Belzberg Reports Second Quarter 2007 Financial Results



    TORONTO, Aug. 9 /CNW/ - Belzberg Technologies Inc. (TSX-BLZ), a provider
of technology-based equity and options trading services, announced today that
in the second quarter ended June 30, 2007 net earnings were $1.7 million
inclusive of a $0.3 million foreign exchange loss as compared to $2.0 million
same quarter last year.
    Total revenues for the second quarter increased 17% to $11.1 million
versus $9.5 million in the same year-ago period. Diluted earnings per share
for the second quarter were $0.11 per share as compared to $0.13 per share in
the same year-ago period.

    
    -------------------------------------------------------------------------
    Financial Highlights
    (in millions of dollars,          Three months ended    Six months ended
     except per share data)                  June 30,            June 30,
    (unaudited)                           2007      2006      2007      2006
    -------------------------------------------------------------------------
    Revenue                            $  11.1   $   9.5   $  22.0   $  18.4
    Net earnings                       $   1.7   $   2.0   $   3.4   $   3.8
    Diluted earnings per share         $  0.11   $  0.13   $  0.22   $  0.26
    -------------------------------------------------------------------------
    

    "The second quarter results were at record revenue levels. The company
made several important investments in the quarter to sustain long term revenue
growth and continue to have distinct competences in the derivatives and
options trading arena as well as in clearing," stated Sid Belzberg, Chief
Executive Officer of Belzberg Technologies. "We have made significant strides
in developing new products and services that are being rolled out to our
customers in the third quarter."
    The company has now completed installation and deployment of its back
office clearing infrastructure and software and is conducting internal tests.
The first customers are expected to be installed during the third quarter and
represent an important growth opportunity for the company. The company has
also installed its Options Order Management Systems/Indication of Interest
Chat blasting products at some of the CBOE Belzberg HyTS customers' sites and
volumes have increased with greater usage of the system. The company plans to
continue deploying its Options Order Management systems at further sites
during the third quarter.
    Total revenue of options contracts traded both electronically and
non-electronically was $4.8 million in the second quarter of 2007 compared to
$3.4 million in the same year-ago quarter. Average total daily volume of
equity and index options contracts traded both electronically and
non-electronically on the floor of the CBOE and on other exchanges were
287,000 contracts per day in the second quarter of 2007 compared to 281,000
contracts per day in the same year-ago quarter.
    Total revenue of U.S. equity order flow was $3.5 million in the second
quarter of 2007 compared to $3.2 million in the same year-ago quarter. Average
daily volume of equity order flow executed by Belzberg Technologies wholly
owned U.S. broker-dealer subsidiary decreased by 29% to 32.1 million shares
per day in the second quarter of 2007 compared to 45.2 million shares per day
in the same year-ago quarter.  The year over year decline in U.S. equity order
flow volumes was mainly attributable to the loss of one high volume customer
that obtained its own NYSE membership at the end of the fourth quarter of
2006.
    The Company strengthened its financial position with cash and cash
equivalents of $18.1 million and working capital of $25.4 million at June 30,
2007, up from cash and cash equivalents of $17.8 million and working capital
of $24.0 million at March 31, 2007.
    The Company continues its strategic process; however no assurances can be
made that the process will result in strategic opportunities for the Company
and its shareholders.

    Patent Information

    In January 1999, Belzberg received a U.S. Patent Number 5,864,827,
recognizing its exclusive rights to intellectual property for a System and
Method for Providing a Protocol Transaction Gateway. The patent protects
Belzberg's Transactions Gateway, a system that translates the protocol of
incoming transaction messages from customers into the appropriate protocol
used by various exchanges and market makers. The technology facilitates
electronic stock trading by allowing customers to execute trades on any market
they choose from a single screen.

    About Belzberg Technologies

    Belzberg Technologies Inc. is a provider of technology-based brokerage
services, trading equities and options through Electronic Brokerage Systems,
Belzberg Technologies' wholly owned agency-only broker-dealer. Electronic
Brokerage Systems is a member of most North American stock exchanges, options
exchanges and clearing organizations, including the NYSE, NASDAQ, CBOE, NSCC
and OCC. Using Belzberg's suite of integrated trading tools and network
connectivity, Belzberg's customers have direct access to all North American
equities and options markets. The firm's client-base includes over 200 leading
U.S and international brokerage houses and financial institutions. Belzberg
Technologies is listed on the Toronto Stock Exchange (Ticker-BLZ) - additional
information is available at www.belzberg.com.

    Forward looking statement disclaimer

    Except for historical information contained herein, the matters discussed
in this press release are based on forward-looking statements that involve
risk and uncertainty. A variety of important factors could cause results to
differ materially from such statements, including but not limited to economic,
competitive, governmental and technological factors affecting the company's
operation, markets, products, prices and other factors.


    
    Notice

    The consolidated financial statements have not been reviewed by an
    external auditor

    BELZBERG TECHNOLOGIES INC.
    Consolidated Balance Sheets
    (in Canadian dollars)
    -------------------------------------------------------------------------
                                                       June 30,  December 31,
                                                          2007          2006
                                                    (Unaudited)     (Audited)
                                                  ------------- -------------
    ASSETS

    CURRENT
      Cash and cash equivalents                   $ 18,126,307  $ 16,435,704
      Deposits with and receivables from brokers,
       dealers and clearing organizations            4,291,090     2,741,562
      Accounts receivable                            5,392,061     4,704,665
      Prepaid expenses and other receivables           512,075       406,349
      Other current assets                             195,053       176,034
      Investment tax credits recoverable               530,880       597,835
      Future income tax asset                        1,655,754     1,795,754
    -------------------------------------------------------------------------
                                                    30,703,220    26,857,903

    CAPITAL ASSETS                                   2,740,758     2,296,813

    INVESTMENT                                          35,978        35,978

    GOODWILL                                         1,608,471     1,608,471

    OTHER INTANGIBLE ASSETS, NET                       271,973       303,970
    -------------------------------------------------------------------------
                                                  $ 35,360,400  $ 31,103,135
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities    $  5,193,320  $  4,542,478
      Current portion of obligations under
       capital lease                                    83,533       116,473
    -------------------------------------------------------------------------
                                                     5,276,853     4,658,951

    OBLIGATIONS UNDER CAPITAL LEASE                          -        32,059
    -------------------------------------------------------------------------
                                                     5,276,853     4,691,010
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    CAPITAL STOCK                                   39,055,657    38,840,032

    CONTRIBUTED SURPLUS                              3,591,640     3,518,871

    DEFICIT                                        (12,563,750)  (15,946,778)
    -------------------------------------------------------------------------
                                                    30,083,547    26,412,125
    -------------------------------------------------------------------------
                                                  $ 35,360,400  $ 31,103,135
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Operations and Deficit
    (in Canadian dollars)
    (Unaudited)
    -------------------------------------------------------------------------
                      Three months ended June 30,   Six months ended June 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
    REVENUE
      Transaction fees:
        Equity order
         flow         $  4,142,364  $  3,869,833  $  8,351,288  $  7,466,260
        Options and
         futures
         contracts       4,777,912     3,362,476     9,227,139     6,479,664
    -------------------------------------------------------------------------
                         8,920,276     7,232,309    17,578,427    13,945,924

      Subscription
       fees              1,863,312     1,848,334     3,748,718     3,673,160

      Other revenue        321,864       408,658       676,686       761,352
    -------------------------------------------------------------------------
    TOTAL REVENUE       11,105,452     9,489,301    22,003,831    18,380,436
    -------------------------------------------------------------------------

    EXPENSES
      Exchange,
       clearing and
       brokerage fees    3,504,387     2,965,525     6,734,503     5,434,224
      Compensation
       and related
       benefits          2,715,295     2,097,012     5,516,817     4,308,451
      Telecommunication
       and datafeed
       services          1,553,266     1,238,585     3,078,544     2,517,158
      Administrative
       and other
       expenses          1,106,644       926,293     2,321,799     1,769,400
      Strategic process
       expenses             10,000             -        97,652             -
      Amortization of
       capital assets      346,921       333,295       676,729       657,271
      Amortization of
       intangible
       assets               15,999             -        31,997             -
      Government
       assistance                -      (107,009)            -      (107,009)
      Foreign exchange
       loss                343,818        97,581       531,482        83,874
    -------------------------------------------------------------------------
                         9,596,330     7,551,282    18,989,523    14,663,369
    -------------------------------------------------------------------------

    EARNINGS BEFORE
     THE UNDERNOTED      1,509,122     1,938,019     3,014,308     3,717,067

      Interest expense       1,680         5,877         6,937        13,607
      Interest income     (194,402)      (71,368)     (375,657)     (102,041)

    -------------------------------------------------------------------------

    EARNINGS BEFORE
     INCOME TAXES        1,701,844     2,003,510     3,383,028     3,805,501

    PROVISION FOR
     INCOME TAXES                -             -             -             -

    -------------------------------------------------------------------------

    NET EARNINGS         1,701,844     2,003,510     3,383,028     3,805,501

    DEFICIT, BEGINNING
     OF PERIOD         (14,265,594)  (23,311,461)  (15,946,778)  (25,113,452)

    -------------------------------------------------------------------------
    DEFICIT, END
     OF PERIOD        $(12,563,750) $(21,307,951) $(12,563,750) $(21,307,951)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EARNINGS PER SHARE:
      Basic           $       0.12  $       0.14  $       0.23  $       0.27
      Diluted         $       0.11  $       0.13  $       0.22  $       0.26
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WEIGHTED AVERAGE NUMBER OF COMMON AND
     COMMON EQUIVALENT SHARES OUTSTANDING

      Basic             14,665,419    14,051,827    14,650,155    13,980,854
      Diluted           15,208,185    14,861,733    15,245,309    14,695,337
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Cash Flows
    (in Canadian dollars)
    (Unaudited)
    -------------------------------------------------------------------------
                      Three months ended June 30,   Six months ended June 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
    CASH PROVIDED BY
     (USED FOR)

    OPERATING
     ACTIVITIES
      Net earnings    $  1,701,844  $  2,003,510  $  3,383,028  $  3,805,501
      Items not
       affecting cash
        Amortization
         of capital
         assets            346,921       333,295       676,729       657,271
        Amortization of
         intangible
         assets             15,999             -        31,997             -
        Unrealized
         foreign
         exchange loss     620,072       304,985       695,148       277,790
        Stock-based
         compensation       43,407        56,481        85,952       125,040
        Future income
         taxes             124,880             -       140,000             -
      Changes in
       non-cash
       working
       capital items    (1,522,651)     (187,071)   (2,003,376)     (515,816)
    -------------------------------------------------------------------------
                         1,330,472     2,511,200     3,009,478     4,349,786
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of
       capital assets     (391,504)     (388,248)     (761,170)     (619,881)
      Purchase of
       investment                -             -             -       (35,978)
    -------------------------------------------------------------------------
                          (391,504)     (388,248)     (761,170)     (655,859)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Repayment of
       obligations
       under capital
       lease               (35,571)      (41,555)      (64,999)     (158,851)
      Proceeds from
       the exercise
       of stock
       options              40,542       202,238       202,442       761,426
    -------------------------------------------------------------------------
                             4,971       160,683       137,443       602,575
    -------------------------------------------------------------------------

    Effect of exchange
     rate changes on
     cash and cash
     equivalents          (620,072)     (304,985)     (695,148)     (277,790)
    NET INCREASE IN
     CASH AND CASH
     EQUIVALENTS           323,867     1,978,650     1,690,603     4,018,712

    CASH AND CASH
     EQUIVALENTS,
     BEGINNING OF
     PERIOD             17,802,440     9,092,703    16,435,704     7,052,641
    -------------------------------------------------------------------------
    CASH AND CASH
     EQUIVALENTS,
     END OF PERIOD    $ 18,126,307  $ 11,071,353  $ 18,126,307  $ 11,071,353
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CASH AND CASH
     EQUIVALENTS:
      Cash            $  4,824,075  $  5,557,375  $  4,824,075  $  5,557,375
      Cash equivalents  13,302,232     5,513,978    13,302,232     5,513,978
    -------------------------------------------------------------------------
                      $ 18,126,307  $ 11,071,353  $ 18,126,307  $ 11,071,353
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL
     CASH FLOW
     INFORMATION
      Interest paid   $     1,680   $      5,877  $      6,937  $     13,607
      Interest received   164,516         69,212       346,237        97,263

    SUPPLEMENTAL
     DISCLOSURE OF
     NON-CASH FINANCING
     AND INVESTING
     ACTIVITIES

    Acquisition of
     capital assets
     included in
     accounts payable
     and accrued
     liabilities      $    561,951  $    148,336  $    561,951  $    148,336
    





For further information:

For further information: Sid Belzberg, Chief Executive Officer, Phone:
(416) 360-1812, E-mail: investorinfo@belzberg.com

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BELZBERG TECHNOLOGIES INC.

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