ENGINEERING.com Incorporated (TSX VENTURE:EGN), developer of the ENGINEERING.com
online resource for engineers today announced its unaudited financial results
for the second quarter ended June 30, 2011.
Beginning with the first quarter of 2011, Engineering.com reported its financial
results in accordance with International Financial Reporting Standards (IFRS),
as required for public companies in Canada. Previously, the Company reported its
financial results under Canadian Generally Accepted Accounting Standards (GAAP).
Financial results for the corresponding period in 2010 have been restated to
reflect the adoption of IFRS.
ENGINEERING.com revenue was $370,682 for the three month ended June 30, 2011,
compared to revenue of $412,667 for the second quarter in 2010. The net loss for
the three months ended June 30, 2011, totaled ($75,459) and ($0.00) per Common
Share compared with a net loss of ($111,939) and ($0.00) for the same period a
year ago. The decrease in revenue is the result of decreasing software sales.
Operating loss (EBITDA) measured as earnings before interest, taxes,
amortization and stock-based compensation, was ($67,213) or ($0.00) per Common
Share for the second quarter of 2011 compared with an operating loss of
($58,402) or ($0.00) per Common Share for the three month period ended June 30,
2010. The operating expenses in the latest period were $275,400, down from
$285,875 in the second quarter a year earlier.
"Traffic to our primary web site more than doubled in the year to date as
compared to the first six months of 2010," said John Hayes, President of
ENGINEERING.com. "In addition, advertisers are discovering that our new
sponsored video series like the Product Design Show and Some Assembly Required
represent a powerful way for them to connect with engineers."
As at June 30, 2011, the Company had a cash balance of $30,635 compared to a
cash balance of $78,244 as at December 31, 2010. This cash balance is relatively
small when compared to the Company's ongoing obligations and in light of
continued operating losses. On August 4, 2011 the Company announced a private
placement of up to 7,000,000 Common Shares at a subscription price of $0.05 per
share for gross proceeds of up to $350,000. The proceeds from this private
placement will be used for general working capital purposes. This pending
transaction is subject to regulatory approval. Readers are referred to page 9 of
the Company's 2010 Annual Management Discussion & Analysis under the heading,
"Present Status and Risk Factors" as filed on April 28, 2011.
About ENGINEERING.com Incorporated
ENGINEERING.com Incorporated (TSX VENTURE:EGN) is the developer-owner of the
www.ENGINEERING.com Web site and business. ENGINEERING.com offers marketing and
lead generation services to manufacturers, design consultants and engineering
academia around the world. The ENGINEERING.com Incorporated head office is
located in Mississauga, Ontario, Canada and can be reached toll-free at
1-877-997-9917, by facsimile at 905-273-6691 or through the Internet at
www.ENGINEERING.com.
EBITDA
EBITDA is defined by the Company as operating income before interest expense,
income taxes, amortization, stock-based compensation, asset dispositions and
provision for discontinued operations. The Company has included information
concerning EBITDA because it believes that EBITDA is used by certain investors
as one measure of the Company's financial performance. EBITDA is not a measure
of financial performance under IFRS principles and is not necessarily comparable
to similarly titled measures used by other companies. EBITDA should not be
construed as an alternative to operating income or to cash flows from operating
activities (as determined in accordance with IFRS principles) as a measure of
liquidity.
Forward Looking Statements
This press release may contain forward-looking statements based on management's
current projections, beliefs and opinions at the date of this press release.
Actual results could differ materially from those anticipated in these
statements. The Company's ability to continue as a going concern is dependent
upon its ability to generate future profitable operations and/or to obtain the
necessary financing to meet its obligations and repay its liabilities arising
from normal business operations when they come due. ENGINEERING.com Incorporated
undertakes no responsibility to update forward-looking statements if
circumstances or management's projections, beliefs or opinions change.
The contents of this News Release have been reviewed and approved by the Audit
Committee and the Board of Directors.
Condensed Interim Statements of Financial Position
(In Canadian dollars, Unaudited)
June 30, December 31,
2011 2010
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$ $
ASSETS
CURRENT ASSETS
Cash 30,635 78,244
Accounts receivable 312,601 316,302
Prepaid expenses and deposits 20,889 13,895
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TOTAL CURRENT ASSETS 364,125 408,441
PROPERTY AND EQUIPMENT 15,391 20,727
INTANGIBLE ASSETS 320,368 316,063
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TOTAL ASSETS 699,884 745,231
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities 525,529 489,015
Deferred revenue 115,759 65,640
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TOTAL LIABILITIES 641,288 554,655
SHAREHOLDERS' EQUITY
Share capital 15,113,752 15,113,752
Contributed surplus 483,846 472,843
Deficit (15,539,002) (15,396,019)
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TOTAL SHAREHOLDERS' EQUITY 58,596 190,576
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 699,884 745,231
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Condensed Interim Statements of Loss and Comprehensive Loss
(In Canadian dollars, Unaudited)
Three months Six month months
ended June 30, ended June 30,
2011 2010 2011 2010
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$ $ $ $
(Note 6) (Note 6)
REVENUE (Note 5) 370,682 412,667 726,241 730,438
COST OF SALES 162,495 185,194 320,790 295,559
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GROSS PROFIT 208,187 227,473 405,415 434,879
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OPERATING EXPENSES
Salaries and benefits 138,085 145,179 276,983 279,197
Marketing expenses 21,489 28,702 44,171 48,499
Development costs 49,946 56,154 97,126 106,237
General and administrative 65,880 55,840 112,782 124,066
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275,400 285,875 531,062 557,999
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LOSS BEFORE UNDERNOTED ITEMS: (67,213) (58,402) (125,611) (123,120)
Stock based compensation (5,201) (5,411) (11,003) (12,025)
Amortization expense (3,045) (48,126) (6,369) (97,699)
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NET LOSS (75,459) (111,939) (142,983) (232,845)
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Loss per share
Basic 0.00 0.00 0.00 (0.01)
Diluted 0.00 0.00 0.00 (0.01)
Weighted average number of Common Shares
(basic and diluted) 36,870,623 36,870,623 36,870,623 36,870,623
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Condensed Statements of Changes in Shareholder's Equity
(In Canadian dollars, Unaudited)
Six months ended June 30, 2011:
# $ $
Number of Share Contributed $ $
Common Shares Capital Surplus Deficit Total
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At December 31,
2010 38,870,623 15,113,752 472,843 (15,396,019) 190,576
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Net Loss for the
period -- -- -- (142,983) (142,983)
Stock based
compensation -- -- 11,003 - 11,003
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At June 30, 2011 38,870,623 15,113,752 483,846 (15,539,002) 58,596
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Six months ended June 30, 2010:
At January 1, 2010 38,870,623 15,113,752 445,548 (15,468,881) 90,419
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Net Loss for the
period -- -- -- (232,845) (232,845)
Stock based
compensation -- -- 12,025 - 12,025
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At June 30, 2010 38,870,623 15,113,752 457,575 (15,701,726) 130,399
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Condensed Interim Statements of Cash Flows
(In Canadian dollars, Unaudited)
Three months Six months
ended June 30, ended June 30,
2011 2010 2011 2010
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$ $ $ $
OPERATING ACTIVITIES
Net loss (75,459) (111,939) (142,983) (232,845)
Add items not affecting cash:
Stock based compensation 5,201 5,411 11,003 12,025
Amortization 3,045 48,126 6,369 97,699
Changes in operating assets and
liabilities other than cash (40,093) 122,906 83,340 243,980
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CASH FLOWS FROM OPERATING ACTIVITIES (107,306) 64,504 (42,271) 120,860
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FINANCING ACTIVITIES
Promissory notes -- (12,004) -- (20,968)
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CASH FLOWS FROM FINANCING ACTIVITIES -- (12,004) -- (20,968)
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INVESTING ACTIVITIES
Additions to property and equipment (487) (333) (1,033) (5,822)
Additions to intangible assets (1,284) (2,743) (4,305) (2,743)
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CASH FLOWS FROM INVESTING ACTIVITIES (1,771) (3,076) (5,338) (8,565)
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INCREASE IN CASH (109,077) 49,424 (47,609) 91,327
CASH, beginning of period 139,712 148,021 78,244 106,118
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CASH, end of period 30,635 197,445 30,635 197,445
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Engineering.Com Incorporated (TSXV:EGN)
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