Burntsand Releases First Quarter 2009 Results



    TORONTO, May 14 /CNW/ - Burntsand Inc. (Burntsand) (TSX:BRT) a North
American business consulting and technology services company today reported
revenue and earnings results for its first quarter ended March 31, 2009.

    
    First Quarter 2009 Financial Results Highlights (000's) - unaudited

                                                             Q1
                                               ------------------------------
                                                       2009             2008

    Service revenue                            $      5,954     $      5,033
    Total revenue                              $      6,286     $      5,339
    Adjusted EBITDA (loss)(1)                  $         (4)    $        (41)
    Net income (loss)                          $       (181)    $       (187)

    Cash and equivalents                       $      5,013     $      3,405
    Working capital                            $      6,507     $      4,734
    

    Results for the First Quarter ended March 31, 2009

    Service revenues for the first quarter of 2009 were $6.0 million compared
to $5.0 million for the first quarter of 2008. US operations contributed $4.4
million of service revenue for the quarter, an increase of $1.1 million
compared to $3.3 million for the first quarter of 2008. Approximately $0.8
million of the increase in US service revenue related to a stronger US dollar
in the first quarter of 2009 compared to the first quarter of 2008. Gross
profit on services revenue was 26.5% for the first quarter of 2009 compared to
28.1% for the first quarter of 2008.
    Adjusted EBITDA loss(1) for the first quarter of 2009 was ($4,088)
compared to ($40,989) for the first quarter of 2008. Net loss for the first
quarter of 2009 was ($181,209) or ($0.00) per share and included a
non-recurring realized foreign currency translation loss of ($53,550). Net
loss was ($186,597) or ($0.00) per share for the first quarter of 2008.
    Backlog as at March 31, 2009 was $6.3 million compared to $7.1 million as
at March 31, 2008.

    Financial Position at March 31, 2009

    As at March 31, 2009 the Company held cash and short-term investments of
$5.0 million and working capital of $6.5 million. This compared to $3.4
million of cash and short-term investments and working capital of $4.7 million
as at March 31, 2008. The Company has not borrowed under its US $2.5 million
line of credit.
    "While our cash, working capital and balance sheet remain strong we are
intensely focused on sales and marketing activities and improving our
operational effectiveness" said Martin Glover, Burntsand's President and Chief
Executive Officer. "In the current environment we continue to focus on
delivering cost effective solutions in our Collaboration, Enterprise Content
Management and Service Management practices in order to enhance our
competitive position." added Mr. Glover.
    The Company has filed its financial statements and management's
discussion and analysis on SEDAR at www.sedar.com. This information includes
various metrics and performance measurements used by the company, including
headcount information, average bill rates, utilization, project data, new
customers and new contract information.
    As always we invite your comments and encourage you to follow the
progress of your company on the Burntsand website at www.burntsand.com.

    About Burntsand

    Burntsand is a leader in the delivery of technology consulting services
for customers with complex information processing and information management
requirements in three practice areas - Enterprise Content Management,
Collaboration and Service Management - aligned around our strategic partners,
EMC, Microsoft and BMC. The Company delivers strategic design, technology
architecture and custom application development through our proven
Time-to-Value methodology, which mitigates business risk and speeds process
improvements and returns. Headquartered in Toronto, Burntsand operates from
locations across North America. The Company's shares (TSX: BRT) are traded on
the Toronto Stock Exchange. Learn more about Burntsand at www.burntsand.com.

    Forward Looking Statements

    Certain information in this press release and in other public
announcements contains forward-looking information. Such statements include,
but are not limited to, statements which indicate the results, events or
activities that Burntsand expects or anticipates will or may occur in the
future, including statements which give guidance as to future revenues or
other financial results of Burntsand and statements regarding the growth of
business or operations, competitive strengths and strategic initiatives and
plans. Such forward-looking statements can generally be identified by words
such as "outlook", "guidance", "estimate", "forecast", "objective",
"anticipate", "intend", "likely", "will", "may", "should", "could", "expect",
"believe", and similar expressions and statements relating to matters that are
not historical facts.
    The forward-looking statements in these documents are based upon the
reasonable beliefs of Burntsand and its management as of the date the
information; however, forward-looking statements involve risks and
uncertainties and are based upon factors that may change and assumptions that
may prove, with the passage of time, to be incorrect. Accordingly, undue
reliance should not be placed upon such statements. If factors materially
change or assumptions are materially incorrect, the actual results,
performance or achievements of Burntsand may be materially different from any
future results, performances or achievements expressed or implied by such
forward-looking statements.
    Important factors that could cause actual results, events or activities
to differ materially from the forward-looking statements contained in this
press release include: general economic business conditions; loss of key
employees; integration of acquisitions; stock market volatility; supply and
demand for services offered by Burntsand; changes in laws and regulations;
Burntsand's ability to compete successfully, protect its intellectual property
rights, and adapt to technological advances and changing industry standards
and other factors. Important assumptions that were used in making the
forward-looking statements include: effective daily rates, estimated
utilization, estimated new bookings and realization on contracts.
    All statements made in these documents that contain forward-looking
information are made as of the date of this document. Burntsand disclaims any
intention and undertakes no obligation to update or revise any forward-looking
statements to reflect new information, future events or otherwise.

    Note

    
    (1)  Adjusted EBITDA
    --------------------
    
    Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation, amortization, stock-based compensation expense as well as any
realized foreign currency translation losses or gains. Burntsand uses Adjusted
EBITDA, amongst other measures, to assess the operating performance of its
on-going businesses. The term Adjusted EBITDA does not have a standardized
meaning prescribed by Canadian generally accepted accounting principles and
therefore may not be comparable to similarly titled measures presented by
other companies. Adjusted EBITDA should not be construed as the equivalent of
net cash flows from operating activities. The following is a reconciliation of
net income (loss) to Adjusted EBTIDA for the periods indicated:

    
                                               ------------------------------
                                                 Three months ended March 31,
                                               ------------------------------
                                                    2009             2008
                                               -------------    -------------
    Loss for the period                        $   (181,209)    $   (186,597)
    Amortization of capital assets                   75,181           86,250
    Interest and investment income                   (9,905)         (26,792)
    Interest expense and financing charges           30,983            7,401
    Income taxes                                          -           25,197
    -------------------------------------------------------------------------
    Standardized EBITDA                             (84,950)         (94,541)
    Stock-based compensation                         27,312           53,552
    Realized currency translation loss               53,550                -
    -------------------------------------------------------------------------
    Adjusted EBITDA (loss)                     $     (4,088)    $    (40,989)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BURNTSAND INC.
    Consolidated Balance Sheets

    -------------------------------------------------------------------------
                                                  March 31,      December 31,
                                                    2009             2008
                                               -------------    -------------
                                                (unaudited)
    ASSETS

    CURRENT
      Cash and cash equivalents                $  5,013,462     $  4,876,377
      Accounts receivable                         3,790,080        5,216,377
      Prepaid expenses                              240,060          241,252
    -------------------------------------------------------------------------
                                                  9,043,602       10,334,006
    Capital assets                                  707,735          815,441
    Goodwill                                        183,879          177,566
    -------------------------------------------------------------------------
                                               $  9,935,216     $ 11,327,013
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities $  1,954,024     $  2,828,319
      Deferred revenue                              511,128        1,046,277
      Current portion of obligations under
       capital leases                                71,141          100,089
    -------------------------------------------------------------------------
                                                  2,536,293        3,974,685
    Long-term portion of obligations under
     capital leases                                       -            4,926
    -------------------------------------------------------------------------
                                                  2,536,293        3,979,611
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
      Common shares                               9,611,454        9,611,454
      Contributed surplus                         1,352,329        1,325,017

      Deficit                                    (2,420,270)      (2,239,061)
      Accumulated other comprehensive loss       (1,144,590)      (1,350,008)
    -------------------------------------------------------------------------
                                                 (3,564,860)      (3,589,069)
    -------------------------------------------------------------------------
                                                  7,398,923        7,347,402
    -------------------------------------------------------------------------
                                               $  9,935,216     $ 11,327,013
    -------------------------------------------------------------------------



    BURNTSAND INC.
    Consolidated Statements of Operations

    -------------------------------------------------------------------------
                                                 Three months ended March 31,
                                               ------------------------------
                                                    2009             2008
                                               -------------    -------------
                                                (unaudited)      (unaudited)

    REVENUE
      Services                                 $  5,954,208     $  5,032,930
      License and maintenance                       101,354          129,311
      Other revenue                                 230,661          176,580
    -------------------------------------------------------------------------
                                                  6,286,223        5,338,821
    -------------------------------------------------------------------------

    COSTS
      Cost of services                            4,373,398        3,619,602
      Cost of license and maintenance                79,703          116,754
      Cost of other revenue                         215,035          159,847
    -------------------------------------------------------------------------
                                                  4,668,136        3,896,203
    -------------------------------------------------------------------------
    GROSS PROFIT                                  1,618,087        1,442,618
    -------------------------------------------------------------------------
    EXPENSES
      Sales and marketing                           520,715          391,625
      General and administrative                    611,313          637,020
      Other expenses                                517,459          508,514
    -------------------------------------------------------------------------
                                                  1,649,487        1,537,159
    -------------------------------------------------------------------------

    Loss before the undernoted                      (31,400)         (94,541)
      Realized currency translation loss            (53,550)               -
      Amortization of capital assets                (75,181)         (86,250)
      Interest and investment income                  9,905           26,792
      Interest expense and financing costs          (30,983)          (7,401)
    -------------------------------------------------------------------------
    Loss before income taxes                       (181,209)        (161,400)
    Income tax expense                                    -          (25,197)
    -------------------------------------------------------------------------
    LOSS FOR THE PERIOD                        $   (181,209)    $   (186,597)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

      Loss, basic and diluted, per share       $      (0.00)    $      (0.00)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of common shares
     used to calculate per share amounts,
     basic and diluted                           72,660,220       72,593,554
    -------------------------------------------------------------------------



    BURNTSAND INC.
    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
                                                 Three months ended March 31,
                                               ------------------------------
                                                    2009             2008
                                               -------------    -------------
                                                (unaudited)      (unaudited)

    CASH FLOWS FROM OPERATING ACTIVITIES
      Loss for the period                      $  (181,209)     $   (186,597)
      Items not affecting cash:
        Amortization of capital assets              75,181            86,250
        Amortization of assets used in
         outsourcing contract                       44,260            44,260
        Realized currency translation loss          53,550                 -
        Stock-based compensation                    27,312            53,552
    -------------------------------------------------------------------------
                                                    19,094            (2,535)
      Changes in operating assets and
       liabilities:
        Accounts receivable                      1,541,810           (27,977)
        Prepaid expenses                             6,656          (362,172)
        Accounts payable and accrued liabilities  (919,825)          (41,729)
        Deferred revenue                          (543,073)          172,353
    -------------------------------------------------------------------------
                                                   104,662          (262,060)
    -------------------------------------------------------------------------

    CASH FLOWS FROM INVESTING ACTIVITIES
      Purchase of capital assets, net of
       related accounts payable                     (1,355)          (55,336)
    -------------------------------------------------------------------------
                                                    (1,355)          (55,336)
    -------------------------------------------------------------------------

    CASH FLOWS FROM FINANCING ACTIVITIES
      Payments on capital lease obligations        (34,483)          (31,869)
    -------------------------------------------------------------------------
                                                   (34,483)          (31,869)
    -------------------------------------------------------------------------
    NET CASH INFLOW (OUTFLOW)                       68,824          (349,265)
    EFFECT OF FOREIGN EXCHANGE RATE
      CHANGES ON CASH                               68,261           110,306
    CASH (EXCLUDING SHORT TERM
      INVESTMENTS), BEGINNING OF PERIOD          4,876,377         3,643,932
    -------------------------------------------------------------------------
    CASH (EXCLUDING SHORT TERM
      INVESTMENTS), END OF PERIOD              $ 5,013,462      $  3,404,973
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00007529E




For further information:

For further information: Contacts: Martin Glover, President & CEO,
Voice: (617) 923-6611, Email: MGlover@burntsand.com; Stephen W. Massel, CFO,
Voice: (416) 234-3852, Email: SMassel@burntsand.com

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BURNTSAND INC.

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