Belzberg Reports Third Quarter 2007 Financial Results



    TORONTO, Nov. 6 /CNW/ -Belzberg Technologies Inc. (TSX -BLZ), a provider
of technology-based equity and options trading services, announced today that
in the third quarter ended September 30, 2007 net earnings were $1.8 million
inclusive of a $0.2 million foreign exchange loss as compared to $1.5 million
same quarter last year.
    Total revenue for the third quarter increased 10% to $9.7 million versus
$8.8 million in the same year-ago period. On a sequential quarter basis total
revenue growth was adversely impacted by $1.1 million from lower pass-through
revenue that has no impact on the Company's profitability and by $0.3 million
from a strengthening Canadian dollar.
    Diluted earnings per share for the third quarter were $0.12 per share as
compared to $0.10 per share in the same year-ago period.

    
    -------------------------------------------------------------------------
    Financial Highlights        Three months ended         Nine months ended
    (in millions of dollars,       September 30,              September 30,
     except per share data)      2007      2006            2007      2006
    (unaudited)
    -------------------------------------------------------------------------
    Revenue                       $  9.7    $  8.8          $ 31.7    $ 27.2
    Net earnings                  $  1.8    $  1.5          $  5.2    $  5.3
    Diluted earnings per share    $ 0.12    $ 0.10          $ 0.34    $ 0.36
    -------------------------------------------------------------------------
    

    "The third quarter results were solid in a seasonally slow period.
Unusual volatility in August created a record month for the Company that was
followed by an industry wide slow down in September. Overall, the third
quarter was strong with continuing strength in October from renewed market
volatility. We have completed the installation, deployment and testing of our
back office clearing infrastructure and software at the end of the third
quarter. The first clearing customers have been signed up and represent an
important growth opportunity for the Company," stated Sid Belzberg, Chief
Executive Officer of Belzberg Technologies.
    The Company strengthened its financial position with cash and cash
equivalents of $19.6 million and working capital of $27.6 million at September
30, 2007, up from cash and cash equivalents of $18.1 million and working
capital of $25.4 million at June 30, 2007.
    Total revenue of option contracts traded both electronically and
non-electronically was $4.1 million in the third quarter of 2007 compared to
$2.9 million in the same year-ago quarter. On a sequential quarter basis
option pass-through revenue decreased by approximately $0.4 million and a
strengthening Canadian dollar impacted option revenue by approximately
$0.2 million.
    Average total daily volume of equity and index options contracts traded
both electronically and non-electronically on the floor of the CBOE and on
other exchanges were 280,000 contracts per day in the third quarter of 2007
compared to 230,000 contracts per day in the same year-ago quarter.
    Total revenue of U.S. equity order flow was $3.4 million in the third
quarter of 2007 compared to $3.7 million in the same year-ago quarter. The
year over year decline in U.S. equity order flow revenue resulted mainly from
a decrease in equity pass-through revenue of approximately $0.5 million and a
strengthening Canadian dollar that impacted equity revenue by approximately
$0.2 million. On a sequential quarter basis equity pass-through revenue
decreased by approximately $0.7 million.
    During the third quarter stock options to purchase 1,175,000 common
shares expired unexercised. The Company has 14,782,974 common shares and
600,417 stock options outstanding as at September 30, 2007.
    The Company intends to make application to the TSX for approval of a
Normal Course Issuer Bid.

    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. The patent protects
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.

    
    Notice

    The consolidated financial statements have not been reviewed by an
    external auditor

    BELZBERG TECHNOLOGIES INC.
    Consolidated Balance Sheets
    (in Canadian dollars)
    -------------------------------------------------------------------------

                                                September 30,    December 31,
                                                        2007            2006
                                                  (Unaudited)       (Audited)
                                                -------------   -------------

    ASSETS

    CURRENT
      Cash and cash equivalents                 $ 19,554,563    $ 16,435,704
      Deposits with and receivables from
       brokers, dealers and clearing
       organizations                               3,504,573       2,741,562
      Accounts receivable                          4,526,261       4,704,665
      Prepaid expenses and other receivables         529,244         406,349
      Other current assets                           780,988         176,034
      Investment tax credits recoverable             530,880         597,835
      Future income tax asset                      1,556,914       1,795,754
    -------------------------------------------------------------------------
                                                  30,983,423      26,857,903

    CAPITAL ASSETS                                 2,920,106       2,296,813

    INVESTMENT                                        35,978          35,978

    GOODWILL                                       1,608,471       1,608,471

    OTHER INTANGIBLE ASSETS, NET                     255,975         303,970
    -------------------------------------------------------------------------
                                                $ 35,803,953    $ 31,103,135
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities  $  3,292,263    $  4,542,478
      Current portion of obligations
       under capital lease                            52,916         116,473
    -------------------------------------------------------------------------
                                                   3,345,179       4,658,951

    OBLIGATIONS UNDER CAPITAL LEASE                        -          32,059
    -------------------------------------------------------------------------
                                                   3,345,179       4,691,010
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    CAPITAL STOCK                                 39,568,157      38,840,032

    CONTRIBUTED SURPLUS                            3,637,976       3,518,871

    DEFICIT                                      (10,747,359)    (15,946,778)
    -------------------------------------------------------------------------
                                                  32,458,774      26,412,125
    -------------------------------------------------------------------------
                                                $ 35,803,953    $ 31,103,135
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

                              Three months ended           Nine months ended
                                    September 30,               September 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------

    REVENUE
      Transaction fees:
        Equity
         order flow   $  3,395,388  $  3,709,686  $ 11,746,676  $ 11,175,946
        Options and
         futures
         contracts       4,122,716     2,917,526    13,349,855     9,397,190
    -------------------------------------------------------------------------
                         7,518,104     6,627,212    25,096,531    20,573,136

      Subscription
       fees              1,821,398     1,846,125     5,570,116     5,519,285

      Other revenue        347,134       324,072     1,023,820     1,085,424
    -------------------------------------------------------------------------
    TOTAL REVENUE        9,686,636     8,797,409    31,690,467    27,177,845
    -------------------------------------------------------------------------

    EXPENSES
      Exchange,
       clearing and
       brokerage fees    2,232,021     2,700,631     8,966,524     8,134,855
      Compensation and
       related benefits  2,667,873     2,040,045     8,184,690     6,348,496
      Telecommunication
       and datafeed
       services          1,531,115     1,224,627     4,609,659     3,741,785
      Administrative and
       other expenses      989,437       893,637     3,311,236     2,663,037
      Strategic process
       expenses             93,437       213,767       191,089       213,767
      Amortization of
       capital assets      396,335       325,767     1,073,064       983,038
      Amortization of
       intangible assets    15,998             -        47,995             -
      Government
       assistance                -             -             -      (107,009)
      Foreign
       exchange loss       157,749        34,706       689,231       118,580
    -------------------------------------------------------------------------
                         8,083,965     7,433,180    27,073,488    22,096,549
    -------------------------------------------------------------------------

    EARNINGS BEFORE
     THE UNDERNOTED      1,602,671     1,364,229     4,616,979     5,081,296

      Interest expense       1,254         4,967         8,191        18,574
      Interest income     (214,974)     (121,137)     (590,631)     (223,178)

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

    EARNINGS BEFORE
     INCOME TAXES        1,816,391     1,480,399     5,199,419     5,285,900

    PROVISION FOR
     INCOME TAXES                -             -             -             -
    -------------------------------------------------------------------------
    NET EARNINGS         1,816,391     1,480,399     5,199,419     5,285,900

    DEFICIT, BEGINNING
     OF PERIOD         (12,563,750)  (21,307,951)  (15,946,778)  (25,113,452)

    -------------------------------------------------------------------------
    DEFICIT,
     END OF PERIOD    $(10,747,359) $(19,827,552) $(10,747,359) $(19,827,552)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EARNINGS
     PER SHARE:
      Basic           $       0.12  $       0.10  $       0.35  $       0.38
      Diluted         $       0.12  $       0.10  $       0.34  $       0.36
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WEIGHTED AVERAGE
     NUMBER OF COMMON
     AND COMMON
     EQUIVALENT SHARES
     OUTSTANDING

      Basic             14,682,295    14,277,933    14,661,025    14,081,337
      Diluted           15,125,074    15,075,487    15,210,635    14,839,763
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

                              Three months ended           Nine months ended
                                    September 30,               September 30,
                      ------------- ------------- ------------- -------------
                              2007          2006          2007          2006

    CASH PROVIDED BY
     (USED FOR)

    OPERATING
     ACTIVITIES
      Net earnings    $  1,816,391  $  1,480,399  $  5,199,419  $  5,285,900
      Items not
       affecting cash
        Amortization
         of capital
         assets            396,335       325,767     1,073,064       983,038
        Amortization
         of intangible
         assets             15,998             -        47,995             -
        Unrealized
         foreign
         exchange
         loss (gain)       495,190        (9,531)    1,200,869       238,390
        Stock-based
         compensation       46,336        73,166       132,288       198,206
        Future
         income taxes       98,840             -       238,840             -
        Gain on disposal
         of capital assets       -        (3,476)            -        (3,476)
      Changes in non-cash
       working capital
       items              (507,452)   (2,165,921)   (2,510,828)   (2,681,737)
    -------------------------------------------------------------------------
                         2,361,638      (299,596)    5,381,647     4,020,321
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of
       capital assets     (920,075)     (235,019)   (1,681,245)     (854,900)
      Proceeds from
       disposal of
       capital assets            -         7,717             -         7,717
      Purchase of
       investment                -             -             -       (35,978)
    -------------------------------------------------------------------------
                          (920,075)     (227,302)   (1,681,245)     (883,161)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Repayment of
       obligations
       under capital
       lease               (30,617)      (31,778)      (95,616)     (190,629)
      Proceeds from the
       exercise of stock
       options             512,500     1,877,624       714,942     2,639,050
    -------------------------------------------------------------------------
                           481,883     1,845,846       619,326     2,448,421
    -------------------------------------------------------------------------

    Effect of exchange
     rate changes on
     cash and cash
     equivalents          (495,190)        9,531    (1,200,869)     (238,390)
    NET INCREASE IN
     CASH AND CASH
     EQUIVALENTS         1,428,256     1,328,479     3,118,859     5,347,191

    CASH AND CASH
     EQUIVALENTS,
     BEGINNING
     OF PERIOD          18,126,307    11,071,353    16,435,704     7,052,641
    -------------------------------------------------------------------------
    CASH AND CASH
     EQUIVALENTS,
     END OF PERIOD    $ 19,554,563  $ 12,399,832  $ 19,554,563  $ 12,399,832
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CASH AND CASH
     EQUIVALENTS:
      Cash            $  5,779,705  $  8,189,690  $  5,779,705  $  8,189,690
      Cash
       equivalents      13,774,858     4,210,142    13,774,858     4,210,142
    -------------------------------------------------------------------------
                      $ 19,554,563  $ 12,399,832  $ 19,554,563  $ 12,399,832
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL CASH
     FLOW INFORMATION
      Interest paid   $      1,254  $      4,967  $      8,191  $     18,574
      Interest
       received            193,779       116,614       540,016       213,877

    SUPPLEMENTAL
     DISCLOSURE OF
     NON-CASH
     FINANCING AND
     INVESTING
     ACTIVITIES

    Acquisition of
     capital assets
     included in
     accounts payable
     and accrued
     liabilities      $    217,559  $    186,228  $    217,559  $    186,228
    





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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