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Belzberg Reports Fourth Quarter and Annual 2009 Financial Results
Mar 16, 2010 (05:03 PM EDT)


TORONTO, March 16 /PRNewswire-FirstCall/ - Belzberg Technologies Inc. (TSX -BLZ), a provider of technology-based equity and options trading services, announced today its financial results for the three and twelve months ended December 31, 2009.

"Belzberg's disappointing financial performance in 2009 reflects the difficult market conditions," said Judith Robertson, President and CEO. "Despite the important operational improvements to our products and service, we were not able to compensate for the revenue lost through lower volumes, price compression and competition. Our success in reducing operating costs was helpful, but was not sufficient on its own to return the Company to profitability."

Major elements of the fourth quarter statements include:

    -   Unusual expense items of approximately $1.1M relating to the
        Company's announced restructuring and strategic initiatives.
    -   Non-cash charges of approximately $7.8M related to write-downs of
        intangible assets and tax losses and foreign exchange translation
        loss.

"Management is aggressively pursuing strategies to improve the Company's financial performance," said Judith Robertson, President and CEO. "Our recently announced reorganization will eliminate a further $1.4M in annual costs and better position the organization. In addition, we continue to seek scale through partnerships and combinations."

Other elements of the reorganization include:

    -   Elimination of 20 positions (19% of workforce) since the 3rd quarter
        2009.
    -   Salary freezes for employees and rationalization and salary
        reductions for senior management.
    -   Hiring of Andrew Brenner to lead our US sales efforts.

Total revenues for the fourth quarter decreased 35% to $7.9 million versus $12.2 million in the same year-ago period. Net revenues for the fourth quarter decreased 36% to $5.0 million versus $7.9 million in the same year-ago period. The net loss for the fourth quarter was $10.9 million (including unusual non-cash charges of $7.5 million and restructuring charges of $0.8 million) as compared to a net loss of $0.3 million (including restructuring charges of $1.0 million and a future tax recovery of $0.7 million) same quarter last year. Diluted loss per share for the fourth quarter was $(0.74) including $(0.56) related to restructuring and unusual non-cash charges. This compared to a loss of $(0.02) per share including restructuring and non-cash charges of ($0.03) in the same year-ago period.

    -------------------------------------------------------------------------
    Financial Highlights
    (in millions of dollars,       Three months ended    Twelve months ended
     except per share data)           December 31,            December 31,
    (Three month periods unaudited)  2009        2008      2009         2008
    -------------------------------------------------------------------------

    Total revenue                 $   7.9     $  12.2   $  38.2      $  41.8

    Net revenue                   $   5.0     $   7.9   $  23.1      $  30.3

    Net earnings (loss)           $ (10.9)    $  (0.3)  $ (16.5)     $   0.1

    Net earnings (loss) before
     restructuring and unusual
     non-cash charges             $  (2.6)    $   0.1   $  (9.0)     $   0.2

    Diluted earnings (loss)
     per share                    $ (0.74)    $ (0.02)  $ (1.11)     $  0.01

    Diluted earnings (loss)
     per share before
     restructuring and unusual
     non-cash charges             $ (0.17)    $  0.01   $ (0.61)     $  0.02
    -------------------------------------------------------------------------

The Company's financial position included cash and cash equivalents of $15.7 million and working capital of $16.2 million at December 31, 2009.

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.

    BELZBERG TECHNOLOGIES INC.
    Consolidated Balance Sheets
    (in thousands of Canadian dollars)
    -------------------------------------------------------------------------

                                                    December 31, December 31,
                                                           2009         2008
                                                       (Audited)    (Audited)
                                                    ------------ ------------

    ASSETS

    CURRENT
      Cash and cash equivalents                       $  15,670    $  19,452
      Cash and cash equivalents segregated under
       regulations and other                              2,805          184
      Cash and cash equivalents on deposit with
       clearing and depository organizations              1,363        1,989
      Receivable from brokers, dealers and
       clearing organizations                               947        1,774
      Accounts receivable                                 2,405        5,973
      Prepaid expenses and other receivables                468          534
      Other assets                                            -        1,565
      Income taxes receivable                                12           89
      Investment tax credits recoverable                      -           84
    -------------------------------------------------------------------------
                                                         23,670       31,644

    CAPITAL ASSETS                                        2,233        3,326

    INVESTMENT                                               30           38

    INVESTMENT TAX CREDITS RECOVERABLE                      147        1,580

    FUTURE INCOME TAX ASSETS                                  -        3,289

    GOODWILL                                                  -        1,608

    OTHER INTANGIBLE ASSETS, NET                            141          473
    -------------------------------------------------------------------------
                                                      $  26,221    $  41,958
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued liabilities        $   5,176    $   6,350
      Payable to customers and correspondents             1,948          183
      Payable to brokers, dealers and
       clearing organizations                               345          131
    -------------------------------------------------------------------------
                                                          7,469        6,664

    FUTURE INCOME TAX LIABILITIES                             -          244

    -------------------------------------------------------------------------
                                                          7,469        6,908
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    CAPITAL STOCK                                        23,754       23,930

    CONTRIBUTED SURPLUS                                   4,044        3,686

    RETAINED EARNINGS (DEFICIT)                          (9,046)       7,434
    -------------------------------------------------------------------------
                                                         18,752       35,050
    -------------------------------------------------------------------------
                                                      $  26,221    $  41,958
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Operations and Retained Earnings (Deficit)
    (in thousands of Canadian dollars, except per share amounts)
    (Three month periods unaudited)
    -------------------------------------------------------------------------

                              Three months ended         Twelve months ended
                                     December 31,                December 31,
                              2009          2008          2009          2008
                           -----------  -----------  -----------  -----------
    REVENUE

      Equity order flow
       and clearing         $   4,353    $   6,463   $   21,032   $   17,942
      Options and futures
       contracts                2,192        3,679       10,815       15,220
      Subscription fees         1,075        1,683        4,907        7,087
      Other revenue               322          409        1,457        1,512
    -------------------------------------------------------------------------
                                7,942       12,234       38,211       41,761
      Cost of exchange and
       clearance fees          (2,916)      (4,383)     (15,097)     (11,496)
    -------------------------------------------------------------------------
    TOTAL NET REVENUE           5,026        7,851       23,114       30,265
    -------------------------------------------------------------------------

    EXPENSES
      Compensation and
       related benefits         2,881        3,610       12,824       12,502
      Telecommunication
       and datafeed services    1,842        2,051        7,774        6,988
      Administrative and
       other expenses           1,121        1,511        4,235        5,279
      Brokerage fees              840          988        3,144        4,525
      Amortization of
       capital assets             463          507        2,042        1,904
      Amortization of
       intangible assets           37           60          202          198
    -------------------------------------------------------------------------
                                7,184        8,727       30,221       31,396
    -------------------------------------------------------------------------

    LOSS BEFORE THE UNDERNOTED (2,158)        (876)      (7,107)      (1,131)

      Restructuring expenses      819        1,052        1,658        1,052
      Government assistance     1,390          (60)       1,295          (60)
      Impairment of goodwill
       and intangible assets    1,745            -        1,745            -
      Foreign exchange (gain)
       loss                       355         (814)       2,087         (727)
      Interest expense              3            1           25            4
      Interest income             (22)        (117)        (193)        (582)
    -------------------------------------------------------------------------
                                4,290           62        6,617         (313)
    -------------------------------------------------------------------------

    LOSS BEFORE INCOME TAXES   (6,448)        (938)     (13,724)        (818)

    PROVISION FOR (RECOVERY OF)
     INCOME TAXES
      Current                     149           (9)         149            -
      Future                    4,304         (679)       2,607         (936)
    -------------------------------------------------------------------------
                                4,453         (688)       2,756         (936)
    -------------------------------------------------------------------------

    NET EARNINGS (LOSS)       (10,901)        (250)     (16,480)         118

    RETAINED EARNINGS
     (DEFICIT), BEGINNING OF
     PERIOD                     1,855        7,684        7,434       (8,684)

    REDUCTION OF STATED
     CAPITAL                        -            -            -       16,000

    -------------------------------------------------------------------------
    RETAINED EARNINGS
     (DEFICIT), END OF PERIOD  (9,046)       7,434       (9,046)       7,434
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EARNINGS (LOSS) PER
     SHARE:
      Basic                 $   (0.74)   $   (0.02)   $   (1.11)   $    0.01
      Diluted               $   (0.74)   $   (0.02)   $   (1.11)   $    0.01
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WEIGHTED AVERAGE NUMBER
     OF COMMON AND COMMON
     EQUIVALENT SHARES
     OUTSTANDING
    (in thousands)
      Basic                    14,797       14,835       14,820       14,829
      Diluted                  14,797       14,835       14,820       14,879
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    BELZBERG TECHNOLOGIES INC.
    Consolidated Statements of Cash Flows
    (in thousands of Canadian dollars)
    (Three month periods unaudited)
    -------------------------------------------------------------------------
                                Three months ended       Twelve months ended
                                       December 31,              December 31,
                                 2009          2008        2009         2008
                           -----------  -----------  -----------  -----------

    CASH PROVIDED BY
     (USED FOR)

    OPERATING ACTIVITIES

      Net earnings (loss)   $ (10,901)   $    (250)   $ (16,480)   $     118
      Items not affecting
       cash
        Amortization of
         capital assets           463          507        2,042        1,904
        Amortization of
         intangible assets         37           60          202          198
        Impairment of
         goodwill and
         intangible assets      1,745            -        1,745            -
        Unrealized foreign
         exchange loss (gain)     177         (764)       1,628       (1,413)
        Gain on sale of
         investment                 -            -           (5)           -
        Stock-based
         compensation              61          163          279          283
        Future income taxes     4,341         (894)       3,045       (1,226)
      Changes in non-cash
       working capital items    7,175        1,843        6,430         (231)
    -------------------------------------------------------------------------
                                3,098          665       (1,114)        (367)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of capital
       assets                     (49)        (495)        (949)      (2,473)
      Purchase of intangibles       -            -           (7)        (212)
      Purchase of investment        -            -           (2)           -
      Contribution for
       interest in a joint
       venture                      -          (21)           -          (21)
      Proceeds from sale of
       investment                   -            -           15            -
    -------------------------------------------------------------------------
                                  (49)        (516)        (943)      (2,706)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Repayment of obligations
       under capital lease          -            -            -          (27)
      Repurchase of common
       shares                     (65)           -          (97)        (306)
      Proceeds from the
       exercise of stock
       options                      -            -            -          364
    -------------------------------------------------------------------------
                                  (65)           -          (97)          31
    -------------------------------------------------------------------------

    Effect of exchange rate
     changes on cash and
     cash equivalents            (177)         764       (1,628)       1,413

    NET INCREASE (DECREASE)
     IN CASH AND CASH
     EQUIVALENTS                2,807          913       (3,782)      (1,629)

    CASH AND CASH
     EQUIVALENTS,
     BEGINNING OF PERIOD       12,863       18,539       19,452       21,081
    -------------------------------------------------------------------------
    CASH AND CASH
     EQUIVALENTS, END
     OF PERIOD              $  15,670    $  19,452    $  15,670    $  19,452
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CASH AND CASH
     EQUIVALENTS:
      Cash                  $   3,795    $   2,703    $   3,795    $   2,703
      Cash equivalents         11,875       16,749       11,875       16,749
    -------------------------------------------------------------------------
                            $  15,670    $  19,452    $  15,670    $  19,452
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL CASH
     FLOW INFORMATION
      Interest received     $      23    $     169    $     202    $     633
      Interest paid                 3            1           25            4
      Income taxes paid            72           22           90          219

SOURCE Belzberg Technologies Inc.