Burntsand Releases Second Quarter 2009 Results and Announces New Chairman and New Board Member



    TORONTO, ON, Aug. 6, 2009 /CNW/ - Burntsand Inc. (Burntsand) (TSX:BRT) a
North American business consulting and technology services company today
reported revenue and earnings results for its second quarter ended June 30,
2009.

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

    

                        Three months ended June 30, Six months ended June 30,
                             2009          2008        2009         2008
                        -------------- ------------ ------------ ------------
    Service revenue       $     5,337  $     5,127  $    11,291  $    10,159
    Adjusted EBITDA
     (loss)(1)                     30         (156)          26         (197)
    Net loss                      (72)        (265)        (253)        (452)


                                                              As at
                                                      30-Jun-09    31-Dec-08
                                                    ------------ ------------
    Cash and cash
     equivalents                                    $     4,735  $     4,876
    Working capital                                       6,225        6,359
    

    Results for the Second Quarter ended June 30, 2009

    Service revenues for the second quarter of 2009 were $5.3 million
compared to $5.1 million for the second quarter of 2008. US operations
contributed $3.7 million of service revenue for the quarter, the same as the
$3.7 million for the second quarter of 2008. Gross profit on services revenue
was 30.0% for the second quarter of 2009 compared to 30.6% for the second
quarter of 2008.
    Adjusted EBITDA(1) for the second quarter of 2009 was $30,321 compared to
an Adjusted EBITDA (loss) of ($156,090) for the second quarter of 2008. Net
loss for the second quarter of 2009 was ($72,186) or ($0.00) per share
compared to a net loss of ($265,034) or ($0.00) per share for the second
quarter of 2008.
    Backlog as at June 30, 2009 was $5.4 million compared to $7.1 million as
at June 30, 2008.

    Results for the Six Month Period ended June 30, 2009

    Service revenues for the six month period ended June 30, 2009 were $11.3
million, up $1.1 million or 11% compared to $10.2 million for the same period
in 2008. US operations contributed $8.1 million of service revenue for the six
month period ended June 30, 2009 compared to $7.0 million for the same period
in 2008. Gross profit on services revenue was 28.2% for the six month period
ended June 30, 2009 compared to 29.4% for the same period in 2008.
    Adjusted EBITDA for the six month period ended June 30, 2009 was $26,233
compared to an Adjusted EBITDA (loss) of ($197,079) for the same period in
2008. Net loss for the first six months of 2009 was ($253,395) or ($0.00) per
share compared to a net loss of ($451,631) or ($0.01) per share for the first
six months of 2008. The net loss for the first six months of 2009 included a
non-recurring realized currency translation loss of $53,550.

    Financial Position at June 30, 2009

    As at June 30, 2009 the Company held cash and short-term investments of
$4.7 million and working capital of $6.2 million. This compared to $3.0
million of cash and short-term investments and working capital of $4.6 million
as at June 30, 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 to begin to create growth"
said Martin Glover, Burntsand's President and Chief Executive Officer. "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
utilization, project data, new customers and new contract information.

    New Board Member and New Chairman

    The Company announced today the appointment of Mr. Terry Holland, FCA as
Chairman of the Board of Directors of Burntsand. Mr. Holland has served as a
director of the Company since 1997 and has extensive experience as a board
member of numerous other public and private companies. Mr. Holland replaces
Mr. Jim Yeates as Chairman. Mr. Yeates will continue to serve as a Board
member of the Company.
    The Company also announced today the appointment of Mr. Jim Meekison as a
director of the Company. Mr. Meekison, is the Chairman and Chief Executive
Officer of Trimin Capital Corp., a private equity company. Mr. Meekison is
currently a board member of GMP Capital Inc., Sonor Investments Limited; and
Retrocom Mid-Market Real Estate Investment Trust and a number of charitable
foundations.
    "I look forward to serving as Chairman of the Board of Directors of
Burntsand as we continue to focus on improving profitability, revenue growth
and increasing shareholder value," said Mr. Holland. "I would also, on behalf
of Burntsand's board, management and staff, like to thank Mr. Jim Yeates for
serving as Burntsand's Chairman and to recognize his substantial contribution
to the Company since its inception. Jim is a founder and the original CEO of
Burntsand and in more recent years has provided strong leadership as its
Chairman."
    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 EBITDA for the periods indicated:

                        Three months ended June 30, Six months ended June 30,
                        --------------------------- -------------------------
                             2009          2008         2009         2008
                        -------------- ------------ ------------ ------------

    Net loss for the
     period               $   (72,186) $  (265,034) $  (253,395) $  (451,631)
    Amortization of
     capital assets
     and intangibles           66,392       84,293      141,573      170,543
    Interest and
     investment income         (5,761)     (13,777)     (15,666)     (40,569)
    Interest expense and
     financing costs            9,310       10,555       40,293       17,956
    Income tax expense              -            -            -       25,197
                        --------------------------- -------------------------
    Standardized EBITDA        (2,245)    (183,963)     (87,195)    (278,504)
    Realized currency
     translation loss               -            -       53,550            -
    Stock-based
     compensation              32,566       27,873       59,878       81,425
                        --------------------------- -------------------------
    Adjusted EBITDA
     (loss)               $    30,321  $  (156,090) $    26,233  $  (197,079)
                        --------------------------- -------------------------
                        --------------------------- -------------------------



    BURNTSAND INC.
    Consolidated Balance Sheets

    -------------------------------------------------------------------------
                                                      June 30,   December 31,
                                                        2009         2008
                                                    ------------ ------------
                                                     (unaudited)
    ASSETS

    CURRENT
      Cash and cash equivalents                     $ 4,734,556  $ 4,876,377
      Accounts receivable                             3,362,825    5,216,377
      Prepaid expenses                                  256,524      241,252
    -------------------------------------------------------------------------
                                                      8,353,905   10,334,006
    Capital assets                                      601,505      815,441
    Goodwill                                            169,548      177,566
    -------------------------------------------------------------------------
                                                    $ 9,124,958  $11,327,013
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities      $ 1,810,448  $ 2,828,319
      Deferred revenue                                  257,209    1,046,277
      Current portion of obligations under
       capital leases                                    60,959      100,089
    -------------------------------------------------------------------------
                                                      2,128,616    3,974,685
    Long-term portion of obligations under
     capital leases                                           -        4,926
    -------------------------------------------------------------------------
                                                      2,128,616    3,979,611
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
      Common shares                                   9,611,454    9,611,454
      Contributed surplus                             1,384,895    1,325,017

      Deficit                                        (2,492,456)  (2,239,061)
      Accumulated other comprehensive loss           (1,507,551)  (1,350,008)
    -------------------------------------------------------------------------
                                                     (4,000,007)  (3,589,069)
    -------------------------------------------------------------------------
                                                      6,996,342    7,347,402
    -------------------------------------------------------------------------
                                                    $ 9,124,958  $11,327,013
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BURNTSAND INC.
    Consolidated Statements of Operations

    -------------------------------------------------------------------------
                        Three months ended June 30, Six months ended June 30,
                        --------------------------- -------------------------
                              2009         2008         2009         2008
                        -------------- ------------ ------------ ------------
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)
    REVENUE
      Services            $ 5,336,596  $ 5,126,548  $11,290,804  $10,159,478
      License and
       maintenance                  -      457,625      101,354      586,936
      Other revenue           205,441      245,970      436,102      422,550
    ----------------------------------------------- -------------------------
                            5,542,037    5,830,143   11,828,260   11,168,964
    ----------------------------------------------- -------------------------

    COSTS
      Cost of services      3,734,480    3,557,279    8,107,878    7,176,881
      Cost of license and
       maintenance                  -      435,720       79,703      552,474
      Cost of other
       revenue                189,815      230,344      404,850      390,191
    ----------------------------------------------- -------------------------
                            3,924,295    4,223,343    8,592,431    8,119,546
    ----------------------------------------------- -------------------------

    GROSS PROFIT            1,617,742    1,606,800    3,235,829    3,049,418
    ----------------------------------------------- -------------------------
    EXPENSES
      Sales and marketing     593,905      578,353    1,114,620      969,978
      General and
       administrative         612,363      613,068    1,223,676    1,250,088
      Other expenses          413,719      599,342      931,178    1,107,856
    ----------------------------------------------- -------------------------
                            1,619,987    1,790,763    3,269,474    3,327,922
    ----------------------------------------------- -------------------------

    Loss before the
     undernoted                (2,245)    (183,963)     (33,645)    (278,504)
      Realized currency
       translation loss             -            -      (53,550)           -
      Amortization of
       capital assets         (66,392)     (84,293)    (141,573)    (170,543)
      Interest and
       investment income        5,761       13,777       15,666       40,569
      Interest expense and
       financing costs         (9,310)     (10,555)     (40,293)     (17,956)
    ----------------------------------------------- -------------------------
    Income loss before
     income taxes             (72,186)    (265,034)    (253,395)    (426,434)
    Income tax expense              -            -            -      (25,197)
    ----------------------------------------------- -------------------------
    NET LOSS FOR
     THE PERIOD           $   (72,186) $  (265,034) $  (253,395) $  (451,631)
    ----------------------------------------------- -------------------------
    ----------------------------------------------- -------------------------

      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               72,660,220   72,612,601   72,660,220   72,603,078
    ----------------------------------------------- -------------------------



    BURNTSAND INC.
    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
                        Three months ended June 30, Six months ended June 30,
                        --------------------------- -------------------------
                              2009         2008         2009         2008
                        -------------- ------------ ------------ ------------
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)

    CASH FLOWS FROM
     OPERATING
     ACTIVITIES

      Net loss for the
       period             $   (72,186) $  (265,034) $  (253,395) $  (451,631)
      Items not affecting
       cash:
        Amortization of
         capital assets
         and intangibles       66,392       84,293      141,573      170,543
        Amortization of
         assets used in
         outsourcing
         contract              44,260       44,260       88,520       88,520
        Realized currency
         translation loss           -            -       53,550            -
        Stock-based
         compensation          32,566       27,873       59,878       81,425
        ------------------------------------------- -------------------------
                               71,032     (108,608)      90,126     (111,143)

      Changes in operating
       assets and
       liabilities:
        Accounts receivable   206,494      (45,640)   1,748,304      (73,617)
        Prepaid expenses      (29,069)     293,016      (22,413)     (69,156)
        Accounts payable and
         accrued liabilities  (55,005)    (182,619)    (974,830)    (224,348)
        Deferred revenue     (249,263)    (274,210)    (792,336)    (101,857)
    ----------------------------------------------- -------------------------
                              (55,811)    (318,061)      48,851     (580,121)
    ----------------------------------------------- -------------------------

    CASH FLOWS FROM
     INVESTING ACTIVITIES
      Purchase of capital
       assets, net of
       related accounts
       payable                 (1,419)     (49,764)      (2,774)    (105,100)
    ----------------------------------------------- -------------------------
                               (1,419)     (49,764)      (2,774)    (105,100)
    ----------------------------------------------- -------------------------

    CASH FLOWS FROM
     FINANCING ACTIVITIES
      Payments on capital
       lease obligations      (33,963)     (30,810)     (68,446)     (62,679)
      Issue of common shares        -        5,000            -        5,000
    ----------------------------------------------- -------------------------
                              (33,963)     (25,810)     (68,446)     (57,679)
    ----------------------------------------------- -------------------------
    NET CASH OUTFLOW          (91,193)    (393,635)     (22,369)    (742,900)
    EFFECT OF FOREIGN
     EXCHANGE RATE
     CHANGES ON CASH         (187,713)     (16,003)    (119,452)      94,303
    CASH (EXCLUDING SHORT
     TERM INVESTMENTS),
     BEGINNING OF PERIOD    5,013,462    3,404,973    4,876,377    3,643,932
    ----------------------------------------------- -------------------------
    CASH (EXCLUDING SHORT
     TERM INVESTMENTS),
     END OF PERIOD        $ 4,734,556  $ 2,995,335  $ 4,734,556  $ 2,995,335
    ----------------------------------------------- -------------------------
    ----------------------------------------------- -------------------------
    

    %SEDAR: 00007529E




For further information:

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