ENGINEERING.com Incorporated
TSX VENTURE : EGN

ENGINEERING.com Incorporated

March 21, 2007 14:29 ET

ENGINEERING.com Incorporated Announces Fourth Quarter & Fiscal 2006 Results

Company reports 30% revenue growth and positive operating results

TORONTO, ONTARIO--(CCNMatthews - March 21, 2007) - ENGINEERING.com Incorporated (TSX VENTURE:EGN), developer of the ENGINEERING.com online resource and business for engineers today announced its financial results for the fourth quarter and year ended December 31, 2006.

ENGINEERING.com revenue was $2,295,301 for the fiscal year 2006, representing a 30% increase compared to revenue of $1,759,077 for the year 2005. Revenue for the three months ended December 31, 2006 was $563,969 compared to $529,855 for the fourth quarter of 2005. The net loss for the year ended December 31, 2006, totaled ($262,090) and ($0.01) per Common Share compared with a net loss of ($631,858) and ($0.02) for the same period a year ago.

Operating income (EBITDA) measured as earnings before interest, taxes, amortization and stock-based compensation, was $20,253 or $0.00 per Common Share for the fourth quarter of 2006 compared with a operating loss of ($111,468) or ($0.00) per Common Share for the three month period ended December 31, 2005. Operating income for fiscal 2006 was $30,477 or $0.00 per Common Share compared to an operating loss of ($535,664) or ($0.02) per Common Share for fiscal 2005. The operating expenses in the latest period were $354,683 and for the year were $1,523,000 compared to $451,586 for the fourth quarter a year earlier and $1,698,295 for fiscal 2005.

The increase in revenues is attributed to both the full year impact of the Company's outsourcing services provided to RAND Worldwide, which began in July 2005, and an increase in sales of engineering software and services to the commercial and education markets in North America. These engineering solutions are sold on an annual basis such that customers typically make these purchases each year.

"We are pleased to report both increasing revenues and decreasing operating expenses during the year. Our customer base for engineering solutions continues to grow, which bodes well for future periods as the 2006 sales come up for renewal," said John Hayes, President of ENGINEERING.com. "During the fourth quarter of 2006 we also launched a number of new services to support our online community of engineers. I look forward to reporting on the growth of that community in 2007."

As at December 31, 2006, the Company had a cash balance of $187,190 compared to a cash balance of $179,347 as at December 31, 2005.

About ENGINEERING.com Incorporated

ENGINEERING.com Incorporated (TSX VENTURE:EGN) is the developer-owner of the www.ENGINEERING.com Web site and Internet-based software and business. ENGINEERING.com offers hosted and deployed engineering software and 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 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.



ENGINEERING.com Incorporated
Balance Sheets

(Cdn. $)

(audited) (audited)
As at As at
December 31, 2006 December 31, 2005
---------------------------------------------------------------------------
ASSETS
Current Assets
Cash 187,190 179,347
Accounts Receivable 209,012 148,041
Prepaid Expenses and Deposits 55,938 60,258
Due from Related Parties 232,470 204,327
Notes Receivable - Short Term -- 296,363
---------------------------------------------------------------------------
Total Current Assets 684,610 888,336

Property and Equipment, net 32,300 55,289
Intangible Assets, net 948,598 1,127,134
---------------------------------------------------------------------------
TOTAL ASSETS 1,665,508 2,070,759
---------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
-----------
Current Liabilities
Accounts Payable and Accrued Liabilities 511,706 504,964
Deferred Revenue 30,725 76,680
Promissory Note - Short-term 160,812 246,887
---------------------------------------------------------------------------
Total Current Liabilities 703,243 828,531

Promissory Note - Long Term 155,763 250,935

---------------------------------------------------------------------------
TOTAL LIABILITIES 859,006 1,079,466
---------------------------------------------------------------------------

SHAREHOLDERS' EQUITY
--------------------
Share Capital 14,759,008 14,759,008
Contributed Surplus 268,314 191,015
Deficit (14,220,820) (13,958,730)
---------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 806,502 991,293
---------------------------------------------------------------------------

---------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 1,665,508 2,070,759
---------------------------------------------------------------------------



ENGINEERING.com Incorporated
Statements of Income

(Cdn. $)
(unaudited) (unaudited) (audited) (audited)
Three Months Three Months Year Year
Ended Ended Ended Ended
Dec. 31, 2006 Dec. 31, 2005 Dec. 31, 2006 Dec. 31, 2005
---------------------------------------------------------------------------

Revenue 563,969 529,855 2,295,301 1,759,077
Cost of Sales 189,033 189,737 741,824 596,446
---------------------------------------------------------------------------
GROSS PROFIT 374,936 340,118 1,553,477 1,162,631

Expenses
Salaries &
Benefits 194,574 253,526 835,444 962,784
Marketing
Expenses 3,772 10,600 10,533 39,529
Development
Costs 72,309 65,648 277,876 218,983
General &
Administrative 84,028 121,812 399,147 476,999
---------------------------------------------------------------------------
354,683 451,586 1,523,000 1,698,295
---------------------------------------------------------------------------

Operating
Income/(Loss)
before Under-
noted Items: 20,253 (111,468) 30,477 (535,664)
Disposal of
Capital Assets -- 158,936 -- 158,936
Stock Based
Compensation (15,955) (22,748) (77,299) (64,760)
Amortization
Expense (51,823) (67,469) (220,266) (190,370)
Other income
- tax recovery (11,002) -- 4,998 --
---------------------------------------------------------------------------
Net Loss (58,527) (42,749) (262,090) (631,858)
---------------------------------------------------------------------------

Basic and
Diluted (Loss)
per Share (0.00) (0.00) (0.01) (0.02)

Weighted Average
Number of Common
Shares (basic
and diluted) 29,496,499 29,496,499 29,496,499 28,466,201
---------------------------------------------------------------------------

Consolidated
Statements of
Deficit
---------------------------------------------------------------------------
Deficit,
beginning
of period (14,162,293) (13,915,981) (13,958,730) (13,326,872)
---------------------------------------------------------------------------
Net Income
(Loss) (58,527) (42,749) (262,090) (631,858)
Deficit,
end of
period (14,220,820) (13,958,730) (14,220,820) (13,958,730)
---------------------------------------------------------------------------
---------------------------------------------------------------------------



ENGINEERING.com Incorporated
Cash Flow Statements

(Cdn. $)
(unaudited) (unaudited) (audited) (audited)
Three Months Three Months Year Year
Ended Ended Ended Ended
Dec. 31, 2006 Dec. 31, 2005 Dec. 31, 2006 Dec. 31, 2005
---------------------------------------------------------------------------

OPERATING
ACTIVITIES

Net Income
(Loss) (58,525) (42,749) (262,090) (631,858)
ADD - Items
Not Affecting
Cash
Stock Based
Compensation 15,955 22,748 77,299 64,760
Amortization 49,105 67,469 217,549 190,370
Changes in
operating
assets and
liabilities
other than
cash 586 (56,872) (124,007) 115,226

---------------------------------------------------------------------------
CASH FROM
OPERATING
ACTIVITIES 7,121 (9,404) (91,249) (261,502)
---------------------------------------------------------------------------

FINANCING
ACTIVITIES

Promissory
Notes (64,396) (24,283) (178,530) (36,426)

---------------------------------------------------------------------------
CASH FROM
FINANCING
ACTIVITIES (64,396) (24,283) (178,530) (36,426)
---------------------------------------------------------------------------

INVESTING
ACTIVITIES
Note Receivable 74,091 74,091 296,363 308,711
Additions to
Property and
Equipment (10,258) (1,774) (18,741) (7,775)
Additions to
Intangible
Assets -- -- -- (54,883)

---------------------------------------------------------------------------
CASH FROM
INVESTING
ACTIVITIES 63,832 72,317 277,622 246,053
---------------------------------------------------------------------------

Net Increase
(Decrease) in
Cash 6,557 38,630 (7,843) (51,875)

CASH, beginning
of period 180,633 140,717 179,347 231,222
---------------------------------------------------------------------------

CASH, end
of period 187,190 179,347 187,190 179,347
---------------------------------------------------------------------------


The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • ENGINEERING.com Incorporated
    John Hayes
    President & CFO
    (905) 273-9991, ext. 280 or Toll Free: 1-877-997-9917
    (905) 273-6691 (FAX)
    Website: www.engineering.com