ENGINEERING.com Incorporated
TSX VENTURE : EGN

ENGINEERING.com Incorporated

August 08, 2005 15:13 ET

ENGINEERING.com Incorporated Announces Second Quarter Fiscal 2005 Results

TORONTO, ONTARIO--(CCNMatthews - Aug. 8, 2005) - ENGINEERING.com Incorporated (TSX VENTURE:EGN), developer of the ENGINEERING.com online resource and business for engineers, today announced its financial results for the second quarter of fiscal 2005. The Company's sales and service team focused its efforts in the quarter on the sale of the company's Collaboration Suite hosted service to commercial customers and CATIA from Dassault Systemes to the education market.

ENGINEERING.com revenue was $358,226 for the three months ended June 30, 2005 compared to revenue of $377,056 for the second quarter of 2004. Operating earnings (EBITDA) for the quarter ended June 30, 2005, measured as earnings before interest, taxes, amortization, stock-based compensation and provision for loss on discontinued businesses totaled a loss of ($160,751) compared with an EBITDA loss of ($178,238) for the same period a year ago. Net loss for the second quarter of 2005 was ($208,337) or a net loss of ($0.01) per Common Share. This is compared with a net loss of ($503,338) or ($0.02) per Common Share for the three months period ended June 30, 2004. Total operating expenses decreased in the latest period to $399,954 from $492,706 for the second quarter a year earlier.

"In the second quarter of 2005 we continued to sign up new customers for our Collaboration Suite product, including electronics manufacturing services provider, Celestica™," said John Hayes, President of ENGINEERING.com. The Company previously announced its intention to acquire the intellectual property at the core of its Collaboration Suite hosted service during the third quarter (see press release dated July 5, 2005).

Hayes also stated, "In the second quarter we also continued our successful sales growth in the education market. These improvements mitigated the impact of reduced revenues from related party services. During the third quarter we expect related party services revenue to recover to historic levels."

As at June 30, 2005, the Company had a cash balance of $173,638, compared to a cash balance of $231,222 as at December 31, 2004. The Company does not expect that the cash on hand at June 30, 2005 will be adequate to fund future growth objectives or acquisitions and the Company may seek to raise additional operating funds.

About ENGINEERING.com Incorporated

ENGINEERING.com Incorporated (TSXV: EGN) is the developer of the ENGINEERING.com online resource and business for engineers. ENGINEERING.com offers hosted and deployed engineering software and services to manufacturers, design consultants and engineering students 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) 264-0282 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 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.

™CELESTICA is an existing, pending or registered trademark of Celestica International Inc., used under license.



ENGINEERING.com Incorporated
Consolidated Balance Sheets

(Cdn. $)
(unaudited) (audited)
As at As at
June 30, December 31,
2005 2004
---------------------------------------------------------------------
ASSETS
Current Assets
Cash 173,638 231,222
Accounts Receivable 210,896 115,327
Prepaid Expenses and Deposits 48,176 63,975
Due from Related Parties 85,232 153,648
Notes Receivable - Short Term (Note 3) 296,363 308,712

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Total Current Assets 814,305 872,884

Notes Receivable - Long Term (Note 3) 148,182 296,362
Capital Assets, net 99,473 163,494
Intangible Assets, net 308,847 308,847
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TOTAL ASSETS 1,370,807 1,641,587
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LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

LIABILITIES
-----------
Current Liabilities
Accounts Payable and Accrued Liabilities 427,195 375,486
Deferred Revenue 43,776 11,255

---------------------------------------------------------------------
TOTAL LIABILITIES 470,971 386,741
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SHAREHOLDERS' EQUITY
--------------------
Share Capital 14,455,463 14,455,463
Contributed Surplus (Note 4) 154,263 126,255
Deficit (13,709,890) (13,326,872)
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TOTAL SHAREHOLDERS' EQUITY 899,836 1,254,846
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---------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 1,370,807 1,641,587
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ENGINEERING.com Incorporated
Consolidated Statements of Income

(Cdn. $, unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
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Revenue 358,226 377,056 750,831 849,022
Cost of Sales 119,023 62,588 245,597 150,742
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GROSS PROFIT 239,203 314,468 505,234 698,280
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Expenses
Salaries &
Benefits 239,027 224,420 462,164 516,719
Management Fees 11,043 26,541 22,086 49,839
Marketing Expenses 9,212 5,995 13,223 8,808
Development Costs 53,525 88,455 105,775 182,571
General &
Administrative 87,095 147,295 188,703 316,891
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399,954 492,706 791,951 1,074,828
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Operating Loss
before
Under-noted
Items and
Discontinued
Operations: (160,751) (178,238) (286,717) (376,548)
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Stock Based
Compensation (14,004) (11,758) (28,008) (23,516)
Depreciation
Expense (33,582) (313,342) (68,293) (633,072)
---------------------------------------------------------------------
(47,586) (325,100) (96,301) (656,588)
---------------------------------------------------------------------
Loss from
Continuing
Operations (208,337) (503,338) (383,018) (1,033,136)

Income (loss)
from Discontinued
Operations -- -- -- 93,853

Loss on Sale
of Discontinued
Operations -- -- -- (140,000)

---------------------------------------------------------------------
Net Loss (208,337) (503,338) (383,018) (1,079,283)
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Basic and
Diluted Loss
per Share -
Continuing
Operations (0.01) (0.02) (0.01) (0.04)

Basic and
Diluted Loss
per Share -
Discontinued
Operations -- -- -- (0.00)

Basic and
Diluted Loss
per Share - Total (0.01) (0.02) (0.01) (0.05)

Weighted Average
Number of
Common Shares
(basic and
diluted) 27,810,136 23,462,310 27,810,136 23,462,310
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Consolidated
Statements of
Deficit
---------------------------------------------------------------------
Deficit,
beginning of
period (13,501,553) (12,099,944) (13,326,872) (11,453,758)
Adjustment for
change in
accounting for
stock based
compensation -- -- -- (70,241)
---------------------------------------------------------------------
Deficit,
beginning of
period,
adjusted (13,501,553) (12,099,944) (13,326,872) (11,523,999)
---------------------------------------------------------------------

---------------------------------------------------------------------
Net Loss (208,337) (503,338) (383,018) (1,079,283)
Deficit,
end of
period (13,709,890) (12,603,282) (13,709,890) (12,603,282)
---------------------------------------------------------------------
---------------------------------------------------------------------



ENGINEERING.com Incorporated
Consolidated Cash Flow Statements

(Cdn. $, unaudited)

Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
---------------------------------------------------------------------

OPERATING ACTIVITIES

Net Loss of Continuing
Operations (208,337) (503,338) (383,018) (1,033,136)
ADD - Items Not
Affecting Cash
Stock Based
Compensation 14,004 11,758 28,008 23,516
Depreciation and
Amortization 33,582 313,342 68,293 633,072
Changes in operating
assets and
liabilities other
than cash 89,861 (137,145) 72,876 148,922

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CASH USED IN
OPERATING
ACTIVITIES (70,890) (315,383) (213,841) (227,626)
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FINANCING ACTIVITIES

Related Party
Note Payable -- (118,000) -- (236,000)

---------------------------------------------------------------------
CASH USED IN FINANCING
ACTIVITIES -- (118,000) -- (236,000)
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INVESTING ACTIVITIES

Note Receivable 74,091 -- 160,529 --
Additions to Capital
Assets (4,272) (12,926) (4,272) (12,926)

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CASH PROVIDED BY
(USED IN) INVESTING
ACTIVITIES 69,819 (12,926) 156,257 (12,926)
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Net Decrease in Cash
for Continuing
Operations (1,071) (446,309) (57,584) (476,552)


CASH, beginning of
period 174,709 596,237 231,222 626,480
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CASH, end of period 173,638 149,928 173,638 149,928
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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, Inc.
    John Hayes
    President & CFO
    (905) 273-9991, ext. 280, Toll Free: 1-877-997-9917
    (905) 273-6691 (FAX)
    jhayes@engineering.com
    or
    ENGINEERING.com, Inc.
    40 Village Centre Place,
    Mississauga, ON Canada L4Z 1V9
    Web site: www.engineering.com