ENGINEERING.com Incorporated
TSX VENTURE : EGN

ENGINEERING.com Incorporated

November 11, 2005 15:19 ET

ENGINEERING.com Incorporated Announces Third Quarter Fiscal 2005 Results

TORONTO, ONTARIO--(CCNMatthews - Nov. 11, 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 third 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 $478,391 for the three months ended September 30, 2005 compared to revenue of $392,007 for the third quarter of 2004. Operating earnings (EBITDA) for the quarter ended September 30, 2005 totaled a loss of ($137,479) compared with an EBITDA loss of ($151,448) for the same period a year ago. Net loss for the third quarter of 2005 was ($206,091) or a net loss of ($0.01) per Common Share. This is compared with a net loss of ($470,006) or ($0.02) per Common Share for the three months period ended September 30, 2004. Total operating expenses in the latest period were $454,758 compared to $454,776 for the third quarter a year earlier.

On August 11, 2005, the Company announced the purchase of the "Alventive" engineering collaboration software and related intellectual property from BlueSky Solutions, LLC ("BlueSky"). The Alventive software allows engineers to share project plans, documents, drawings and changes with other project participants and represents the core of ENGINEERING.com's hosted Collaboration Suite software offering that was launched in late 2004. "The acquisition of the Alventive software was an important milestone for ENGINEERING.com," said John Hayes, President of ENGINEERING.com. "This purchase allows ENGINEERING.com to sell Collaboration Suite as a hosted or as a traditional deployed solution and to guide the future development of this software for our customers."

As at September 30, 2005, the Company had a cash balance of $140,717, compared to a cash balance of $231,222 as at December 31, 2004. On Nov 2, 2005 the Company sold the domain name MATHEMATICS.COM for net proceeds of $135,000 US.

About ENGINEERING.com Incorporated

ENGINEERING.com Incorporated (TSX VENTURE: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.



ENGINEERING.com Incorporated
Consolidated Balance Sheets

(Cdn. $)
(unaudited) (audited)
As at As at
September 30, December 31,
2005 2004
--------------------------------------------------------------------
ASSETS
Current Assets
Cash 140,717 231,222
Accounts Receivable 171,958 115,327
Prepaid Expenses and Deposits 56,200 63,975
Due from Related Parties 127,491 153,648
Notes Receivable - Short Term 296,363 308,712
--------------------------------------------------------------------
Total Current Assets 792,729 872,884

Notes Receivable - Long Term 74,091 296,362
Capital Assets, net 76,350 163,494
Intangible Assets, net 1,171,767 308,847
--------------------------------------------------------------------
TOTAL ASSETS 2,114,937 1,641,587
--------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
-----------
Current Liabilities
Accounts Payable and Accrued
Liabilities 543,514 375,486
Deferred Revenue 38,023 11,255
Short-term Portion of the
Long-term Debt 145,704 --
--------------------------------------------------------------------
Total Current Liabilities 727,241 386,741

Promissory Notes 376,402 --

--------------------------------------------------------------------
TOTAL LIABILITIES 1,103,643 386,741
--------------------------------------------------------------------

SHAREHOLDERS' EQUITY
--------------------
Share Capital 14,759,008 14,455,463
Contributed Surplus 168,267 126,255
Deficit (13,915,981) (13,326,872)
--------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 1,011,294 1,254,846
--------------------------------------------------------------------

--------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 2,114,937 1,641,587
--------------------------------------------------------------------


ENGINEERING.com Incorporated
Consolidated Statements of Income

(Cdn. $, unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
---------------------------------------------------------------------

Revenue 478,391 392,007 1,229,222 1,241,029
Cost of Sales 161,112 88,679 406,709 239,421
---------------------------------------------------------------------
GROSS PROFIT 317,279 303,328 822,513 1,001,608
---------------------------------------------------------------------

Expenses
Salaries & Benefits 247,094 213,978 709,358 730,697
Management Fees 11,043 12,758 33,129 62,597
Marketing Expenses 15,706 3,229 28,929 12,107
Development Costs 47,560 81,605 153,335 264,176
General &
Administrative 133,355 143,136 322,058 460,027
---------------------------------------------------------------------
454,758 454,776 1,246,709 1,529,604
---------------------------------------------------------------------

Operating Loss
before Under-noted
Items and
Discontinued
Operations: (137,479) (151,448) (424,196) (527,996)
---------------------------------------------------------------------
Stock Based
Compensation (14,004) (11,758) (42,012) (35,274)
Depreciation
Expense (54,608) (306,800) (122,901) (939,872)
---------------------------------------------------------------------
(68,612) (318,558) (164,913) (975,146)
---------------------------------------------------------------------
Loss from Continuing
Operations (206,091) (470,006) (589,109) (1,503,142)

Income (loss) from
Discontinued
Operations -- -- -- 93,853
Loss on Sale of
Discontinued
Operations -- -- -- (140,000)

---------------------------------------------------------------------
Net Loss (206,091) (470,006) (589,109) (1,549,289)
---------------------------------------------------------------------

Basic and Diluted
Loss per Share -
Continuing
Operations (0.01) (0.02) (0.02) (0.06)
Basic and Diluted
Loss per Share -
Discontinued
Operations -- -- -- (0.00)
Basic and Diluted
Loss per Share -
Total (0.01) (0.02) (0.02) (0.06)

Weighted Average
Number of Common
Shares (basic and
diluted) 28,744,968 27,621,100 27,810,257 24,858,692
---------------------------------------------------------------------

Consolidated
Statements of
Deficit
---------------------------------------------------------------------
Deficit,
beginning
of period (13,709,890) (12,603,282) (13,326,872) (11,453,758)
Adjustment for
change in
accounting
for stock based
compensation -- -- -- (70,241)
---------------------------------------------------------------------
Deficit,
beginning
of period,
adjusted (13,709,890) (12,603,282) (13,326,872) (11,523,999)
---------------------------------------------------------------------

---------------------------------------------------------------------
Net Loss (206,091) (470,006) (589,109) (1, 549,289)
Deficit, end of
period (13,915,981) (13,073,288) (13,915,981) (13,073,288)
---------------------------------------------------------------------
---------------------------------------------------------------------


ENGINEERING.com Incorporated
Consolidated Cash Flow Statements

(Cdn. $, unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
---------------------------------------------------------------------

OPERATING ACTIVITIES

Net Loss of
Continuing
Operations (206,091) (470,006) (589,109) (1,503,142)
ADD - Items Not
Affecting Cash
Stock Based
Compensation 14,004 11,758 42,012 35,274
Depreciation and
Amortization 54,608 306,800 122,901 939,872
Changes in
operating
assets and
liabilities other
than cash 99,221 51,240 172,097 218,670

---------------------------------------------------------------------
CASH USED IN
OPERATING
ACTIVITIES (38,258) (100,208) (252,099) (309,326)
---------------------------------------------------------------------

FINANCING ACTIVITIES

Issuance of Share
Capital -- 963,219 -- 963,219
Promissory Notes (12,143) -- (12,143)
Related Party
Note Payable -- (708,000) -- (944,000)

---------------------------------------------------------------------
CASH PROVIDED BY
(USED IN)
FINANCING
ACTIVITIES (12,143) 255,219 (12,143) 19,219
---------------------------------------------------------------------

INVESTING ACTIVITIES
Note Receivable 74,091 -- 234,620 --
Additions to Capital
Assets (1,729) (3,252) (6,001) (16,178)
Additions to
Intangible Assets (54,882) -- (54,882)

---------------------------------------------------------------------
CASH PROVIDED BY
(USED IN)
INVESTING
ACTIVITIES 17,480 (3,252) 173,737 (16,178)
---------------------------------------------------------------------

Net Increase
(Decrease) in Cash
for Continuing
Operations (32,921) 151,759 (90,505) (306,285)


CASH, beginning of
period 173,638 168,436 231,222 626,480
---------------------------------------------------------------------

CASH, end of period 140,717 320,195 140,717 320,195
---------------------------------------------------------------------



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)
    jhayes@engineering.com
    or
    ENGINEERING.com, Inc.
    40 Village Centre Place, Mississauga, ON Canada L4Z 1V9
    www.engineering.com