Northcore Reports Second Quarter 2007 Results



    (TSX: NTI; OTCBB: NTLNF)

    TORONTO, Aug. 14 /CNW/ - Northcore Technologies Inc. (TSX: NTI;
OTCBB:NTLNF), a global provider of core asset solutions, announced today its
interim financial results for the second quarter ended June 30, 2007. All
figures are in Canadian dollars.
    Northcore reported consolidated second quarter revenues of $285,000, a
decrease of 11 percent from the $322,000 the company generated in the first
quarter of 2007, and an improvement of 68 percent over the $170,000 that
company produced in Q2 of 2006. Northcore derives its revenues through fees
from application hosting activities provided to customers, the sale of
software licenses, and the delivery of application development, software
customization and other technology services.
    "Despite a six percent revenue increase in our North America business
unit over Q1 results, I'm disappointed with our overall performance in Q2,
which was hurt by the strengthening Canadian dollar and a decline in royalty
fee payments from our relationship with ADB Systemer," said Duncan Copeland,
CEO of Northcore Technologies. "The North America revenue growth was driven
from the services component of our offerings. These application development
and software customization projects provide a steadily growing revenue stream
and continued strengthening of our relationships with key customers such as
GE. Our focus, however, needs to be on product sales."
    As was announced recently, Duncan Copeland was named Chief Executive
Officer of Northcore Technologies effective July 12, 2007. As part of the same
management restructuring, James Moskos was appointed Chief Operating Officer.
    "Jim Moskos and his team have built a proven set of tools for buying,
selling and managing industrial assets that have allowed Northcore to build a
trusted relationship with GE," said Mr. Copeland. "And as the importance of
corporate infrastructure quickly ascends to the forefront of senior management
attention everywhere, I'm confident that our strengths in asset optimization
and helping our customers control their infrastructure will meet this need."
    Northcore reported a net loss for the second quarter of $590,000 or $0.01
per share, basic and diluted. This compares to a net loss of $550,000 or $0.01
per share, basic and diluted, in the first quarter of 2007. In the second
quarter of 2006, Northcore reported a net gain of $1.04 million or $0.01 per
share basic and diluted. This total included income from discontinued
operations of $1.92 million, resulting from the sale of the company's Norway
business unit. As has been reported previously, the company sold its Norway
business unit for $2.69 million in cash and debt settlement effective June 30,
2006.
    Northcore also reported an EBITDA loss in the second quarter of 2007 of
$419,000. This compares to an EBITDA loss of $368,000 in the first quarter of
2007 and an EBITDA loss of $607,000 in the second quarter of 2006.
    EBITDA loss is defined as losses before interest, taxes, depreciation,
amortization, employee stock options, and discontinued operations. Northcore
considers EBITDA to be a meaningful performance measure as it provides an
approximation of operating cash flows.
    As at June 30, Northcore held cash and cash equivalents of $44,000, and
accounts receivable of approximately $237,000.
    Subsequent to the close of the second quarter, Northcore announced that
it will raise working capital through a rights offering to all eligible
shareholders of the company's common stock. The rights offering expires at
4:00 p.m. Eastern time on August 22, 2007.

    
    Operating highlights

    Northcore completed the following customer and operating activities in the
period:
     -  Northcore's joint venture with GE successfully conducted a sales and
        marketing event for a major transportation equipment leasing company.
     -  Northcore's joint venture with GE signed a memorandum of
        understanding with a Fortune 500 organization to provide asset
        disposition services that will facilitate the sale and marketing of
        third-party owned equipment.
     -  The company signed a three-year application hosting agreement with a
        leading Fortune 500 company to provide web-based capabilities for
        asset disposition, asset tracking and asset appraisal.
     -  The company completed a private placement, issuing a new Series K
        subordinated notes with a face amount of $1.36 million to existing
        holders of Series G notes. In addition, Northcore completed a private
        placement issuance of 2.99 million common shares in consideration of
        the $449,000 Series G accrued debt interest.
     -  The company received operating loans from a private investor in the
        amount of $280,000.
    

    Outlook

    "I'm very excited about our future. The recent management changes provide
us an opportunity to better focus our strategic direction," said Mr. Copeland.
"The core of our activities will continue to be devoted to supporting our
joint venture with GE, combined with an increased effort on product sales and
a further expansion of our services revenues on a stable expense base. As a
result, we can expect improved financial and operational results in the
periods to come."

    Northcore will hold a conference call at 10:00 a.m. (Eastern time) on
Wednesday, August 15 to discuss its financial results and review operational
activities. Investors and followers of the company can listen to a live
broadcast of the call from the investor relations section of the company's
website, www.northcore.com.

    About Northcore Technologies Inc.
    ----------------------------------
    Northcore Technologies provides core asset solutions that help
organizations source, manage and sell their capital equipment. Northcore works
with a growing number of customers and partners in a variety of sectors
including oil and gas, government, and financial services. Current customers
include GE Commercial Finance, Paramount Resources and Trilogy Energy Trust.
    Northcore owns a 50 percent interest in GE Asset Manager, a joint
business venture with GE.

    This news release may include comments that do not refer strictly to
historical results or actions and may be deemed to be forward-looking within
the meaning of the Safe Harbor provisions of the U.S. federal securities laws.
These include, among others, statements about expectations of future revenues,
cash flows, and cash requirements. Forward-looking statements are subject to
risks and uncertainties that may cause Northcore's ("the Company") results to
differ materially from expectations. These risks include the Company's ability
to raise additional funding, develop its business-to-business sales and
operations, develop appropriate strategic alliances and successful development
and implementation of technology, acceptance of the Company's products and
services, competitive factors, new products and technological changes, and
other such risks as the Company may identify and discuss from time to time,
including those risks disclosed in the Company's Form 20-F filed with the
Securities and Exchange Commission. Accordingly, there is no certainty that
the Company's plans will be achieved.

    
                         (financial results follow)




                         Northcore Technologies Inc.
                         Consolidated Balance Sheet
                 (expressed in thousands of Canadian dollars)
                         (Canadian GAAP, Unaudited)
    -------------------------------------------------------------------------

                                         ------------------------------------
                                          June 30      June 30    December 31
                                            2007         2007         2006
                                         ------------------------------------
                                        (Unaudited)  (Unaudited)    (Audited)
                                                       (in US$)

                                                      translated
                                                     into US$ at
                                                     Cdn$ 1.0634
                                                         for
                                                     convenience

                                         ------------------------------------
    Cash                                 $      44    $      41    $     475
    Other current assets                       296          278          217
    Other assets                                70           66          121
                                         ------------------------------------
      Total assets                       $     410    $     385    $     813
                                         ------------------------------------
                                         ------------------------------------

    Accounts payable and accrued
     liabilities                         $     745    $     701    $   1,074
    Deferred revenue                           161          151           68
    Demand loans                               602          566            -
    Current portion of secured
     subordinated notes                        160          150        1,682
    Non-current portion of secured
     subordinated notes                        943          887          244
    Total shareholders' deficiency          (2,201)      (2,070)      (2,255)
                                         ------------------------------------
      Total liabilities and
       shareholders' deficiency           $    410    $     385    $     813
                                         ------------------------------------
                                         ------------------------------------



                         Northcore Technologies Inc.
                    Consolidated Statements of Operations
        (expressed in thousands of dollars, except per share amounts)
                         (Canadian GAAP, Unaudited)

                   ----------------------------  ----------------------------
                        Three Months Ended             Six Months Ended
                   ----------------------------  ----------------------------
                             June 30                       June 30
                   ----------------------------  ----------------------------
                     2007      2007      2006      2007      2007      2006
                     ($C)      ($US)     ($C)      ($C)      ($US)     ($C)
                   ----------------------------  ----------------------------

                             translated                    translated
                            into US$ at                   into US$ at
                            Cdn$ 1.0634                   Cdn$ 1.0634
                                for                           for
                            convenience                   convenience

    Revenue        $   285   $   268   $   170   $   607   $   571   $   541
                   ----------------------------  ----------------------------

    Operating
     expenses
      General and
       administrative  448       421       498       895       842       940
      Customer
       service and
       technology      178       168       159       350       329       325
      Sales and
       marketing
       costs            78        73       120       149       140       256
      Employee stock
       options           6         6        37        13        12        72
      Depreciation
       and
       amortization     10         9        20        19        18        45
                   ----------------------------  ----------------------------
        Total
         operating
         expenses      720       677       834     1,426     1,341     1,638
                   ----------------------------  ----------------------------

    Loss from
     operations       (435)     (409)     (664)     (819)     (770)   (1,097)
                   ----------------------------  ----------------------------

    Interest expense
      Cash interest
       expense          67        63        93       131       123       200
      Accretion of
       secured
       subordinated
       notes            88        83       123       191       180       268
    Interest income      -         -        (5)       (1)       (1)       (5)
                   ----------------------------  ----------------------------
                       155       146       211       321       302       463
                   ----------------------------  ----------------------------

    Loss from
     continuing
     operations       (590)     (555)     (875)   (1,140)   (1,072)   (1,560)
    Income from
     discontinued
     operations          -         -     1,918         -         -     2,123
                   ----------------------------  ----------------------------
    Net income
     (loss) for the
     period           (590)     (555)    1,043    (1,140)   (1,072)      563
                   ----------------------------  ----------------------------
                   ----------------------------  ----------------------------

    Other
     comprehensive
     income, net
     of tax:
      Foreign
       currency
       translation
       adjustment        -         -         -         -         -       17
                   ----------------------------  ----------------------------
    Comprehensive
     income
     (loss)        $  (590)  $  (555)  $ 1,043   $(1,140)  $(1,072)  $  580
                   ----------------------------  ----------------------------
                   ----------------------------  ----------------------------

    Earnings (loss)
     per share:
      From
       continuing
       operations,
       basic and
       diluted     $ (0.01) $  (0.01)  $ (0.01)  $ (0.01)  $ (0.01)  $ (0.02)
      Net earnings
      (loss) per
      share, basic
      and diluted  $ (0.01) $  (0.01)  $  0.01   $ (0.01)  $ (0.01)  $  0.01
                   ----------------------------  ----------------------------
                   ----------------------------  ----------------------------

    Weighted
     average
     common shares  84,397    84,397    79,212    84,117    84,117    76,724
                   ----------------------------  ----------------------------
    

    %SEDAR: 00019461E




For further information:

For further information: At Northcore Technologies Inc., Joe Racanelli,
Tel: (416) 640-0400 ext. 273, Fax: (416) 640-0412, E-mail:
jracanelli@northcore.com

Organization Profile

NORTHCORE TECHNOLOGIES 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