Belzberg Reports Third Quarter 2009 Financial Results

TORONTO, Nov. 11 /CNW/ - Belzberg Technologies Inc. (TSX -BLZ), a provider of technology-based equity and options trading services, announced the results for the third quarter ended September 30, 2009.

"Belzberg has achieved many important milestones over the past three months." said Judith Robertson, President and CEO. "Our technology upgrade was delivered on schedule and has been well-received by our clients. The improved trading platform, which is in the process of being rolled out to clients, will enhance the Company's competitive position in both equities and options."

    
    Major achievements in the third quarter include:

    -   Operating expenses (excluding restructuring charges and pass-
        throughs) declined $0.6 million from the second quarter and $1.6
        million from the first quarter.
    -   Average transaction fees have improved for both electronic equities
        and options as we continue to focus on improving our business mix;
    -   Added 6 net new clients in the third quarter across equities and
        options. New clearing clients are ramping up activity levels.
    

"In addition to product improvements, we continue to make meaningful improvements in our cost structure. Operating expenses net of pass-throughs in the third quarter were reduced 9% when compared to the second quarter and 20% when compared to the first quarter 2009." said Judith Robertson, President and CEO. "July and August are traditionally lower volume trading months with September showing a material improvement. Our reported revenues were also negatively affected by a 6% decline in the US/CAD exchange rate in the third quarter versus the second quarter and a 15% decline compared to the first quarter."

Revenues, net of pass-throughs, decreased by 14% to $5.0 million from $5.8 million in the second quarter. Operating expenses, excluding pass-throughs and a foreign currency translation loss of $1.2 million, decreased by 9% to $6.2 million from $6.8 million in the second quarter.

    
    -------------------------------------------------------------------------
    Revenues and Expenses
    -------------------------------------------------------------------------
    (in millions of dollars)
    (Unaudited)                                     Q309      Q209      Q109
    Revenue before pass-throughs                   $ 5.0     $ 5.8     $ 6.6
    Operating expenses before pass-throughs         (6.2)     (6.8)     (7.8)
    -------------------------------------------------------------------------
    

Total revenues for the third quarter, including pass-throughs on which the Company makes no margin, decreased 26% to $8.2 million versus $11.0 million in the same yearago period. Revenues, net of pass-throughs, decreased by 32% to $5.0 million from $7.3 million in the same year-ago period. The net loss was $2.4 million as compared to a net loss of $0.3 million same quarter last year. Excluding non-cash foreign exchange translations the net loss was $1.2 million as compared to a net gain of $0.1 million in the same quarter last year. Diluted loss per share for the third quarter was $(0.16) per share as compared to a loss of $(0.02) per share in the same year-ago period.

    
    -------------------------------------------------------------------------
    Financial Highlights             Three months ended    Nine months ended
     (in millions of dollars,            September 30,        September 30,
     except per share data)
     (unaudited)                     2009        2008      2009        2008
    -------------------------------------------------------------------------
    Revenue                       $   8.2    $   11.0   $  30.3     $  29.5
    Revenue before pass-throughs  $   5.0    $    7.3   $  17.4     $  21.4
    Net earnings (loss)           $  (2.4)   $   (0.3)  $  (5.6)* $   0.4
    Diluted earnings (loss)
     per share                    $ (0.16)   $  (0.02)  $ (0.38)    $  0.02
    -------------------------------------------------------------------------

    * Includes restructuring charges of $0.8 million
    

About Belzberg Technologies

Belzberg Technologies Inc. is a provider of trading technology and technology-based brokerage services for equities and options. Using Belzberg's suite of integrated trading tools and network connectivity, Belzberg's customers have direct access to all major North American markets. 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 thousands of Canadian dollars)
    -------------------------------------------------------------------------
                                                  September 30,  December 31,
                                                          2009          2008
                                                    (Unaudited)     (Audited)
                                                 --------------  ------------

    ASSETS

    CURRENT
      Cash and cash equivalents                      $  12,863     $  19,452
      Cash and cash equivalents segregated under
       regulations and other                             3,071           184
      Cash and cash equivalents on deposit with
       clearing and depository organizations             2,524         1,989
      Receivable from brokers, dealers and
       clearing organizations                            1,697         1,774
      Accounts receivable                                5,485         5,973
      Prepaid expenses and other receivables               750           534
      Other assets                                           -         1,565
      Income taxes receivable                               95            89
      Investment tax credits recoverable                    34            84
    -------------------------------------------------------------------------
                                                        26,519        31,644

    CAPITAL ASSETS                                       2,647         3,326

    INVESTMENT                                              30            38

    INVESTMENT TAX CREDITS RECOVERABLE                   1,621         1,580

    FUTURE INCOME TAX ASSETS                             4,854         3,289

    GOODWILL                                             1,608         1,608

    OTHER INTANGIBLE ASSETS, NET                           315           473
    -------------------------------------------------------------------------
                                                     $  37,594     $  41,958
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities       $   4,975     $   6,350
      Payable to customers and correspondents            2,449           183
      Payable to brokers, dealers and
       clearing organizations                                -           131
    -------------------------------------------------------------------------
                                                         7,424         6,664

    FUTURE INCOME TAX LIABILITIES                          513           244

    -------------------------------------------------------------------------
                                                         7,937         6,908
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    CAPITAL STOCK                                       23,898        23,930

    CONTRIBUTED SURPLUS                                  3,904         3,686

    RETAINED EARNINGS                                    1,855         7,434
    -------------------------------------------------------------------------
                                                        29,657        35,050
    -------------------------------------------------------------------------
                                                     $  37,594     $  41,958
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Operations and Retained Earnings
    (in thousands of Canadian dollars, except per share amounts)
    (Unaudited)
    -------------------------------------------------------------------------

                              Three months ended           Nine months ended
                                    September 30,               September 30,
                              2009          2008          2009          2008
                        -----------   -----------   -----------   -----------

    REVENUE
      Transaction fees:
        Equity order
         flow and
         clearing        $   4,147     $   4,543     $  16,679     $  11,479
        Options and
         futures
         contracts           2,437         4,253         8,623        11,541
    -------------------------------------------------------------------------
                             6,584         8,796        25,302        23,020

      Subscription fees      1,214         1,764         3,832         5,404

      Other revenue            363           403         1,135         1,103
    -------------------------------------------------------------------------
    TOTAL REVENUE            8,161        10,963        30,269        29,527
    -------------------------------------------------------------------------

    EXPENSES
      Exchange, clearing
       and brokerage fees    3,463         5,194        14,485        10,650
      Compensation and
       related benefits      3,026         3,161         9,943         8,892
      Telecommunication and
       datafeed services     1,815         1,721         5,932         4,937
      Administrative and
       other expenses          872         1,259         3,114         3,768
      Restructuring expenses     -             -           839             -
      Government assistance      -             -           (95)            -
      Amortization of capital
       assets                  522           469         1,579         1,397
      Amortization of
       intangible assets        55            53           165           138
      Foreign exchange (gain)
       loss                  1,200           (30)        1,732            87
    -------------------------------------------------------------------------
                            10,953        11,827        37,694        29,869
    -------------------------------------------------------------------------

    LOSS BEFORE THE
     UNDERNOTED             (2,792)         (864)       (7,425)         (342)

      Interest expense           4             3            22             3
      Interest income          (40)         (129)         (171)         (465)
    -------------------------------------------------------------------------
                               (36)         (126)         (149)         (462)
    -------------------------------------------------------------------------

    EARNINGS (LOSS) BEFORE
     INCOME TAXES           (2,756)         (738)       (7,276)          120

    PROVISION FOR (RECOVERY
     OF) INCOME TAXES
      Current                    -             2             -             9
      Future                  (406)         (418)       (1,697)         (257)
    -------------------------------------------------------------------------
                              (406)         (416)       (1,697)         (248)
    -------------------------------------------------------------------------

    NET EARNINGS (LOSS)     (2,350)         (322)       (5,579)          368

    RETAINED EARNINGS
     (DEFICIT), BEGINNING
     OF PERIOD               4,205         8,006         7,434        (8,684)

    REDUCTION OF STATED
     CAPITAL                     -             -             -        16,000
    -------------------------------------------------------------------------
    RETAINED EARNINGS, END
     OF PERIOD               1,855         7,684         1,855         7,684
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EARNINGS (LOSS) PER
     SHARE:
      Basic              $   (0.16)    $   (0.02)    $   (0.38)    $    0.02
      Diluted            $   (0.16)    $   (0.02)    $   (0.38)    $    0.02
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WEIGHTED AVERAGE
     NUMBER OF COMMON AND
     COMMON EQUIVALENT
     SHARES OUTSTANDING:
     (in thousands)
      Basic                 14,822        14,841        14,828        14,827
      Diluted               14,822        14,879        14,828        14,918
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Cash Flows
    (in thousands of Canadian dollars)
    (Unaudited)
    -------------------------------------------------------------------------
                              Three months ended           Nine months ended
                                    September 30,               September 30,
                              2009          2008          2009          2008
                        -----------   -----------   -----------   -----------

    CASH PROVIDED BY
     (USED FOR)

    OPERATING ACTIVITIES
      Net earnings
       (loss)            $  (2,350)    $    (322)    $  (5,579)    $     368
      Items not affecting
       cash
        Amortization of
         capital assets        522           469         1,579         1,397
        Amortization of
         intangible assets      55            53           165           138
        Unrealized foreign
         exchange loss
         (gain)                664          (219)        1,026          (358)
        Gain on sale of
         investment              -             -            (5)            -
        Stock-based
         compensation           75            42           218           120
        Future income taxes   (171)         (466)       (1,296)         (332)
      Changes in non-cash
       working capital
       items                 1,348        (3,095)         (745)       (2,074)
    -------------------------------------------------------------------------
                               143        (3,538)       (4,637)         (741)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of capital
       assets                  (58)         (736)         (900)       (1,978)
      Purchase of
       intangibles               -             -            (7)         (212)
      Purchase of investment     -             -            (2)            -
      Proceeds from sale of
       investment                -             -            15             -
    -------------------------------------------------------------------------
                               (58)         (736)         (894)       (2,190)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Repayment of
       obligations under
       capital lease             -             -             -           (27)
      Repurchase of common
       shares                  (22)          (33)          (32)         (306)
      Proceeds from the
       exercise of stock
       options                   -             -             -           364
    -------------------------------------------------------------------------
                               (22)          (33)          (32)           31
    -------------------------------------------------------------------------

    Effect of exchange rate
     changes on cash and
     cash equivalents         (664)          219        (1,026)          358
    NET INCREASE (DECREASE)
     IN CASH AND CASH
     EQUIVALENTS              (601)       (4,088)       (6,589)       (2,542)

    CASH AND CASH
     EQUIVALENTS,
     BEGINNING OF PERIOD    13,464        22,627        19,452        21,081
    -------------------------------------------------------------------------
    CASH AND CASH
     EQUIVALENTS,
     END OF PERIOD       $  12,863     $  18,539     $  12,863     $  18,539
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CASH AND CASH
     EQUIVALENTS:
      Cash               $   4,679     $   4,834     $   4,679     $   4,834
      Cash equivalents       8,184        13,705         8,184        13,705
    -------------------------------------------------------------------------
                         $  12,863     $  18,539     $  12,863     $  18,539
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL CASH
     FLOW INFORMATION
      Interest received  $      40     $     119     $     179     $     464
      Interest paid              4             3            22             3
      Income taxes paid          3            67            18           197
    

SOURCE BELZBERG TECHNOLOGIES INC.

For further information: For further information: Judith Robertson, President and Chief Executive Officer, Phone: (416) 360-1812, E-mail: investorinfo@belzberg.com

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BELZBERG TECHNOLOGIES INC.

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