ENGINEERING.com Incorporated (TSX VENTURE:EGN), developer of the ENGINEERING.com
online resource and business for engineers today announced its financial results
for the third quarter of 2010.
ENGINEERING.com revenue was $312,503 for the three months ended September 30,
2010, compared to revenue of $364,081 for the third quarter of 2009. The decline
in revenue was focused on the educational software product line as many schools
in the United States suffered the impact of declining budgets. The impact was
exacerbated by the strength of the Canadian dollar relative to the American
dollar compared to a year ago. Mitigating these declines was the increase in
Internet-based revenue which grew by 90% from the comparable period in 2009 to
$137,129 in the third quarter of 2010. The net loss for the three months ended
September 30, 2010, totaled ($131,123) and $0.00 per Common Share compared with
a net loss of ($98,545) and $0.00 for the same period a year ago.
Operating profit (EBITDA) measured as earnings before interest, taxes,
amortization and stock-based compensation, was a loss of ($108,750) or $0.00 per
Common Share for the third quarter of 2010 compared with an operating loss of
($45,114) or $0.00 per Common Share for the three months ended September 30,
2009. The operating expenses in the latest period were $288,868 compared to
$292,738 for the third quarter a year earlier.
"The Company continued to focus its growth efforts on Internet advertising and
related services during the third quarter" said John Hayes, President of
ENGINEERING.com. "This focus drove growth in paid advertising impressions by
105% when compared to the third quarter last year".
As at September 30, 2010, the Company had a cash balance of $148,014 compared to
a cash balance of $199,570 as at September 30, 2009. This cash balance is
relatively small when compared to the Company's ongoing obligations as described
on pages 6 and 7 of the Company's Second Quarter 2010 Management Discussion &
Analysis under the heading, "Present Status and Risk Factors" as filed on
September 15, 2010.
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 and asset dispositions.
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 Canadian
generally accepted accounting 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 Canadian generally accepted
accounting 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. 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.
Balance Sheet
(unaudited) (audited)
As at As at
September 30, 2010 Dec. 31, 2009
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$ $
ASSETS
CURRENT ASSETS
Cash 148,014 106,118
Accounts receivable 184,663 291,761
Prepaid expenses and deposits 21,324 30,391
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TOTAL CURRENT ASSETS 354,001 428,270
CAPITAL ASSETS 22,397 27,916
INTANGIBLE ASSETS 314,962 412,993
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TOTAL ASSETS 691,360 869,179
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LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued
liabilities 899,203 707,147
Deferred revenue 50,070 46,614
Promissory notes -- 24,999
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TOTAL LIABILITIES 949,273 778,760
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SHAREHOLDERS' EQUITY
Share capital 15,113,752 15,113,752
Contributed surplus 434,047 417,959
Deficit (15,805,712) (15,441,292)
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TOTAL SHAREHOLDERS' EQUITY (257,913) 90,419
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TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 691,360 869,179
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STATEMENT OF OPERATIONS AND DEFICIT
(unaudited)
Three Months Three Months Nine Months Nine Months
Ended Sept. Ended Sept. Ended Sept. Ended Sept.
30, 2010 30, 2009 30, 2010 30, 2009
-------------------------------------------------------
$ $ $ $
REVENUE 312,503 364,081 1,042,941 944,403
COST OF SALES 132,385 116,457 427,942 306,994
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GROSS PROFIT 180,118 247,624 614,999 637,409
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OPERATING EXPENSES
Salaries and
benefits 125,799 121,338 404,997 400,553
Marketing expenses 27,856 22,444 76,356 68,102
Development costs 50,151 73,676 156,388 207,539
General and
administrative 85,062 74,280 209,127 227,561
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288,868 292,738 846,686 903,755
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INCOME (LOSS) BEFORE
UNDERNOTED ITEMS (108,750) (45,114) (231,869) (266,346)
Stock based
compensation (3,608) (3,844) (16,087) (24,492)
Depreciation expense (18,765) (49,587) (116,464) (147,893)
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NET LOSS (131,123) (98,545) (364,421) (438,731)
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Basic and diluted
loss per share -
Total (0.00) (0.00) (0.01) (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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Statements of
Deficit
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Deficit, beginning
of Period (15,674,589) (15,298,684) (15,441,292) (14,958,498)
Net loss (131,123) (98,545) (364,420) (438,731)
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DEFICIT, end of
period (15,805,712) (15,397,229) (15,805,712) (15,397,229)
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STATEMENT OF CASH FLOWS
(unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Sept. 30 Sept. 30, Sept. 30, Sept. 30,
2010 2009 2010 2009
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$ $ $ $
OPERATING ACTIVITIES
Net loss (131,123) (98,545) (364,421) (438,731)
Add items not affecting
cash:
Stock based compensation 3,608 3,844 16,087 24,492
Depreciation and
amortization 18,765 49,587 116,464 147,893
Changes in operating assets
and liabilities other than
cash 67,698 (115,185) 311,678 (139,087)
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CASH USED IN OPERATING
ACTIVITIES (41,052) (160,229) 79,808 (405,433)
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FINANCING ACTIVITIES
Proceeds of share issuance -- -- -- 354,744
Promissory notes
(4,031) (17,259) (24,999) (49,119)
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CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (4,031) (17,259) (24,999) 305,625
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INVESTING ACTIVITIES
Fixed assets (4,348) (6,284) (12,914) (12,610)
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CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (4,348) (6,284) (12,914) (12,610)
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INCREASE (DECREASE) IN CASH (49,431) (183,842) 41,896 (112,418)
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CASH, beginning of period 197,445 383,412 106,118 311,988
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CASH, end of period 148,014 199,570 148,014 199,570
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