LEVIS, QC, April 16, 2014 /PRNewswire/ - DEQ Systems Corp. (TSXV: DEQ) ("DEQ" or the "Company") announces the filing of its first quarter financial results for the period ended
February 28, 2014. The Consolidated Financial Statements are available
on SEDAR (www.sedar.com) and DEQ's website. A conference call will be held on Thursday, April
17, 2014 at 11am EST to present and discuss these results. Those
interested in participating in the call should dial toll
free 1 (877) 223-4471 or (647) 788-4922. A presentation will be
available on DEQ's website in the Investors/Financial
Reports/Presentation section to support the call content.
2014 FIRST QUARTER RESULTS HIGHLIGHTS:
Financial Metrics
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Revenue
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29% increase in product rental revenue from $1,195,000 in Q1-2013 to
$1,546,000 in Q1-2014.
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25% increase in total recurring revenue from $1,473,000 in Q1-2013 to
$1,836,000 in Q1-2014.
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14% increase in gross profit, before non cash items, from 1,428,000 to
$1,630,000 in Q1-2014.
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Operating Costs
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Stable operating costs excluding amortization and stock option expenses
changing of 3% from $1,384,000 in Q1-2013 to $1,429,000 in Q1-2014.
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EBITDA
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EBITDA of $201,000 in Q1-2014 increased of $157,000 from $44,000 in
Q1-2013.
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Liquidity and Cash Flow
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DEQ had a cash position of $1,451,000 as of February 28, 2014.
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Positive cash flow from operating activities before changes in non-cash
working capital items of $247,000 in Q1-2014 compared to $65,000 in
Q1-2013.
Operational Highlights
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As of February 28, 2014, DEQ had 2,089 units worldwide (1,714 units
installed directly and 375 units installed by our distributors)
compared to 1,800 units worldwide as of February 28, 2013.
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During the first quarter of 2014, a total of 32 net units were installed
compared to net installations of 75 units in the prior year first
quarter. The Company is generating an average recurring net lease of
$3,500 per unit per year on its worldwide installed base of 2,089 units
for total annual recurring revenue of approximately $7,300,000.
"Product Leasing Revenue posted solid growth of 29% and an EBITDA of
$200,000 in the first quarter of 2014", stated François Proulx, Interim
Chief Executive Officer and Chief Financial Officer of DEQ. "This is
normally a seasonally soft quarter and we are quite happy with these
results. With more than 2,089 units currently in operation worldwide
generating approximately $7.3 million in annual recurring revenue, we
are focusing on our financial performance. New products and
commercialization acceleration will further strengthen these metrics
going forward."
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Statement of Earnings
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First Quarter
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Twelve-Month Period
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February 28,
2013
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February 28,
2014
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February 28,
2013
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February 28,
2014
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(unaudited)
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(unaudited)
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(unaudited)
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(unaudited)
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Product rental
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1,195,000
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1,546,000
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4,430,000
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5,833,000
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Royalties (1)
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278,000
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290,000
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1,122,000
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1,182,000
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Total recurring revenue
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1,473,000
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1,836,000
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5,552,000
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7,015,000
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Non recurring revenue
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126,000
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41,000
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411,000
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267,000
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Total Revenue
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1,599,000
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1,877,000
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5,963,000
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7,282,000
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Gross Profit (2)
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1,428,000
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1,630,000
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5,161,000
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6,183,000
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% Gross margin
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89%
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87%
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87%
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85%
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Operating expenses (2)
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1,384,000
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1,429,000
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5,415,000
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5,420,000
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EBITDA (3)
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44,000
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201,000
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(254,000)
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763,000
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Stock based compensation
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11,000
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7,000
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37,000
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156,000
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Amortization expenses
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685,000
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661,000
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2,723,000
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2,767,000
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Interest expenses
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5,000
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2,000
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16,000
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12,000
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Foreign exchange (gain) loss
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(40,000)
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(33,000)
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(17,000)
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15,000
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Net Income (Loss)
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(617,000)
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(436,000)
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(3,013,000)
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(2,187,000)
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Net Income (Loss ) per share
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$(0.009)
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$(0.006)
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$(0.042)
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$(0.031)
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Note 1:
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DEK International - Distributor located in Panama that covers mostly
South America territories.
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Note 2:
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Gross profit and operating expenses excluded non-cash items such as
depreciation, amortization and stock-based compensation.
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Note 3:
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DEQ uses EBITDA (Earnings before stock based compensation, Interest,
Taxes, Depreciation and Amortization and foreign exchange impact), a
non-IFRS measure, to evaluate the Company's operating performance.
Securities regulators require that issuers caution readers that
measures adjusted to a basis other than IFRS do not have standardized
meaning under IFRS and are unlikely to be comparable to similar
measures used by other companies.
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Financial Position
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February 28,
2013
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November 30,
2013
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February 28,
2014
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(unaudited)
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(audited)
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(unaudited)
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Cash and cash equivalents
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899,000
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1,565,000
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1,451,000
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Current assets (other than cash)
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1,861,000
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2,175,000
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2,360,000
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Long-term assets
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8,326,000
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6,576,000
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6,019,000
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Total Assets
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11,086,000
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$10,316,000
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9,830,000
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Current liabilities
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1,467,000
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1,244,000
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1,170,000
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Shareholders' equity
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9,619,000
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9,072,000
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8,660,000
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Total Liabilities and Equity
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11,086,000
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$10,316,000
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9,830,000
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Number of shares outstanding
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69,182,000
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71,682,000
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71,682,000
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ABOUT DEQ
DEQ Systems Corp. (TSXV: DEQ) is a customer-centric company that
delivers best of breed table game technology related products to the
global gaming industry that adds value and increases client revenue.
DEQ provides table game bonusing technology, table games, table game
results tracking and jackpot connectivity solutions to more than 275
casinos in 30 countries. DEQ is an intellectual property focused
company that has an extensive patent portfolio of more than 20 patents
recognized in 50 countries. For further information, please visit www.deq.com.
TSX Venture does not accept any responsibility regarding the accuracy of
the information contained in this press release.
Forward-looking statements contained in this Press Release involve known
and unknown risks, uncertainties and other factors that may cause
actual results, performance and achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by the said forward-looking
statements.
SOURCE DEQ SYSTEMS CORP.
