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Frontline Reports Second Quarter 2011 Financial Results
Aug 11, 2011 (07:08 PM EDT)


TORONTO, Aug. 11, 2011 /PRNewswire/ - Frontline Technologies Inc. (TSX:FLC), a provider of technology-based equity and options trading services, IT infrastructure support and network managed services, released its second quarter results for the quarter ended June 30, 2011, the second set of consolidated financial statements prepared under International Financial Reporting Standards (IFRS).  The net loss was $2.3 million compared to a net loss of $1.2 million in the same quarter of the previous year.  Included in the $2.3 million loss are restructuring and acquisition costs of $0.7 million related to severances and legal fees incurred during the quarter.

 Major elements of the second quarter statements include:

  • Revenue increased by 38% to $1.9 million for the second quarter of 2011 from the same year-ago quarter as a result of the acquisition of Frontline Technologies Corporation.
  • Operating expenses in continuing operations increased 45% or $1.2 million for the second quarter of 2011 from the same year-ago quarter as a result of the acquisition of Frontline Technologies Corporation which accounted for $1.0 million of the increase and a further $0.4 million was due to restructuring and acquisition costs.
  • Net loss before foreign exchange, acquisition and restructuring expenses for the three months ended June 30, 2011 decreased $0.1 million to $1.5 million from $1.6 million as compared to the same year-ago quarter.
  • Working capital position of $4.4 million at June 30, 2011 as compared to $10.3 million at December 31, 2010.
  • Completion of the acquisition of Frontline Technologies Corporation for $3.9 million in cash and Class A restricted shares.

"We are excited by the integration of the two companies as it is allowing us to rationalize costs while strengthening our product suite and improving service delivery for clients" said Hoss Astaraki, Chairman and CEO.

         
Financial Highlights   Three months ended   Six months ended
(in millions of dollars, except per share data)   June 30,   June 30,
(Three and six month periods unaudited) (note 1)   2011 2010   2011 2010
Revenue    $ 1.9  $ 1.4    $ 3.2  $ 2.8
Operating expenses    $ 4.0  $ 2.7    $ 7.0  $ 6.0
Loss from continuing operations     $ (2.1)  $ (1.3)    $ (3.9)  $ (3.2)
Net loss    $ (2.3)  $ (1.2)    $ (4.3)  $ (3.5)
Basic and diluted loss per share    $ (0.11)  $ (0.08)    $ (0.24)  $ (0.23)
Note 1 The financial statements for the period ended June 30, 2011 have been prepared in accordance with International Financial Reporting Standards ("IFRS"). The company adopted IFRS as at January 1, 2011 with a transition date of January 1, 2010. The comparative figures for 2010 have been restated to comply with IFRS and are presented accordingly.

About Frontline Technologies

Frontline Technologies Inc. is a provider of trading technology services for equities and options and also offers IT infrastructure support and network managed services.  Frontline Technologies is listed on the Toronto Stock Exchange (Ticker-FLC) - additional information is available at www.belzberg.com / www.frontline.ca.

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.

FRONTLINE TECHNOLOGIES INC.
(FORMERLY BELZBERG TECHNOLOGIES INC.)
Condensed Interim Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
(Not audited or reviewed by the Company's external auditor)
         
      June 30,   December 31,
      2011   2010
           
ASSETS          
           
Current assets:          
  Cash and cash equivalents    $  3,908  $   8,319
  Cash and cash equivalents segregated under regulations and other     2,143
  Cash and cash equivalents on deposit with clearing and depository organizations      1,630
  Receivable from brokers, dealers and clearing organizations     168
  Accounts receivable   1,142   1,718
  Prepaid expenses and other receivables    206   346
  Securities borrowed     6,186
  Assets held for sale   2,835  
    8,091   20,510
Equipment     1,326   1,075
Investments       30
Long-term investment tax credits recoverable      
Goodwill and intangible assets     5,993   77
Total assets     $ 15,410 $ 21,692
         
LIABILITIES          
         
Current liabilities:          
  Bank indebtedness   $  167
  Accounts payable and accrued liabilities    1,702   2,336
  Payable to customers     1,733
  Deferred revenue   188  
  Securities loaned     6,186
  Current portion of long-term debt   480  
  Current portion of obligations under finance leases   100  
  Liabilities held for sale   1,013  
    3,650   10,255
Non-current liabilities:          
  Long-term debt   1,400  
  Obligations under finance leases   116  
  Deferred revenue   23  
  Future income taxes   432  
Total liabilities     5,621   10,255
         
SHAREHOLDERS' EQUITY          
         
Share capital     2   23,612
Contributed surplus     4,575   4,570
Retained earnings (deficit)     5,964   (16,220)
Foreign currency translation reserve     (752)   (525)
Total shareholder's equity     9,789   11,437
Total liabilities and shareholder's equity     $ 15,410 $ 21,692

 
 
FRONTLINE TECHNOLOGIES INC.              
(FORMERLY BELZBERG TECHNOLOGIES INC.)              
Condensed Interim Consolidated Statements of Comprehensive Income (Loss)              
(In thousands of Canadian dollars, except per share amounts)              
(Not audited or reviewed by the Company's external auditor)              
    Three months ended       Six months ended  
    June 30,       June 30,  
  2011   2010     2011     2010
               
Revenue 1,904   $   1,383   $   3,156   $   2,799
               
Operating expenses:              
  Compensation and related benefits   1,662   781   2,584   1,965
  Telecommunication and data-feed services   1,257   1,007   2,208   2,112
  Administrative and other   1,053   943   2,237   1,945
  3,972   2,731   7,029   6,022
               
Loss before the undernoted   (2,068)   (1,348)   (3,873)   (3,223)
               
Foreign exchange loss (gain)   23   (156)   55   52
Interest expense   4     5   1
Interest income         (2)
  27   (156)   60   51
               
Loss before discontinued operations   (2,095)   (1,192)   (3,933)   (3,274)
             
Loss from discontinued operations   (207)   (2)   (409)   (192)
               
Loss for the period   (2,302)   (1,194)   (4,342)   (3,466)
             
Other comprehensive income (loss):                
  Change in accumulated foreign currency                
  translation adjustment:                
  Current operations 44   (490)   (902)   (206)
  Discontinued operations (36)   942   675   107
  8   452   (227)   (99)
               
Total comprehensive loss   (2,294)   (742)   (4,569)   (3,565)
               
Loss per share:                
  Loss from continuing operations per common and                
  Restricted Class A share - basic and diluted   (0.10)   (0.08)   (0.22)   (0.22)
  Loss per common and Restricted Class A                
  share - basic and diluted   (0.11)   (0.08)   (0.24)   (0.23)
               
               
Weighted average number of common and Restricted
Class A shares outstanding (in thousands)
21,394  
 
 
14,638
 
 
 
18,035
 
 
 
14,676
                 
           

 
FRONTLINE TECHNOLOGIES INC.              
(FORMERLY BELZBERG TECHNOLOGIES INC.)              
Condensed Interim Consolidated Statements of Cash Flows              
(In thousands of Canadian dollars)              
(Not audited or reviewed by the Company's external auditor)              
    Three months ended       Six months ended  
    June 30,       June 30,  
  2011   2010   2011   2010
Cash provided by (used in):              
               
Operating activities:              
  Loss for the period   (2,302)   (1,194) (4,342)   (3,466)
  Loss from discontinued operations   (207)   (2) (409)   (192)
  Loss from continuing operations   (2,095) (1,192) (3,933)   (3,274)
               
  Adjusted for:              
    Depreciation of property and equipment 324 327 530   680
    Amortization of intangible assets 85 23 89   46
    Unrealized foreign exchange (gain) loss (401) 916 (620)   623
    Interest expense 4 5   1
    Interest income - -   (2)
    Stock-based compensation 5   76 29 169
  Changes in non-cash working capital items 288   (954) 552   (1,379)
  Interest paid (4)   - (5)   (1)
  Interest received -   -   -   2
    (1,794)   (804)   (3,353)   (3,135)
                   
Financing activities:                
  Increase in bank indebtedness 17   -   17   -
  Payment of obligations under finance leases (56)   - (56)   -
  Issuance of Class A restricted shares 2,916   -   2,916   -
  Repurchase of common shares -   -   -   (67)
  2,877   -   2,877   (67)
                 
Investing activities:              
  Business acquisition   (3,916)   -   (3,916)   -
  Purchase of equipment (33)   (283)   (260)   (371)
  (3,949)   (283)   (4,176)   (371)
                 
Net decrease in cash and cash equivalents from continuing operations (2,866)   (1,087)   (4,652)   (3,573)
               
Net decrease in cash and cash equivalents from discontinued operations 292   852   241   (1,535)
               
Net change in cash and cash equivalents (2,574)   (235)   (4,411)   (5,108)
               
Cash and cash equivalents, beginning of period 6,482   10,797   8,319   15,670
               
Cash and cash equivalents, end of period 3,908   10,562   3,908   10,562

 

 

SOURCE Frontline Technologies Inc.