Exhibit 1. Press Release
FOR IMMEDIATE RELEASE
Belzberg Technologies Reports Second Quarter Results
TORONTO, Aug. 9 /CNW/ - Belzberg Technologies Inc. today announced
revenues of $7.8 million for the second quarter of fiscal 2002 ending June 30th
- - an increase of over 21% from the same period a year ago, and an increase of
over 10% from the first quarter of the current year. For the six months ended
June 30th, revenues are up over 36% from the same period a year ago. The
Company's revenues are now annualized at a run rate of $31.3 million and
growing. This compares favorably to revenues of $24.4 million in fiscal 2001.
Earnings before interest, taxes, amortization and other non-recurring
items relating to the Philadelphia operation was positive $16,000, essentially
unchanged from the same period a year ago. This represents an improvement of
approximately $100,000 from the first quarter of the current fiscal year. Net
loss for the second quarter was $0.8 million, including $0.5 million of non-
cash amortization expenses and $0.2 million relating to foreign exchange losses
associated with the strengthening of the Canadian dollar against the US dollar
during the period. The Company's net loss per share in the quarter was $(0.07)
as compared to $(0.09) in the same period in 2001.
On June 14, 2002, the Company completed a private placement for net
cash proceeds of approximately $13.1 million. This increased the Company's cash
position and working capital to approximately $16 million at quarter end.
The Company derives its revenue from recurring, monthly transaction and
subscription fees. Barring any unforeseen, dramatic changes to financial
markets, the Company anticipates that its existing revenue base will remain
solid, and forthcoming new subscriptions and order routing contracts will add to
this recurring monthly revenue stream. This was validated in July, 2002, where
due to increased volatility in the markets in the month, the Company had record
revenues in the month of over $3.0 million.
Since revenues have now reached the point where they are carrying the
operations infrastructure of the Company, higher margins will be achieved on
future incremental revenue. In addition, the Company has begun implementing
alternative methods of processing order flow including changing the manner in
which the company pays for clearing transactions, the consolidation of broadband
suppliers and the consolidation of information publishing suppliers that will
improve margins on existing revenue. The full impact of these cost reduction
measures are expected to be realized upon in the fourth quarter of fiscal 2002
and continue into fiscal 2003.
About Belzberg Technologies Inc.
Belzberg Technologies provides the software and networks that enable
global, direct-access routing and execution of trades for financial institutions
in the United Sates, Canada and Europe. Using Belzberg's suite of integrated
trading tools and network connectivity options, Belzberg's customers have direct
access to all North American equities and options markets, as well as major
European stock exchanges. The firm's client-base includes over 110 leading U.S.
and international brokerage houses and financial institutions. Belzberg
Technologies is listed on the Toronto Stock Exchange (Ticker BLZ) - additional
information on the company is available at www.belzberg.com.
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 operations, markets, products, prices and other factors.
BELZBERG TECHNOLOGIES INC.
Consolidated Balance Sheets
(Unaudited)
(in Canadian dollars)
- --------------------------------------------------------------------------------
June 30, December 31,
2002 2001
---------- ------------
ASSETS
CURRENT
Cash and cash equivalents $ 16,408,503 $ 6,361,427
Accounts receivable 4,615,223 4,715,206
Government assistance receivable 218,646 --
Prepaid expenses and other receivables 852,133 970,681
- ---------------------------------------------------------------------------------------------
22,094,505 12,047,314
CAPITAL ASSETS 5,744,749 4,647,962
GOODWILL 755,239 755,239
- ---------------------------------------------------------------------------------------------
$ 28,594,493 $ 17,450,515
=============================================================================================
LIABILITIES
CURRENT
Accounts payable and accrued
liabilities $ 2,341,335 $ 1,961,393
Accrued restructuring charges 330,653 --
Consideration payable --
362,674
Deferred revenue 759,386 786,870
Bank loan 722,616 633,211
Current portion of obligations under
capital lease 1,738,654 1,390,296
- ---------------------------------------------------------------------------------------------
5,892,644 5,134,444
DEFERRED REVENUE -- 9,224
OBLIGATIONS UNDER CAPITAL LEASE 1,550,266 1,502,138
- ---------------------------------------------------------------------------------------------
7,442,910 6,645,806
- ---------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
CAPITAL STOCK 34,700,917 22,813,253
CONTRIBUTED SURPLUS 398,979 --
WARRANTS 2,573,085 1,782,900
DEFICIT (16,521,398) (13,791,444)
- ---------------------------------------------------------------------------------------------
21,151,583 10,804,709
- ---------------------------------------------------------------------------------------------
$ 28,594,493 $ 17,450,515
=============================================================================================
BELZBERG TECHNOLOGIES INC.
Consolidated Statements of Operations and Deficit
(Unaudited)
(in Canadian dollars)
Three months ended June 30, Six months ended June 30,
2002 2001 2002 2001
------------ ------------ ------------ ------------
REVENUE $ 7,817,447 $ 6,444,114 $ 14,919,048 $ 10,994,196
COST OF REVENUE 4,069,519 2,398,004 7,716,491 4,013,524
- ------------------------------------------------------------------------------------------------------------------------
GROSS MARGIN 3,747,928 4,046,110 7,202,557 6,980,672
- ------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Sales and marketing 1,083,035 1,214,583 1,972,161 2,344,890
Research and development 958,875 785,884 1,862,448 1,552,812
Government assistance (218,646) -- (218,646) --
Administration 1,908,468 2,030,086 3,652,396 3,021,678
Non-recurring Philadelphia expenses -- -- 302,053 --
- ------------------------------------------------------------------------------------------------------------------------
3,731,732 4,030,553 7,570,412 6,919,380
- ------------------------------------------------------------------------------------------------------------------------
OPERATING EARNINGS
(LOSS) FROM CONTINUING OPERATIONS
BEFORE UNDERNOTED ITEMS 16,196 15,557 (367,855) 61,292
Amortization 532,229 443,296 1,020,898 842,898
Interest expense 115,362 147,037 253,513 263,293
Restructuring charges -- --
842,620 --
Foreign exchange loss (gain) 237,050 190,489 243,309 (56,044)
Interest income (65,885) (90,893) (88,666) (189,278)
------------------------------------------------------------------------------------------------------------------------
LOSS FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES (802,560) (674,372)
(2,639,529) (799,577)
INCOME TAXES 23,853 -- 40,725 8,614
- ------------------------------------------------------------------------------------------------------------------------
LOSS FROM CONTINUING OPERATIONS (826,413) (674,372) (2,680,254) (808,191)
LOSS FROM DISCONTINUED OPERATIONS -- (281,752) -- (531,274)
- ------------------------------------------------------------------------------------------------------------------------
NET LOSS (826,413) (956,124) (2,680,254) (1,339,465)
DEFICIT, BEGINNING OF PERIOD (15,645,285) (9,850,627) (13,791,444) (9,075,468)
PREMIUM ON REPURCHASE
OF COMMON SHARES (49,700) (5,456) (49,700) (397,274)
- ------------------------------------------------------------------------------------------------------------------------
DEFICIT, END OF PERIOD $(16,521,398) $(10,812,207) $(16,521,398) $(10,812,207)
========================================================================================================================
LOSS PER SHARE FROM
CONTINUING OPERATIONS
Basic and diluted $ (0.07) $ (0.06) $ (0.24) $ (0.07)
========================================================================================================================
LOSS PER SHARE
Basic and diluted $ (0.07) $ (0.09) $ (0.24) $ (0.12)
========================================================================================================================
WEIGHTED AVERAGE NUMBER OF
OUTSTANDING COMMON SHARES 11,313,765 10,988,984 11,188,749 10,988,984
========================================================================================================================
BELZBERG TECHNOLOGIES INC.
Consolidated Statements of Cash Flows
(Unaudited)
(in Canadian dollars)
Three months ended June 30, Six months ended June 30,
2002 2001 2002 2001
------------ ------------ ------------ ------------
CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Loss from continuing
operations $ (826,413) $ (674,372) $ (2,680,254) $ (808,191)
Items not affecting cash
Amortization of capital assets 532,229 413,008 1,020,898 782,322
Amortization of goodwill -- 30,288 -- 60,576
Amortization of gain on
sale and leaseback
of capital assets (26,192) (26,292) (52,576) (50,670)
Compensation expense of
stock options granted to
consultants 3,875 -- 3,875 --
Changes in non-cash working
capital items (373,891) 900,461 796,801 415,776
- ---------------------------------------------------------------------------------------------------------------------
(690,392) 643,093 (911,256) 399,813
- ---------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Payment of consideration
due for acquisition
of Robert C. Sheehan & Associates, Inc. -- -- (362,674) --
Net cash acquired from the acquisition
of Robert C. Sheehan & Associates, Inc. -- 670,064 -- 670,064
Purchase of capital assets (425,857) (822,180) (984,759) (930,389)
- ---------------------------------------------------------------------------------------------------------------------
(425,857) (152,116) (1,347,433) (260,325)
- ---------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Repayment of obligations
under capital lease (413,919) (266,219) (779,768) (509,455)
Proceeds from bank loan -- -- 255,558 --
Repayment of bank loan (83,245) -- (166,153) --
Net proceeds from issuance
of common shares 12,254,853 -- 12,254,853 4,698,991
Proceeds on issuance of
warrants 847,626 -- 847,626 --
Proceeds from the exercise
of stock options -- -- -- 20,000
Repurchase of common shares (106,351) (7,733) (106,351) (483,157)
- ---------------------------------------------------------------------------------------------------------------------
12,498,964 (273,952) 12,305,765 3,726,379
- ---------------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH FROM
CONTINUING OPERATIONS 11,382,715 217,025 10,047,076 3,865,867
NET CASH USED BY DISCONTINUED
OPERATIONS -- (257,039) -- (437,638)
- ---------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 11,382,715 (40,014) 10,047,076 3,428,229
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 5,025,788 9,110,167 6,361,427 5,641,924
- ---------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 16,408,503 $ 9,070,153 $ 16,408,503 $ 9,070,153
=====================================================================================================================
CASH AND CASH EQUIVALENTS:
Cash $ 5,949,784 $ 3,659,516 $ 5,949,784 $ 3,659,516
Short-term investments 10,458,719 5,410,637 10,458,719 5,410,637
- ---------------------------------------------------------------------------------------------------------------------
$ 16,408,503 $ 9,070,153 $ 16,408,503 $ 9,070,153
=====================================================================================================================
SUPPLEMENTAL CASH FLOW
INFORMATION
Value of share capital recorded
for compensation expense $ -- $ 28,470 $ -- $ 56,940
Value of compensation options
issued on private placement $ 310,539 $ -- $ 310,539 $ --
Acquisition of capital assets
with debt $ 953,880 $ 154,871 $ 1,132,926 $ 392,781
Interest paid $ 115,363 $ 147,037 $ 253,514 $ 263,293
Income taxes paid $ 889 $ -- $ 17,761 $ 8,614
Belzberg Contact:
Donald Wilson, Chief Operating Officer
Phone: (416) 360-1812
E-mail: dwilson@belzberg.com