Burntsand Releases Fourth Quarter and FY2007 Results



    TORONTO, March 4 /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, 2007.

    
    Fourth Quarter Financial Results Highlights (000's) - unaudited

                                         Q4              Year ended Dec. 31
                               ----------------------  ----------------------
                                  2007        2006        2007        2006

    Service Revenue            $   5,314   $   5,391   $  22,879   $  20,326
    Revenue                    $   5,636   $   5,854   $  26,481   $  23,638
    EBITDA(1)                  $     393   $     (90)  $     461   $    (344)
    Net (Loss) Income          $     336   $    (259)  $       6   $    (801)

    Cash and equivalents                               $   3,644   $   3,902
    Working capital                                    $   4,716   $   5,015


    Highlights

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

    -   The second consecutive quarter of positive EBITDA;
    -   Positive EBITDA in three of the four quarters in 2007; and
    -   The second consecutive quarter of positive net income and positive
        net income for the year

    In addition to these achievements in the fiscal year, the company has made
positive progress in the first quarter of 2008. These include:

    -   Two contract announcements: $1.4 million for a biotechnology client
        and $375,000 with a second client to implement ITIL
    -   The successful completion of a significant contract started in 2007
    

    "Our 2007 results are very encouraging as demonstrated by three key
metrics. Our professional services revenue grew at 13% - the second
consecutive year of growth. Our EBITDA and net income continues to improve
over the prior year and most importantly for the future, our client
relationships remain strong, with 82% of our clients engaging us for multiple
projects and new work in 2007," said Martin Glover, Burntsand's President and
Chief Executive Officer.

    Results for the Fourth Quarter ended December 31, 2007

    Total revenue for the fourth quarter was $5.6 million compared to
$5.9 million for the fourth quarter of 2006. The Company's top 10 accounts
accounted for approximately 56% of revenue; and US operations contributing 69%
of the revenues for the quarter.
    While total revenue decreased slightly EBITDA for the fourth quarter
improved significantly to $393,000 compared to a loss of ($90,000) for the
fourth quarter of 2006.
    Net income for the fourth quarter of 2007 was $336,000 or $0.00 per
share, compared with a net loss of ($259,000) or ($0.00) per share in the
fourth quarter of 2006.
    The Company's results are impacted by the effect of foreign exchange on
the consolidation of our US operations. The weighted average exchange rates
used for consolidation were $0.981 and $1.138 in 2007 and 2006 respectively.
If the foreign exchange rate had held constant with Q4 2006 rates, Q4 2007
revenue and EBITDA would have increased by $624,000 and $101,000 respectively.

    Results for the year ended December 31, 2007

    Total revenue for the year was $26.5 million compared to $23.6 million
for the previous year. The increase in revenue was a result of several factors
including an improvement in service for the year. The Company's US operations
contributed 64% of the total revenues for the year, compared to 61% in the
previous year. Our increase in revenue is notwithstanding a decrease of 14% in
the exchange rate.
    EBITDA for the year was $461,000 compared to ($344,000) for the previous
year. The EBITDA improvement of $0.8 million was due to improved revenues and
gross margin ($0.7 million) and a decrease in expenses ($0.1 million).
    Net income for the year was $6,000 or $0.00 per share, compared with a
net loss of ($801,000) or ($0.01) per share for the previous year. The net
income for the year was an improvement of $0.8 million.
    Our results for the year are impacted by the effect of foreign exchange
on the consolidation of our US operations. The weighted average exchange rates
used for consolidation ("consolidation foreign exchange rate") were $1.075 and
$1.33 in 2007 and 2006 respectively. If the foreign exchange rate had held
constant with 2006 rates, 2007 revenue and EBITDA would have increased by
$929,000 and $127,000 respectively.

    Financial Position at December 31, 2007

    The Company finished the period ended December 31, 2007 with cash and
short-term investments of $3.6 million compared to $3.9 million at
December 31, 2006. The Company has not borrowed under its Line of Credit.
    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, BMC 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,
                                                    2007            2006
                                                -------------   -------------
                                                 (unaudited)

    ASSETS

    CURRENT
      Cash and cash equivalents                 $  3,643,932    $  1,168,324
      Short-term investments                               -       2,734,121
      Accounts receivable                          3,781,308       4,272,488
      Prepaid expenses                               192,530         483,736
    -------------------------------------------------------------------------
                                                   7,617,770       8,658,669
    Capital assets                                 1,172,430       1,585,936
    Goodwill                                         144,517         169,898
    -------------------------------------------------------------------------
                                                $  8,934,717    $ 10,414,503
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities  $  2,068,648    $  2,454,187
      Deferred revenue                               706,250       1,067,246
      Current portion of obligations
       under capital leases                          127,298         121,871
    -------------------------------------------------------------------------
                                                   2,902,196       3,643,304
    Long-term portion of deferred revenue             59,820         105,839
    Long-term portion of obligations
     under capital leases                            101,173         236,578
    -------------------------------------------------------------------------
                                                   3,063,189       3,985,721
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
      Common shares                                9,602,855       9,588,902
      Contributed surplus                          1,159,680       1,052,745
      Deficit                                     (2,022,371)     (2,028,375)
      Accumulated other comprehensive loss        (2,868,636)     (2,184,490)
    -------------------------------------------------------------------------
                                                   5,871,528       6,428,782
    -------------------------------------------------------------------------
                                                $  8,934,717    $ 10,414,503
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BURNTSAND INC.
    Consolidated Statements of Operations

    -------------------------------------------------------------------------
                              Three months ended       Twelve months ended
                                 December 31,              December 31,
                          ------------------------- -------------------------
                              2007         2006         2007         2006
                          ------------ ------------ ------------ ------------
                           (unaudited)  (unaudited)  (unaudited)

    REVENUE
      Services            $ 5,314,379  $ 5,391,450  $22,879,256  $20,325,832
      License and
       maintenance            116,449      260,594    2,632,169    2,547,010
      Other revenue           205,500      201,728      969,587      764,897
    -------------------------------------------------------------------------
                            5,636,328    5,853,772   26,481,012   23,637,739
    -------------------------------------------------------------------------

    COSTS
      Cost of services      3,442,390    3,807,345   15,286,160   13,534,334
      Cost of license
       and maintenance         92,018      173,321    2,401,605    2,155,949
      Cost of other revenue   189,874      185,746      901,207      713,542
    -------------------------------------------------------------------------
                            3,724,282    4,166,412   18,588,972   16,403,825
    -------------------------------------------------------------------------
    GROSS PROFIT            1,912,046    1,687,360    7,892,040    7,233,914
    -------------------------------------------------------------------------
    EXPENSES
      Sales and marketing     385,924      445,746    1,796,669    1,907,094
      General and
       administrative         621,742      800,026    3,041,762    3,100,491
      Other expenses          511,194      531,771    2,592,294    2,570,096
    -------------------------------------------------------------------------
                            1,518,860    1,777,543    7,430,725    7,577,681
    -------------------------------------------------------------------------
    Earning/(loss) before
     amortization, interest
     and income taxes         393,186      (90,183)     461,315     (343,767)
    Amortization of
     capital assets           (91,790)    (111,409)    (432,126)    (472,772)
    Interest and investment
     income                    45,800       29,546       94,633      104,302
    Interest expense and
     financing costs          (11,085)     (86,683)     (80,718)     (88,314)
    Income tax expense              -            -      (37,100)           -
    -------------------------------------------------------------------------
    NET INCOME/(LOSS)
     FOR THE PERIOD       $   336,111  $  (258,729)       6,004     (800,551)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

      Income (loss),
       basic and diluted,
       per share          $      0.00  $     (0.00) $      0.00  $     (0.01)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number
     of common shares used
     to calculate per
     share amounts,
     basic and diluted     72,552,793   72,502,885   72,523,977   72,719,962
    -------------------------------------------------------------------------



    BURNTSAND INC.
    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
                              Three months ended       Twelve months ended
                                 December 31,              December 31,
                          ------------------------- -------------------------
                              2007         2006         2007         2006
                          ------------ ------------ ------------ ------------
                           (unaudited)  (unaudited)  (unaudited)

    CASH FLOWS FROM
     OPERATING ACTIVITIES
      Net income/(loss)
       for the period         336,111     (258,729)       6,004     (800,551)
      Items not
       affecting cash:
        Amortization of
         capital assets
         and intangibles       91,790      111,409      432,126      472,772
        Amortization of
         assets used in
         outsourcing
         contract              44,260       43,905      177,040       51,637
        Stock-based
         compensation          36,714       18,212      111,675      144,027
        ------------------------------------------- -------------------------
        ------------------------------------------- -------------------------
                              508,875      (85,203)     726,845     (132,115)
      Changes in operating
       assets and
       liabilities:
        Accounts
         receivable         1,116,223    1,213,798      (49,726)    (955,165)
        Prepaid expenses      149,323      (76,886)     264,338       19,053
        Accounts payable
         and accrued
         liabilities         (742,362)  (1,238,303)    (197,552)     428,707
        Deferred revenue     (304,058)    (198,118)    (375,964)     682,733
        Accrued
         restructuring
         charge                     -      (41,475)           -     (303,072)
    ----------------------------------------------- -------------------------
                              728,001     (426,187)     367,941     (259,859)
    ----------------------------------------------- -------------------------

    CASH FLOWS FROM
     INVESTING ACTIVITIES
      Short term investments        -      317,029    2,696,558     (924,452)
      Purchase of capital
       assets, net of
       related accounts
       payable               (134,853)     107,312     (272,238)    (317,495)
    ----------------------------------------------- -------------------------
                             (134,853)     424,341    2,424,320   (1,241,947)
    ----------------------------------------------- -------------------------

    CASH FLOWS FROM
     FINANCING ACTIVITIES
      Payments on capital
       lease obligations      (31,119)     (17,570)    (119,357)     (22,216)
      Issue of common shares    3,750            -        9,213            -
      Purchase of shares
       under Normal Course
       Issuer Bid                   -            -            -      (44,785)
    ----------------------------------------------- -------------------------
    ----------------------------------------------- -------------------------
                              (27,369)     (17,570)    (110,144)     (67,001)
    ----------------------------------------------- -------------------------
    ----------------------------------------------- -------------------------
    NET CASH FLOW AND
     CASH EQUIVALENTS         565,779      (19,416)   2,682,117   (1,568,807)
    EFFECT OF FOREIGN
     EXCHANGE RATE CHANGES
     ON CASH AND CASH
     EQUIVALENTS                5,938       23,110     (206,509)     (19,344)

    CASH AND CASH
     EQUIVALENTS,
     BEGINNING OF PERIOD    3,072,215    1,164,630    1,168,324    2,756,475
    ----------------------------------------------- -------------------------

    CASH AND CASH
     EQUIVALENTS,
     END OF PERIOD          3,643,932    1,168,324    3,643,932    1,168,324
    ----------------------------------------------- -------------------------
    ----------------------------------------------- -------------------------

    

    %SEDAR: 00007529E




For further information:

For further information: Martin Glover, President & CEO, Voice: (617)
923-6611, Email: MGlover@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