Belzberg Reports Second Quarter 2009 Financial Results



    TORONTO, Aug. 10 /CNW/ - 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, 2009, the net loss was $1.4
million as compared to a net loss of $0.4 million same quarter last year.
These results represent an improvement over the net loss of $1.8 million in
the first quarter of 2009.
    "Your management continues to focus on improving operations and
controlling costs in this challenging market environment," said Judith
Robertson, President and CEO. "Lower revenues compared to the first quarter
(net of pass-throughs) were principally a result of lower US trading volumes
and Canadian subscription fees which is consistent with industry-wide trends.
Unfortunately, the significant improvements we made to operating expenses and
new client growth were not enough to off-set the volume decline in the second
quarter."

    
    Major achievements in the second quarter include:

    -   Expenses (excluding restructuring charges) declined $0.7 million from
        the first quarter.
    -   Added 10 new clients in the second quarter across equities and
        options.
    -   Added 2 new clearing clients.
    -   Planning for an important new technology upgrade in the third
        quarter.
    

    "We are excited by the new technology upgrade planned for September,
2009," said Judith Robertson, President and CEO. "It is the first firm-wide
release that incorporates new features and functionality for both equity and
options traders along with an improved user interface. This represents an
important milestone for the Company and will assist in its efforts to gain and
retain clients."
    Total revenues for the second quarter, including pass-throughs on which
the Company makes no margin, increased 21% to $10.8 million versus $9.0
million in the same year-ago period. Revenues net of pass-throughs decreased
by 12% to $5.8 million from $6.6 million in the same year-ago period. A
strengthening US dollar positively impacted revenues before pass-throughs by
approximately $0.6 million.
    Diluted loss per share for the second quarter was $(0.09) per share as
compared to a loss of $(0.03) 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)                        2009       2008       2009       2008
    -------------------------------------------------------------------------
    Revenue                       $    10.8  $     9.0  $    22.1  $    18.6
    Revenue before pass-throughs  $     5.8  $     6.6  $    12.4  $    14.1
    Net earnings (loss)           $    (1.4) $    (0.4) $ (3.2)(*) $     0.7
    Diluted earnings (loss)
     per share                    $   (0.09) $   (0.03) $   (0.22) $    0.05
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) Includes restructuring charges of $0.8 million
    


    Business Line Revenues

    Total equity and clearing revenues before pass-throughs were $2.3 million
in the second quarter of 2009 compared to $2.1 million in the same year-ago
quarter. A strengthening US dollar positively impacted equity and clearing
revenues by approximately $0.3 million.
    Total revenue of option contracts before pass-throughs traded both
electronically and non-electronically was $2.3 million in the second quarter
of 2009 compared to $2.7 million in the same year-ago quarter. A strengthening
US dollar positively impacted option revenues by approximately $0.3 million.
    Total subscription based revenue was $1.2 million in the second quarter
of 2009 compared to $1.8 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 206,000 contracts per day in the second
quarter of 2009 as compared to 266,000 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)
    -------------------------------------------------------------------------

                                                       June 30,  December 31,
                                                          2009          2008
                                                    (Unaudited)     (Audited)
                                                    -----------   -----------

    ASSETS

    CURRENT
      Cash and cash equivalents                      $  13,464     $  19,452
      Cash and cash equivalents segregated under
       regulations and other                             2,890           184
      Cash and cash equivalents on deposit with
       clearing and depository organizations             5,100         1,989
      Receivable from brokers, dealers and
       clearing organizations                            1,938         1,774
      Accounts receivable                                4,977         5,973
      Prepaid expenses and other receivables               715           534
      Other assets                                         823         1,565
      Income taxes receivable                              104            89
      Investment tax credits recoverable                    34            84
    -------------------------------------------------------------------------
                                                        30,045        31,644

    CAPITAL ASSETS                                       3,111         3,326

    INVESTMENT                                              30            38

    INVESTMENT TAX CREDITS RECOVERABLE                   1,634         1,580

    FUTURE INCOME TAX ASSETS                             4,681         3,289

    GOODWILL                                             1,608         1,608

    OTHER INTANGIBLE ASSETS, NET                           370           473
    -------------------------------------------------------------------------
                                                     $  41,479     $  41,958
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities       $   6,364     $   6,350
      Payable to customers and correspondents            2,624           183
      Payable to brokers, dealers and
       clearing organizations                               26           131
    -------------------------------------------------------------------------
                                                         9,014         6,664

    FUTURE INCOME TAX LIABILITIES                          511           244

    -------------------------------------------------------------------------
                                                         9,525         6,908
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    CAPITAL STOCK                                       23,920        23,930

    CONTRIBUTED SURPLUS                                  3,829         3,686

    RETAINED EARNINGS                                    4,205         7,434
    -------------------------------------------------------------------------
                                                        31,954        35,050
    -------------------------------------------------------------------------
                                                     $  41,479     $  41,958
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Operations and Retained Earnings
    (in thousands of Canadian dollars except per share amounts)
    (Unaudited)
    -------------------------------------------------------------------------

                                    Three months ended      Six months ended
                                           June 30,              June 30,
                                       2009       2008       2009       2008
                                  ---------- ---------- ---------- ----------
    REVENUE
      Transaction fees:
        Equity order flow and
         clearing                 $   6,242  $   3,157  $  12,532  $   6,936
        Options and futures
         contracts                    2,997      3,672      6,186      7,288
    -------------------------------------------------------------------------
                                      9,239      6,829     18,718     14,224

      Subscription fees               1,223      1,787      2,618      3,640

      Other revenue                     360        358        772        700
    -------------------------------------------------------------------------
    TOTAL REVENUE                    10,822      8,974     22,108     18,564
    -------------------------------------------------------------------------

    EXPENSES
      Exchange, clearing and
       brokerage fees                 5,478      3,136     11,022      5,456
      Compensation and
       related benefits               3,162      2,951      6,917      5,731
      Telecommunication and
       datafeed services              2,067      1,662      4,117      3,216
      Administrative and other
       expenses                       1,052      1,416      2,242      2,509
      Restructuring expenses              -          -        839          -
      Government assistance             (95)         -        (95)         -
      Amortization of
       capital assets                   534        465      1,057        928
      Amortization of
       intangible assets                 55         47        110         85
      Foreign exchange loss             364         58        532        117
    -------------------------------------------------------------------------
                                     12,617      9,735     26,741     18,042
    -------------------------------------------------------------------------

    EARNINGS (LOSS) BEFORE
     THE UNDERNOTED                  (1,795)      (761)    (4,633)       522

      Interest expense                   12          -         18          -
      Interest income                   (44)      (149)      (131)      (336)
    -------------------------------------------------------------------------
                                        (32)      (149)      (113)      (336)
    -------------------------------------------------------------------------

    EARNINGS (LOSS) BEFORE
     INCOME TAXES                    (1,763)      (612)    (4,520)       858

    PROVISION FOR (RECOVERY OF)
     INCOME TAXES
      Current                             -          -          -          7
      Future                           (358)      (184)    (1,291)       161
    -------------------------------------------------------------------------
                                       (358)      (184)    (1,291)       168
    -------------------------------------------------------------------------

    NET EARNINGS  (LOSS)             (1,405)      (428)    (3,229)       690

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

    REDUCTION OF STATED CAPITAL           -     16,000          -     16,000

    -------------------------------------------------------------------------
    RETAINED EARNINGS, END OF
     PERIOD                           4,205      8,006      4,205      8,006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EARNINGS (LOSS) PER SHARE:
      Basic                       $   (0.09) $   (0.03) $   (0.22) $    0.05
      Diluted                     $   (0.09) $   (0.03) $   (0.22) $    0.05
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WEIGHTED AVERAGE NUMBER OF
     COMMON AND COMMON EQUIVALENT
     SHARES OUTSTANDING:
      (in thousands)
      Basic                          14,829     14,846     14,832     14,819
      Diluted                        14,829     14,938     14,832     14,936
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Cash Flows
    (in thousands of Canadian dollars)
    (Unaudited)
    -------------------------------------------------------------------------
                                    Three months ended      Six months ended
                                           June 30,              June 30,
                                       2009       2008       2009       2008
                                  ---------- ---------- ---------- ----------
    CASH PROVIDED BY (USED FOR)

    OPERATING ACTIVITIES
      Net earnings (loss)         $  (1,405) $    (428) $  (3,229) $     690
      Items not affecting cash
        Amortization of capital
         assets                         534        465      1,057        928
        Amortization of intangible
         assets                          55         47        110         85
        Unrealized foreign
         exchange loss (gain)            68         49        382       (195)
        Gain on sale of investment        -          -         (5)         -
        Stock-based compensation         80         39        143         78
        Future income taxes            (111)      (178)    (1,125)       134
      Changes in non-cash working
       capital items                  7,159       (568)    (2,093)     1,021
    -------------------------------------------------------------------------
                                      6,380       (574)    (4,760)     2,741
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of capital assets       (415)      (218)      (842)    (1,242)
      Purchase of intangibles             -       (171)        (7)      (212)
      Purchase of investment              -          -         (2)         -
      Proceeds from sale of
       investment                         -          -         15          -
    -------------------------------------------------------------------------
                                       (415)      (389)      (836)    (1,454)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Repayment of obligations
       under capital lease                -          -          -        (27)
      Repurchase of common shares         -        (37)       (10)      (273)
      Proceeds from the exercise
       of stock options                   -         14          -        364
    -------------------------------------------------------------------------
                                          -        (23)       (10)        64
    -------------------------------------------------------------------------

    Effect of exchange rate
     changes on cash and cash
     equivalents                        (68)       (49)      (382)       195
    NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS             5,897     (1,035)    (5,988)     1,546

    CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD              7,567     23,662     19,452     21,081
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS,
     END OF PERIOD                $  13,464  $  22,627  $  13,464  $  22,627
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CASH AND CASH EQUIVALENTS:
      Cash                        $   4,648  $   4,983  $   4,648  $   4,983
      Cash equivalents                8,816     17,644      8,816     17,644
    -------------------------------------------------------------------------
                                  $  13,464  $  22,627  $  13,464  $  22,627
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL CASH FLOW
     INFORMATION
      Interest received           $      49  $     164  $     139  $     345
      Interest paid                      12          -         18          -
      Income taxes paid                   -         77         15        130
    




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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