Belzberg Reports Fourth Quarter and Annual 2007 Financial Results



    TORONTO, March 6 /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, 2007, net earnings were
$2.1 million as compared to $3.9 million (including a net income tax recovery
of $1.5 million) same quarter last year.
    Total revenues for the fourth quarter decreased 12% to $9.0 million
versus $10.2 million in the same year-ago period. Approximately $1.0 million
of the revenue decline resulted from a strengthening Canadian dollar. Diluted
earnings per share for the fourth quarter were $0.14 per share as compared to
$0.25 per share in the same year-ago period.

    
    -------------------------------------------------------------------------
    Financial Highlights            Three months ended   Twelve months ended
    (in millions of dollars,           December 31,          December 31,
     except per share data)
    (Three month period unaudited)   2007       2006       2007       2006
    -------------------------------------------------------------------------
    Revenue                        $  9.0     $ 10.2     $ 40.7     $ 37.4
    Net earnings                   $  2.1     $  3.9(*)  $  7.3     $  9.2(*)
    Diluted earnings per share     $ 0.14     $ 0.25     $ 0.48     $ 0.61
    -------------------------------------------------------------------------
    (*) Includes net income tax recovery of $1.5 million
    

    The Company strengthened its financial position with cash and cash
equivalents of $21.1 million and working capital of $28.7 million at
December 31, 2007, up from cash and cash equivalents of $16.4 million and
working capital of $22.3 million at December 31, 2006.
    "Despite the dramatic rise of the Canadian Dollar, our revenue continued
to grow in 2007," said Sid Belzberg, CEO of Belzberg. "We also delivered three
new products that have set the stage for further revenue growth."
    The following were added to our main lines of business:

    Full Service Self Clearing

    A state-of-the-art clearing system was installed and has been running in
daily production subsequent to the end of 2007. This has attracted a brand new
universe of clients and source of revenue for the company.

    DeepBook(TM) for Options Traders - first in the market

    This unique options trading product, implemented in the first quarter of
2008, allows traders to automatically sweep the depth of liquidity in all
options markets, rather than being restricted to level one. We believe that
this is a significant technical innovation.

    BestX(TM) smart order routing and algorithmic trading - best in Canada

    Belzberg's BestX best market execution product, delivered in Q4 2007, is
currently the only market execution software in Canada that can cancel
existing orders in one market and send them to another market based on second
by second price ticks. BestX routing has also opened a second new source of
revenue for the company, by offering various algorithmic trading strategies
from the BestX platform.

    Patent Update

    Belzberg invented much of the technology used today by brokerages and
financial institutions for electronic trade execution. Documentation
supporting a conception date of 1993-1994 for our US Gateway Patent was
recently located in the Canadian government archives and has opened the door
for our strategic patent advisor to enter into discussions with litigation
teams capable of enforcing our intellectual property rights.

    Revenue

    Total revenue of option contracts traded both electronically and
non-electronically was $3.3 million in the fourth quarter of 2007 compared to
$3.5 million in the same year-ago quarter. Options revenue in the fourth
quarter decreased by approximately $0.4 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 231,000 contracts per day in the fourth
quarters of 2007 and 2006.
    Total revenue of U.S. equity order flow was $3.5 million in the fourth
quarter of 2007 compared to $4.5 million in the same year-ago quarter.
Approximately $0.8 million of the U.S. equity revenue decline resulted from
lower pass-through revenues on which the Company makes no mark-up. A
strengthening Canadian dollar impacted U.S. equity revenue before
pass-throughs by approximately $0.3 million.

    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,
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 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,
                                                         2007           2006
                                                     (Audited)      (Audited)
                                                 -------------  -------------
    ASSETS

    CURRENT
      Cash and cash equivalents                  $ 21,080,671   $ 16,435,704
      Cash and cash equivalents on deposit with
       clearing and depository organizations        2,970,524      2,035,713
      Receivable from brokers, dealers and
       clearing organizations                       2,520,948        705,849
      Accounts receivable                           4,600,583      4,704,665
      Prepaid expenses and other receivables          380,360        406,349
      Other asset                                     925,279        176,034
      Investment tax credits recoverable              489,384        597,835
      Future income tax assets                      2,200,878      1,967,560
    -------------------------------------------------------------------------
                                                   35,168,627     27,029,709

    Capital assets                                  2,955,401      2,296,813

    Investment                                         38,043         35,978

    Investment tax credits recoverable                971,614              -

    Future income tax assets                          290,088              -

    Goodwill                                        1,608,471      1,608,471

    Intangible asset                                  239,976        303,970
    -------------------------------------------------------------------------
                                                 $ 41,272,220   $ 31,274,941
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities   $  4,053,426   $  4,542,478
      Payable to brokers, dealers and clearing
       organizations                                1,915,496              -
      Income taxes payable                             12,817              -
      Future income tax liabilities                   438,531        110,280
      Current portion of obligations under
       capital lease                                   27,269        116,473
    -------------------------------------------------------------------------
                                                    6,447,539      4,769,231

    Future income tax liabilities                     232,939         61,526
    Obligations under capital lease                         -         32,059
    -------------------------------------------------------------------------
                                                    6,680,478      4,862,816
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    Capital stock                                  39,598,428     38,840,032

    Contributed surplus                             3,677,327      3,518,871

    Deficit                                        (8,684,013)   (15,946,778)
    -------------------------------------------------------------------------
                                                   34,591,742     26,412,125
    -------------------------------------------------------------------------
                                                 $ 41,272,220   $ 31,274,941
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Operations
    (in Canadian dollars)
    (Three Month Periods Unaudited)
    -------------------------------------------------------------------------
                             Three months ended         Twelve months ended
                                 December 31,                December 31,
                                 2007         2006         2007         2006
                          ------------ ------------ ------------ ------------
    REVENUE
      Transaction fees:
        Equity order flow $ 3,455,180  $ 4,514,399  $15,201,856  $15,690,345
        Options and
         futures
         contracts          3,294,760    3,457,393   16,644,615   12,854,583
    -------------------------------------------------------------------------
                            6,749,940    7,971,792   31,846,471   28,544,928

      Subscription fees     1,884,547    1,872,356    7,454,663    7,391,641
      Other revenue           328,374      344,489    1,352,194    1,429,913
    -------------------------------------------------------------------------
    TOTAL REVENUE           8,962,861   10,188,637   40,653,328   37,366,482
    -------------------------------------------------------------------------

    EXPENSES
      Exchange, clearing
       and brokerage fees   2,236,417    3,464,603   11,202,941   11,599,458
      Compensation and
       related benefits     2,598,465    2,654,062   10,783,155    9,002,558
      Telecommunication
       and datafeed
       services             1,459,648    1,369,512    6,069,307    5,111,297
      Administrative and
       other expenses       1,293,306    1,001,344    4,604,542    3,664,381
      Strategic process
       expenses                     -       34,076      191,089      247,843
      Amortization of
       capital assets         434,155      321,637    1,507,219    1,304,675
      Amortization of
       intangible assets       15,999       15,998       63,994       15,998
      Government assistance  (936,327)    (778,327)    (936,327)    (885,336)
      Foreign exchange
       (gain) loss            156,111      (92,725)     845,342       25,855
    -------------------------------------------------------------------------
                            7,257,774    7,990,180   34,331,262   30,086,729
    -------------------------------------------------------------------------

    EARNINGS BEFORE THE
     UNDERNOTED             1,705,087    2,198,457    6,322,066    7,279,753

      Interest expense          1,968       19,930       10,159       38,504
      Interest income        (220,518)    (153,940)    (811,149)    (377,118)
    -------------------------------------------------------------------------

    EARNINGS BEFORE
     INCOME TAXES           1,923,637    2,332,467    7,123,056    7,618,367

    PROVISION FOR
     (RECOVERY OF)
     INCOME TAXES
      Current                 123,097      247,447      123,097      247,447
      Future                 (262,806)  (1,795,754)    (262,806)  (1,795,754)
    -------------------------------------------------------------------------
                             (139,709)  (1,548,307)    (139,709)  (1,548,307)
    -------------------------------------------------------------------------
    NET EARNINGS            2,063,346    3,880,774    7,262,765    9,166,674

    DEFICIT, BEGINNING
     OF PERIOD            (10,747,359) (19,827,552) (15,946,778) (25,113,452)
    -------------------------------------------------------------------------
    DEFICIT, END OF
     PERIOD                (8,684,013) (15,946,778)  (8,684,013) (15,946,778)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EARNINGS PER SHARE:
      Basic               $      0.14  $      0.27  $      0.49  $      0.65
      Diluted             $      0.14  $      0.25  $      0.48  $      0.61
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WEIGHTED AVERAGE
     NUMBER OF COMMON AND
     COMMON EQUIVALENT
     SHARES OUTSTANDING

      Basic                14,786,028   14,596,493   14,692,620   14,211,693
      Diluted              14,963,715   15,414,167   15,122,085   15,014,138
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    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,
                                 2007         2006         2007         2006
                          ------------ ------------ ------------ ------------

    CASH PROVIDED BY
     (USED FOR)

    OPERATING
     ACTIVITIES
      Net earnings        $ 2,063,346  $ 3,880,774  $ 7,262,765  $ 9,166,674
      Items not
       affecting cash
        Amortization of
         capital assets       434,155      321,637    1,507,219    1,304,675
        Amortization of
         intangible assets     15,999       15,998       63,994       15,998
        Unrealized foreign
         exchange loss
         (gain)                23,131     (447,454)   1,150,608     (156,831)
        Stock-based
         compensation          44,841       73,580      177,129      271,786
        Future income
         taxes               (262,582)  (1,795,754)     (23,742)  (1,795,754)
        Gain on disposal
         of capital assets          -            -            -       (3,476)
      Changes in non-cash
       working capital items (297,270)   2,234,840   (2,792,986)    (388,291)
    -------------------------------------------------------------------------
                            2,021,620    4,283,621    7,344,987    8,414,781
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of capital
       assets                (469,450)    (432,297)  (2,165,807)  (1,345,803)
      Acquisition of
       business and assets
       of Nandra Group Inc.         -     (397,580)           -     (397,580)
      Proceeds from disposal
       of capital assets            -            -            -        7,717
      Purchase of investment   (2,065)           -       (2,065)     (35,978)
    -------------------------------------------------------------------------
                             (471,515)    (829,877)  (2,167,872)  (1,771,644)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Repayment of
       obligations under
       capital lease          (25,647)     (63,253)    (121,263)    (253,882)
      Proceeds from the
       exercise of stock
       options                 24,781      197,927      739,723    2,836,977
    -------------------------------------------------------------------------
                                 (866)     134,674      618,460    2,583,095
    -------------------------------------------------------------------------

    Effect of exchange rate
     changes on cash and
     cash equivalents         (23,131)     447,454   (1,150,608)     156,831
    NET INCREASE IN CASH
     AND CASH EQUIVALENTS   1,526,108    4,035,872    4,644,967    9,383,063

    CASH AND CASH
     EQUIVALENTS, BEGINNING
     OF PERIOD             19,554,563   12,399,832   16,435,704    7,052,641
    -------------------------------------------------------------------------
    CASH AND CASH
     EQUIVALENTS,
     END OF PERIOD        $21,080,671  $16,435,704  $21,080,671  $16,435,704
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CASH AND CASH
     EQUIVALENTS:
      Cash                $ 5,675,765  $ 8,132,595  $ 5,675,765  $ 8,132,595
      Cash equivalents     15,404,906    8,303,109   15,404,906    8,303,109
    -------------------------------------------------------------------------
                          $21,080,671  $16,435,704  $21,080,671  $16,435,704
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL CASH
     FLOW INFORMATION
      Interest paid       $     1,968  $    19,930  $    10,159  $    38,504
      Interest received       234,902      143,598      774,918      357,475

    SUPPLEMENTAL
     DISCLOSURE OF NON-CASH
     FINANCING AND
     INVESTING ACTIVITIES

    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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