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VANCOUVER - March 28, 2011 - VendTek Systems Inc. (VSI - TSX Venture) (the "Company"), a developer and licensor of software for the global prepaid and financial services markets, today reported its financial results for the first quarter ended January 31, 2011.
Selected First Quarter Operational Highlights
- Opened two offices in Brazil: Sao Paulo and Bauru
- Signed a partnership agreement with Software Express, an integration hub for Brazil's main mobile telephone operators.
- Signed a national distribution agreement with Vivo (one of Brazil's largest mobile telecom operators) to offer wireless recharge services.
- Signed a national distribution agreement with Embratel Participações S.A. to distribute prepaid fixed telephony (land-line) vouchers.
- Signed a national distribution agreement with Telefonica to distribute prepaid recharge and long distance services to its customers.
- Signed a national distribution agreement with TIM Brazil (one of Brazil's largest telecommunications operators and a subsidiary of Telecom Italia) to distribute wireless recharge services.
- Completed convertible debenture financing totaling $550,000.
- Signed agreement with a leading bill payment aggregator in the United States to provide financial services to our distribution network.
Selected First Quarter Financial Information
- Virtual prepaid revenues decreased approximately 13% to $26 million in the first quarter of fiscal 2011 from $29 million in the first quarter of fiscal 2010;
- Software license and services revenues increased 60% to $509,000 in the first quarter of fiscal 2011 from $318,000 in the first quarter of fiscal 2010;
- Gross margins increased to 5.2% from 4.9% in first quarter of fiscal 2011 and 2010;
- Consolidated net loss was $443,000 for the quarter ended January 31, 2011, compared with a net loss of $106,000 for the same period in 2010.
"We have focused our company around the execution of five major initiatives, one of which is the rapid and successful launch of our operations in Brazil, and we are very excited about our efforts to date," said Doug Buchanan, President and Chief Executive Officer of VendTek.
"Specifically, we are building our operating infrastructure paying attention to the local differences of the Brazilian market to more familiar markets; we have signed a number of national distribution contracts in Brazil and have started to see some transactions go through our system. Regarding our other initiatives, we have also increased our international license revenues by 60% from the previous year. We have a number of efforts under way that we believe will increase the profitability in North America and build on our e-Fresh™ platform," continued Mr. Buchanan.
"We have entered a large market in Brazil and the costs associated with doing so are reflected in our first quarter results.In anticipation of this investment, we announced and successfully, closed financings totaling $4.067 million. This includes the two financings that we closed subsequent to the end of the quarter. We believe we have enough cash to execute on our strategy in Brazil," said Nurez Khimji, Chief Financial Officer of VendTek.
Mr. Khimji continued, "Looking ahead, in Brazil, we expect to continue to sign distribution and partnership agreements with some of the larger suppliers in the country, and to roll out our network as we begin to sign merchants. This will result in increased transactions and revenues."
Financial Review for the Quarter Ended January 31, 2011 and 2010
VendTek's MD&A and complete statements are available at www.sedar.com and the Company's website www.vendteksystems.com.
For more information or to receive the complete statements please contact Samantha White at 604-805-4653 or 1-800-806-4958 or investment@vendteksystems.com.
Conference Call
VendTek management intends to host a conference call on Tuesday March 29, 2011 at 4:00 p.m. EDT (1:00 p.m. PDT) to discuss its financial results and operational highlights for the first quarter of fiscal 2011.
To access the conference call by telephone, dial 1-647-427-7450 or 1-888-231-8191 and reference the company name, VendTek Systems Inc., or the conference code 55707272. The conference call will be archived for replay until April 5, 2011 at midnight. To access the archived conference call, dial 1-800-642-1687 and enter the conference code 55707272.
A live audio webcast of the conference call will be available at https://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3457740 Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the www.vendteksys.com.
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