Burntsand Releases Fourth Quarter and FY2006 Results



    TORONTO, March 8 /CNW/ - Burntsand Inc. (Burntsand) (TSX:BRT) a North
American business consulting and technology services company today reported
revenue and earnings results for its fourth quarter and year ended
December 31, 2006.

    
    Fourth Quarter Financial Results Highlights (000's)

                          Three months ended Dec. 31      Year ended Dec. 31
                          ---------------------------  ----------------------
                                  2006        2005        2006         2005

    Service Revenue            $   5,391   $   4,467   $  20,326   $  17,737
    Revenue                    $   5,854   $   5,126   $  23,638   $  20,780
    EBITDA(1)                  $     (90)  $      10   $    (344)  $  (1,344)
    Net Loss                   $    (259)  $    (127)  $    (801)  $  (1,932)

    Cash and equivalents       $   3,902   $   4,518   $   3,902   $   4,518
    Working capital            $   5,015   $   5,587   $   5,015   $   5,587


    Highlights

    The fourth quarter and fiscal year results include a number of significant
achievements for the company. These accomplishments include:

    -   service revenue for each of the last three quarters have increased
        over the comparable quarter and the total year over year growth was
        15%;
    -   we significantly reduced the EBITDA(1) loss and net loss from the
        prior year by $1,000,000 and $1,100,000 respectively; and
    -   we entered the new year with more than double the contract backlog of
        the previous year ($6.9 million vs. $3.2 million)
    -   the receipt and signing of a commitment letter from the Silicon
        Valley Bank for a line of credit of up to US$5,000,000 to fund growth
        and acquisitions.

    In addition to these achievements in the fiscal year, the company has made
positive progress in the first quarter of 2007. These include:

    -   the signing of four clients with significant contracts worth between
        $475,000 and $960,000 individually and $2.7 million in aggregate; all
        of which were announced in press releases;
    -   being named as EMC Software Group's top worldwide Select Services
        Team partner for 2006.
    

    "These 2006 results are encouraging and the progress continues to show
promise. Improvements like these come from a strong Strategic Plan and a
dedicated and resourceful group of employees to implement it," said Tim Duffy,
Burntsand's President and Chief Executive Officer. "Equally encouraging is the
strong backlog of $6.9 million entering 2007."

    Results for the Fourth Quarter ended December 31, 2006

    Total revenue for the fourth quarter was $5.8 million compared to
$5.1 million for the fourth quarter of 2005. The Company's top 10 accounts
accounted for approximately 59% of revenue; and US operations contributing 65%
of the revenues for the quarter.
    EBITDA for the fourth quarter was ($90,000) compared to $10,000 for the
fourth quarter of 2005.
    Net loss for the fourth quarter of 2006 was ($259,000) or ($0.00) per
share, compared with a net loss of ($127,000) or ($0.00) per share in the
fourth quarter of 2005.

    Results for the year ended December 31, 2006

    Total revenue for the year was $23.6 million compared to $20.8 million
for the previous year. The increase in revenue was a result of several factors
including an improvement in utilization for the year. The Company's US
operations contributed 61% of the total revenues for the year, compared to 58%
in the previous year.
    EBITDA for the year was ($0.3) million compared to ($1.3) million for the
previous year. The EBITDA improvement of $1 million was due to improved
revenues ($2.9 million) and gross margin ($1.1 million) and offset by only a
minor increase in expenses ($0.1 million).
    Net loss for the year was ($0.8) million or ($0.01) per share, compared
with a net loss of ($1.9) million or ($0.03) per share for the previous year.
The net loss for the year was also a reduction of $1.1 million.

    Financial Position at December 31, 2006

    The Company finished the period ended December 31, 2006 with cash and
short-term investments of $3.9 million compared to $4.5 million at
December 31, 2005. The Company has no bank debt.
    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

    With a unique and forward-thinking focus on helping clients unify
enterprise information to increase productivity and insight, Burntsand is a
North American leader in the delivery of Enterprise Content Management,
Enterprise Operations and Service Management, Collaboration, and Customer
Relationship Management services. Burntsand delivers business advantage to its
mid-market clients through risk-managed projects and unmatched customer
experience. Strong partnerships with EMC, Remedy and Microsoft reflect the
company's business maturity and ensure technology depth. Headquartered in
Toronto, Burntsand operates from locations across North America. The Company's
shares (TSX: BRT) are traded on the Toronto Stock Exchange. More information
about Burntsand can be found 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.

    
    Notes

    (1) EBITDA
        ------
        EBITDA is defined as operating revenues less operating expenses and
        therefore reflects earnings before interest, taxes, depreciation and
        amortization, as well as any restructuring charges and impairment for
        goodwill. Burntsand uses EBITDA, amongst other measures, to assess
        the operating performance of its on-going businesses. The term 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. EBITDA should
        not be construed as the equivalent of net cash flows from operating
        activities.


    BURNTSAND INC.
    Consolidated Balance Sheets

    -------------------------------------------------------------------------
                                                 December 31,    December 31,
                                                      2006           2005
                                                -------------- --------------
    ASSETS

    CURRENT
      Cash                                      $   1,168,324  $   2,756,475
      Short-term investments                        2,734,121      1,761,578
      Accounts receivable                           4,272,488      3,285,774
      Prepaid expenses                                483,736        504,421
    -------------------------------------------------------------------------
                                                    8,658,669      8,308,248
    Capital assets                                  1,585,936      1,356,662
    Goodwill and other intangibles                    169,898        169,548
    -------------------------------------------------------------------------
                                                $  10,414,503  $   9,834,458
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities  $   2,454,187  $   1,915,154
      Deferred revenue                              1,067,246        488,633
      Accrued restructuring charge                          -        311,006
      Current portion of obligations
       under capital leases                           121,871          6,233
    -------------------------------------------------------------------------
                                                    3,643,304      2,721,026
    Long-term portion of deferred revenue             105,839              -
    Long-term portion of obligations
     under capital leases                             236,578          9,938
    -------------------------------------------------------------------------
                                                    3,985,721      2,730,964
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
      Common shares                                 9,588,902      9,633,687
      Contributed surplus                           1,052,745        908,718
      Deficit                                      (2,028,375)    (1,227,824)
      Cumulative translation adjustment            (2,184,490)    (2,211,087)
    -------------------------------------------------------------------------
                                                    6,428,782      7,103,494
    -------------------------------------------------------------------------
                                                $  10,414,503  $   9,834,458
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BURNTSAND INC.
    Consolidated Statements of Operations and Deficit

    ------------- ----------------------------- -----------------------------
                         Three months ended             Twelve months
                         ended December 31,           ended December 31,
                  ----------------------------- -----------------------------
                        2006           2005           2006           2005
                  -------------- ------------- --------------- --------------
                    (unaudited)    (unaudited)    (unaudited)    (unaudited)

    REVENUE
      Services    $   5,391,450  $   4,466,606  $  20,325,832  $  17,737,484
      License and
       maintenance      260,594        538,049      2,547,010      2,565,244
      Other revenue     201,728        121,192        764,897        477,717
    ------------- ----------------------------- -----------------------------
                      5,853,772      5,125,847     23,637,739     20,780,445
    ------------- ----------------------------- -----------------------------
    ------------- ----------------------------- -----------------------------

    COSTS
      Cost of
       services       3,807,345      2,960,121     13,534,334     12,175,928
      Cost of
       license and
       maintenance      173,321        402,852      2,155,949      2,062,785
      Cost of other
       revenue          185,746        118,702        713,542        446,162
    ------------- ----------------------------- -----------------------------
                      4,166,412      3,481,675     16,403,825     14,684,875
    ------------- ----------------------------- -----------------------------

    GROSS PROFIT      1,687,360      1,644,172      7,233,914      6,095,570
    ------------- ----------------------------- -----------------------------

    EXPENSES
      Sales and
       marketing        445,746        372,549      1,907,094      1,614,063
      General and
       administrative   800,026        573,196      3,100,491      2,784,689
      Other expenses    531,771        688,791      2,570,096      3,040,793
    ------------- ----------------------------- -----------------------------
                      1,777,543      1,634,536      7,577,681      7,439,545
    ------------- ----------------------------- -----------------------------
    Income/(loss)
     before
     restructuring,
     amortization,
     interest and
     income taxes       (90,183)         9,636       (343,767)    (1,343,975)
    Amortization of
     capital assets    (111,409)      (155,497)      (472,772)      (630,307)
    Amortization of
     intangibles              -              -              -        (40,920)
    Interest and
     investment
     income              29,546         18,651        104,302         84,832
    Interest expense
     and financing
     costs              (86,683)          (215)       (88,314)        (1,171)
    ------------- ----------------------------- -----------------------------
    NET LOSS FOR
     THE PERIOD        (258,729)      (127,425)      (800,551)    (1,931,541)

    DEFICIT,
     BEGINNING
     OF PERIOD       (1,769,646)    (1,079,469)    (1,227,824)  (107,552,025)

    Revaluation of
     share purchase
     loans                    -        (20,930)             -        (20,930)
    Reduction of
     stated capital           -              -              -    108,276,672

    ------------- ----------------------------- -----------------------------
    DEFICIT, END
     OF PERIOD    $  (2,028,375) $  (1,227,824) $  (2,028,375) $  (1,227,824)
    ------------- ----------------------------- -----------------------------
    ------------- ----------------------------- -----------------------------

      Loss, basic
      and diluted,
       per share  $       (0.00) $       (0.00) $       (0.01) $       (0.03)
    ------------- ----------------------------- -----------------------------
    ------------- ----------------------------- -----------------------------

    Weighted
     average
     number of
     common
     shares
     used to
     calculate
     per share
     amounts,
     basic and
     diluted         72,502,885     72,982,778     72,719,962     72,980,801
    ------------- ----------------------------- -----------------------------



    BURNTSAND INC.
    Consolidated Statements of Cash Flows

    ------------- ----------------------------- -----------------------------
                         Three months ended             Twelve months
                         ended December 31,           ended December 31,
                  ----------------------------- -----------------------------
                        2006           2005           2006           2005
                  -------------- -------------- -------------- --------------
                    (unaudited)    (unaudited)    (unaudited)    (unaudited)

    CASH FLOWS
     FROM
     OPERATING
     ACTIVITIES
      Net loss
       for the
       period     $    (258,729) $    (127,425) $    (800,551) $  (1,931,541)
      Items not
       affecting
       cash:
        Amortization
         of capital
         assets and
         intangibles    111,409        155,497        472,772        671,227
        Amortization
         of assets
         used in
         outsourcing
         contract        43,905              -         51,637              -
        Stock-based
         compensation    18,212         40,366        144,027        164,476
    ------------------------------------------- -----------------------------
                        (85,203)        68,438       (132,115)    (1,095,838)

      Changes in
       operating
       assets and
       liabilities:
        Accounts
         receivable   1,213,798       (380,830)      (955,165)       709,410
        Prepaid
         expenses       (76,886)        33,041         19,053        208,575
        Accounts
         payable
         and accrued
         liabilities (1,238,303)       170,851        428,707       (158,529)
        Deferred
         revenue       (198,118)       (49,844)       682,733       (399,371)
        Accrued
         restructuring
         charge         (41,475)       (77,372)      (303,072)      (488,242)
    ------------------------------------------- -----------------------------
                       (426,187)      (235,716)      (259,859)    (1,223,995)
    ------------------------------------------- -----------------------------

    CASH FLOWS FROM
     INVESTING
     ACTIVITIES
      Short term
       investments      317,029        493,042       (924,452)     1,619,673
      Purchase of
       capital
       assets,
       net of
       related
       accounts
       payable          (38,657)       (59,553)      (317,495)      (175,840)
      Disposal of
       assets under
       sale-leaseback   145,969              -              -              -
    ------------------------------------------- -----------------------------
                        424,341        433,489     (1,241,947)     1,443,833
    ------------------------------------------- -----------------------------

    CASH FLOWS FROM
     FINANCING
     ACTIVITIES
      Payments on
       capital lease
       obligations      (17,570)        (1,511)       (22,216)       (12,030)
      Issue of
       common
       shares                 -              -              -            139
      Purchase of
       shares under
       Normal Course
       Issuer Bid             -              -        (44,785)             -
    ------------------------------------------- -----------------------------
                        (17,570)        (1,511)       (67,001)       (11,891)
    ------------------------------------------- -----------------------------
    NET CASH (OUTFLOW)
     /INFLOW            (19,416)       196,262     (1,568,807)       207,947
    EFFECT OF FOREIGN
     EXCHANGE RATE
     CHANGES ON CASH     23,110           (556)       (19,344)       (42,498)
    CASH (EXCLUDING
     SHORT TERM
     INVESTMENTS),
     BEGINNING OF
     PERIOD           1,164,630      2,560,769      2,756,475      2,591,026
    ------------------------------------------- -----------------------------
    CASH (EXCLUDING
     SHORT TERM
     INVESTMENTS),
     END OF PERIOD    1,168,324      2,756,475      1,168,324      2,756,475
    ------------------------------------------- -----------------------------
    ------------------------------------------- -----------------------------
    

    %SEDAR: 00007529E




For further information:

For further information: Tim Duffy, President & CEO, Voice: (416)
234-3807, Email: TDuffy@burntsand.com; Blair Baxter, CFO, Voice: (416)
234-3852, Email: BBaxter@burntsand.com

Organization Profile

BURNTSAND INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890