618,367     4,122,407

    Provision for
     (recovery of)
     income taxes
      Current              247,447             -       247,447             -
      Future            (1,795,754)            -    (1,795,754)            -
    -------------------------------------------------------------------------
                        (1,548,307)            -    (1,548,307)            -
    -------------------------------------------------------------------------

    NET EARNINGS         3,880,774     1,663,221     9,166,674     4,122,407

    DEFICIT, BEGINNING
     OF PERIOD         (19,827,552)  (26,776,673)  (25,113,452)  (29,235,859)

    -------------------------------------------------------------------------
    DEFICIT, END
     OF PERIOD        $(15,946,778) $(25,113,452) $(15,946,778) $(25,113,452)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EARNINGS PER
     SHARE:
      Basic           $       0.27  $       0.12  $       0.65  $       0.30
      Diluted         $       0.25  $       0.12  $       0.61  $       0.30
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WEIGHTED AVERAGE
     NUMBER OF COMMON
     AND COMMON
     EQUIVALENT SHARES
     OUTSTANDING:
      Basic             14,596,493    13,863,974    14,211,693    13,806,389
      Diluted           15,414,167    13,949,003    15,014,138    13,825,137
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Cash Flows
    (in Canadian dollars)
    (Three Month Periods Unaudited)
    -------------------------------------------------------------------------

                              Three months ended         Twelve months ended
                                 December 31,                December 31,
                              2006          2005          2006          2005
                      ------------- ------------- ------------- -------------
    CASH PROVIDED BY
     (USED FOR)

    OPERATING
     ACTIVITIES
     Net earnings     $  3,880,774  $  1,663,221  $  9,166,674  $  4,122,407
      Items not
       affecting cash
        Amortization of
         capital assets    321,637       383,238     1,304,675     1,780,508
        Amortization of
         intangible
         assets             15,998             -        15,998             -
        Unrealized
         foreign
         exchange loss
         (gain)           (447,454)       10,207      (156,831)      207,844
        Stock-based
         compensation       73,580        63,654       271,786       182,008
        Gain on disposal
         of capital
         assets                  -             -        (3,476)            -
        Future income
         tax asset      (1,795,754)            -    (1,795,754)            -
      Changes in
       non-cash working
       capital items     2,224,201      (458,679)     (457,536)   (2,020,695)
    -------------------------------------------------------------------------
                         4,272,982     1,661,641     8,345,536     4,272,072
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of
       capital assets     (421,658)     (171,936)   (1,276,558)     (791,307)
      Acquisition of
       business and
       assets of
       Nandra Group Inc.  (397,580)            -      (397,580)            -
      Proceeds from
       disposal of
       capital assets            -             -         7,717             -
      Purchase of
       investment                -             -       (35,978)            -
    -------------------------------------------------------------------------
                          (819,238)     (171,936)   (1,702,399)     (791,307)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Repayment of
       obligations under
       capital lease       (63,253)      (54,109)     (253,882)     (558,824)
      Proceeds from the
       exercise of
       stock options       197,927        79,999     2,836,977       280,623
    -------------------------------------------------------------------------
                           134,674        25,890     2,583,095      (278,201)
    -------------------------------------------------------------------------

    Effect of exchange
     rate changes on
     cash and cash
     equivalents           447,454       (10,207)      156,831      (207,844)
    NET INCREASE IN
     CASH AND CASH
     EQUIVALENTS         4,035,872     1,505,388     9,383,063     2,994,720

    CASH AND CASH
     EQUIVALENTS,
     BEGINNING OF
     PERIOD             12,399,832     5,547,253     7,052,641     4,057,921
    -------------------------------------------------------------------------
    CASH AND CASH
     EQUIVALENTS,
     END OF PERIOD    $ 16,435,704  $  7,052,641  $ 16,435,704  $  7,052,641
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CASH AND CASH
     EQUIVALENTS:
      Cash            $  8,132,595  $  6,879,553  $  8,132,595  $  6,879,553
      Cash equivalents   8,303,109       173,088  $  8,303,109       173,088
    -------------------------------------------------------------------------
                      $ 16,435,704  $  7,052,641  $ 16,435,704  $  7,052,641
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL CASH
     FLOW INFORMATION
      Interest paid   $     19,930  $     12,815  $     38,504  $     53,410
      Interest
       received       $    143,598        19,072       357,475        61,939

    SUPPLEMENTAL
     DISCLOSURE OF
     NON-CASH FINANCING
     AND INVESTING
     ACTIVITIES

    Acquisition of
     capital assets
     with capital
     leases           $          -  $          -  $          -  $    425,358
    Acquisition of
     capital assets
     included in
     accounts payable
     and accrued
     liabilities      $    196,867  $    127,622  $    196,867  $    127,622
    Common stock
     issued for
     business
     acquisition      $          -  $          -  $    781,200  $          -
    





For further information:

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

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BELZBERG TECHNOLOGIES INC.

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