Burntsand Releases Third Quarter Results



    TORONTO, Oct. 30 /CNW/ - Burntsand Inc. (Burntsand) (TSX:BRT) a North
American business consulting and technology services company today reported
revenue and earnings results for its third quarter ended September 30, 2007.

    
    Third Quarter Financial Results Highlights (000's)

                           Three months ended           Nine months ended
                                 Sept 30                     Sept 30
                      --------------------------- ---------------------------
                           2007          2006          2007          2006

    Service Revenue    $     5,372   $     5,688   $    17,565   $    14,934
    Total Revenue      $     6,690   $     7,187   $    20,845   $    17,784
    EBITDA(1)          $       391   $       150   $        68   $      (254)
    Net Income (Loss)  $       277   $        68   $      (330)  $      (542)

                                                             As At
                                                  ---------------------------
                                                    30-Sep-07     30-Jun-07

    Cash and equivalents                           $     3,072   $     2,402
    Working capital                                $     4,493   $     4,122


    Highlights

    The third quarter results include a number of highlights for the company.
These include:


    -   The Company achieved EBITDA of $0.4 million and Net Income of
        $0.3 million is the best quarterly result since Q3 2001 and more than
        double the comparable quarter in 2006.

    -   The Company's opening backlog for Q4 2007 was consistent at
        $6.6 million with opening backlog in Q4 2006. The Company is
        scheduled to deliver $3.8 million during Q4 2007 compared to
        $3.5 million during Q4 2006. Actual service revenue in Q4 2006 was
        $5.4 million.

    -   The Company worked on 139 projects for 65 customers in Q3 2007
        compared to 127 projects for 78 customers in Q3 2006.
    

    "The results of the third quarter of 2007 represent solid progress for
Burntsand as we continue to focus and execute more effectively in key markets.
I am pleased with the operational progress and financial results achieved this
quarter." said Martin Glover, Burntsand's President and Chief Executive
Officer. "Our backlog scheduled to be delivered in the next quarter, projects
per customer and most importantly EBITDA, demonstrates this progress."

    Results for the Third Quarter ended September 30, 2007

    Total revenue for the third quarter was $6.7 million compared to
$7.2 million for the third quarter of 2006. The Company's top 10 clients
accounted for approximately 63% of revenue; and US operations contributed 61%
of the revenues for the quarter. The US operations of the Company incurs both
revenue and costs in US dollars, therefore the impact of changes in the US
dollar exchange rate is only on net earnings from the US operation. The impact
of foreign exchange accounts for the majority of the decrease in service
revenue in the quarter, however the natural hedge of US based expenses on
exchange rate fluctuations has minimized the foreign exchange impact on our
financial results.
    EBITDA(1) for the third quarter was $391,000 compared to $150,000 for the
third quarter of 2006. The improvement in EBITDA is as a result of reduced
expenses from cost management initiatives.
    Net Income for the third quarter of 2007 was $277,000 or $0.00 per share,
compared with a net income of $68,000 or $0.00 per share in the third quarter
of 2006.

    Financial Position at September 30, 2007

    The Company finished the period ended September 30, 2007 with cash and
short-term investments of $3.1 million compared to $2.4 million at June 30,
2007. The increase in cash and short term investments of $0.7 million from
June 30, 2007 was a result of reduced working capital requirements
($0.4 million); the current period net income excluding items not affecting
cash ($0.4 million) and the use of cash on other miscellaneous items
($0.1 million). The Company has no bank debt outstanding.
    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, Microsoft and BMC 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

    -------------------------------------------------------------------------
                                                  September 30,  December 31,
                                                       2007          2006
                                                  ------------- -------------
                                                   (unaudited)
    ASSETS

    CURRENT
      Cash and cash equivalents                    $ 3,072,215   $ 1,168,324
      Short-term investments                                 -     2,734,121
      Accounts receivable                            4,911,887     4,272,488
      Prepaid expenses                                 343,069       483,736
    -------------------------------------------------------------------------
                                                     8,327,171     8,658,669
    Capital assets                                   1,240,376     1,585,936
    Goodwill and other intangibles                     145,027       169,898
    -------------------------------------------------------------------------
                                                   $ 9,712,574  $ 10,414,503
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities     $ 2,874,964  $  2,454,187
      Deferred revenue                                 832,514     1,067,246
      Current portion of obligations under
       capital leases                                  126,711       121,871
    -------------------------------------------------------------------------
                                                     3,834,189     3,643,304
    Long-term portion of deferred revenue              239,544       105,839
    Long-term portion of obligations under
     capital leases                                    133,132       236,578
    -------------------------------------------------------------------------
                                                     4,206,865     3,985,721
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
      Common shares                                  9,597,305     9,588,902
      Contributed surplus                            1,124,766     1,052,745
      Deficit                                       (2,358,482)   (2,028,375)
      Accumulated other comprehensive loss          (2,857,880)   (2,184,490)
    -------------------------------------------------------------------------
                                                     5,505,709     6,428,782
    -------------------------------------------------------------------------
                                                   $ 9,712,574   $10,414,503
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BURNTSAND INC.
    Consolidated Statements of Operations

    -------------------------------------------------------------------------
                           Three months ended          Nine months ended
                              September 30,               September 30,
                      --------------------------- ---------------------------
                           2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
                       (unaudited)   (unaudited)   (unaudited)   (unaudited)

    REVENUE
      Services         $ 5,372,103   $ 5,687,967   $17,564,877   $14,934,382
      License and
       maintenance       1,053,982     1,252,870     2,515,720     2,286,416
      Other revenue        263,835       246,354       764,087       563,169
    -------------------------------------------------------------------------
                         6,689,920     7,187,191    20,844,684    17,783,967
    -------------------------------------------------------------------------

    COSTS
      Cost of services   3,482,554     3,608,473    11,843,770     9,726,989
      Cost of license
       and maintenance     973,084     1,128,654     2,309,587     1,982,628
      Cost of other
       revenue             243,009       210,981       711,333       527,796
    -------------------------------------------------------------------------
                         4,698,647     4,948,108    14,864,690    12,237,413
    -------------------------------------------------------------------------
    GROSS PROFIT         1,991,273     2,239,083     5,979,994     5,546,554
    -------------------------------------------------------------------------
    EXPENSES
      Sales and
       marketing           345,024       545,224     1,410,745     1,461,348
      General and
       administrative      660,854       846,249     2,420,020     2,300,465
      Other expenses       594,479       697,867     2,081,100     2,038,325
    -------------------------------------------------------------------------
                         1,600,357     2,089,340     5,911,865     5,800,138
    -------------------------------------------------------------------------
    Earning (loss)
     before amortization,
     interest and income
     taxes                 390,916       149,743        68,129      (253,584)
    Amortization of
     capital assets       (105,493)     (113,216)     (340,336)     (361,363)
    Interest and
     investment income       8,066        32,107        48,833        74,756
    Interest expense and
     financing costs       (16,263)         (188)      (69,633)       (1,631)
    Income Taxes                 -             -       (37,100)            -
    -------------------------------------------------------------------------
    NET INCOME/(LOSS)
     FOR THE PERIOD    $   277,226   $    68,446      (330,107)     (541,822)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

      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  72,528,046    72,502,885    72,514,266    72,793,116
    -------------------------------------------------------------------------



    BURNTSAND INC.
    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
                           Three months ended          Nine months ended
                              September 30,               September 30,
                      --------------------------- ---------------------------
                           2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
                       (unaudited)   (unaudited)   (unaudited)   (unaudited)

    CASH FLOWS FROM
     OPERATING
     ACTIVITIES
      Net income (loss)
       for the period      277,226        68,446      (330,107)     (541,822)
      Items not
       affecting cash:
        Amortization
         of capital
         assets and
         intangibles       105,493       113,216       340,336       361,363
        Amortization
         of assets
         used in
         outsourcing
         contract           44,260         7,732       132,780         7,732
        Stock-based
         compensation       22,930        41,619        74,961       125,815
    --------------------------------------------- ---------------------------
                           449,909       231,013       217,970       (46,912)
      Changes in
       operating assets
       and liabilities:
        Accounts
         receivable        (50,292)   (1,703,315)   (1,165,949)   (2,168,963)
        Prepaid expenses   (62,041)      107,045       115,015        95,939
        Accounts payable
         and accrued
         liabilities       245,335     1,290,815       544,810     1,667,010
        Deferred revenue   268,275       919,125       (71,906)      880,851
        Accrued
         restructuring
         charge                  -       (83,826)            -      (261,597)
    --------------------------------------------- ---------------------------
                           851,186       760,857      (360,060)      166,328
    --------------------------------------------- ---------------------------

    CASH FLOWS FROM
     INVESTING ACTIVITIES
      Short term
       investments               -    (1,716,191)    2,696,558    (1,241,481)
      Purchase of capital
       assets, net of
       related accounts
       payable             (18,583)     (325,509)     (137,385)     (424,807)
    --------------------------------------------- ---------------------------
                           (18,583)   (2,041,700)    2,559,173    (1,666,288)
    --------------------------------------------- ---------------------------

    CASH FLOWS FROM
     FINANCING ACTIVITIES
      Payments on capital
       lease obligations   (30,971)       (1,567)      (88,238)       (4,646)
      Issue of common
       shares                3,900             -         5,463       (44,785)
    --------------------------------------------- ---------------------------
                           (27,071)       (1,567)      (82,775)      (49,431)
    --------------------------------------------- ---------------------------
    NET CASH FLOW          805,532    (1,282,410)    2,116,338    (1,549,391)
    EFFECT OF FOREIGN
     EXCHANGE RATE
     CHANGES ON CASH      (135,117)       32,848      (212,447)      (42,454)
    CASH (EXCLUDING
     SHORT TERM
     INVESTMENTS),
     BEGINNING OF
     PERIOD              2,401,800     2,414,192     1,168,324     2,756,475
    --------------------------------------------- ---------------------------
    CASH (EXCLUDING
     SHORT TERM
     INVESTMENTS),
     END OF PERIOD       3,072,215     1,164,630     3,072,215     1,164,630
    --------------------------------------------- ---------------------------
    --------------------------------------------- ---------------------------
    

    %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