Belzberg Technologies (TSX -BLZ), a provider of technology-based equity and options trading services, announced today that in the third quarter ended September 30, 2007 net earnings were $1.8 million inclusive of a $0.2 million foreign exchange loss as compared to $1.5 million same quarter last year.
Total revenue for the third quarter increased 10% to $9.7 million versus $8.8 million in the same year-ago period. On a sequential quarter basis total revenue growth was adversely impacted by $1.1 million from lower pass-through revenue that has no impact on the Company's profitability and by $0.3 million from a strengthening Canadian dollar.
Diluted earnings per share for the third quarter were $0.12 per share as compared to $0.10 per share in the same year-ago period.
"The third quarter results were solid in a seasonally slow period. Unusual volatility in August created a record month for the Company that was followed by an industry wide slow down in September. Overall, the third quarter was strong with continuing strength in October from renewed market volatility. We have completed the installation, deployment and testing of our back office clearing infrastructure and software at the end of the third quarter. The first clearing customers have been signed up and represent an important growth opportunity for the Company," stated Sid Belzberg, Chief Executive Officer of Belzberg Technologies.
The Company strengthened its financial position with cash and cash equivalents of $19.6 million and working capital of $27.6 million at September 30, 2007, up from cash and cash equivalents of $18.1 million and working capital of $25.4 million at June 30, 2007.
Total revenue of option contracts traded both electronically and non-electronically was $4.1 million in the third quarter of 2007 compared to $2.9 million in the same year-ago quarter. On a sequential quarter basis option pass-through revenue decreased by approximately $0.4 million and a strengthening Canadian dollar impacted option revenue by approximately $0.2 million.
Average total daily volume of equity and index options contracts traded both electronically and non-electronically on the floor of the CBOE and on other exchanges were 280,000 contracts per day in the third quarter of 2007 compared to 230,000 contracts per day in the same year-ago quarter.
Total revenue of U.S. equity order flow was $3.4 million in the third quarter of 2007 compared to $3.7 million in the same year-ago quarter. The year over year decline in U.S. equity order flow revenue resulted mainly from a decrease in equity pass-through revenue of approximately $0.5 million and a strengthening Canadian dollar that impacted equity revenue by approximately $0.2 million. On a sequential quarter basis equity pass-through revenue decreased by approximately $0.7 million.
During the third quarter stock options to purchase 1,175,000 common shares expired unexercised. The Company has 14,782,974 common shares and 600,417 stock options outstanding as at September 30, 2007.
The Company intends to make application to the TSX for approval of a Normal Course Issuer Bid.
Patent Information
In January 1999, Belzberg received a U.S. Patent Number 5,864,827, recognizing its exclusive rights to intellectual property for a System and Method for Providing a Protocol Transaction Gateway. The patent protects Belzberg's Transactions Gateway, a system that translates the protocol of incoming transaction messages from customers into the appropriate protocol used by various exchanges and market makers. The technology facilitates electronic stock trading by allowing customers to execute trades on any market they choose from a single screen.
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