LEVIS, QC, July 10, 2014 /PRNewswire/ - DEQ Systems Corp. (TSXV: DEQ)
("DEQ" or the "Company") announces the filing of its second quarter financial results for the period ended
May 31, 2014. The Consolidated Financial Statements are available on
SEDAR (www.sedar.com) and DEQ's website. A conference call will be held on Friday, July
11, 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 +1 (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 Second Quarter Results:
Financial Metrics
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- Revenue
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Second Quarter:
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19% increase in product rental revenue to $1,602,000 in Q2-2014.
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13% increase in total recurring revenue to $1,853,000 in Q2-2014.
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12% increase in total revenue to $1,926,000 in Q2-2014.
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Six-Month Period:
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24% increase in product rental revenue to $3,149,000 in 2014.
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19% increase in total recurring revenue to $3,690,000 in 2014.
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15% increase in total revenue to $3,803,000 in 2014.
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23% increase in recurring revenue for the twelve-month period ended May
31, 2014 to $7,223,000 compared to $5,880,000 for the same period ended
May 31, 2013.
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- Operating Expenses before non-cash items
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1% decrease in operating expenses to $1,355,000 in Q2-2014.
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1% increase in operating expenses for the six-month period to $2,783,000
in 2014.
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Operating costs should remain relatively stable in 2014.
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- EBITDA
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EBITDA of $354,000 in Q2-2014 compared to $79,000 in Q2-2013, an
increase of $275,000.
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EBITDA of $555,000 for the six-month period in 2014 compared to $122,000
for the same period in 2013, an increase of $433,000.
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For the twelve-month period ended May 31, 2014, EBITDA reaches
$1,038,000 compared to an EBITDA of $2,000 for the twelve-month period
ended May 31, 2013, an increase of $1,036,000.
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- Cash Flow
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Positive cash flow from operating activities before working capital
items of $300,000 in Q2-2014 compared to $75,000 in Q2-2013, mainly
explained by the increase in EBITDA.
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Second Quarter Highlights and Subsequent Events
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As of May 31, 2014, DEQ had 2,065 units worldwide compared to 1,933
units as of May 31, 2013.
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On July 2, 2014, the company announced that Mr. Joseph E. Bertolone has
been named as its new President and CEO, effective July 21st, 2014, subject to regulatory approval. Mr. Bertolone will be based in
Nevada, USA.
"We are very pleased to present our financial statements for the 2014
second quarter with an EBITDA of $354,000 and a quarterly recurring
revenue of $1,853,000", stated François Proulx, Chief Financial Officer
of DEQ. "Even though this quarter has been affected by a decrease of 24
units due to a highly competitive market environment, we have a solid
installation base of 2,065 units currently in operation worldwide,
generating approximately $7.4 million in annual recurring revenue. The
recent nomination of our President and CEO, Joe Bertolone, also opens a
new chapter for DEQ. We believe that his experience of the gaming
industry and his leadership are major assets for DEQ to continue to
deliver innovations and growth going forward."
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Statement of Earnings
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(unaudited)
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Second Quarter
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Six-Month Period
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May 31, 2013
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May 31, 2014
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May 31, 2013
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May 31, 2014
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Product rental
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1,341,000
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1,602,000
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2,536,000
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3,149,000
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Royalties
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294,000
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251,000
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572,000
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541,000
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Total recurring revenue
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1,635,000
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1,853,000
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3,108,000
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3,690,000
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Non-recurring revenue
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79,000
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73,000
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205,000
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113,000
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Total Revenue
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1,714,000
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1,926,000
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3,313,000
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3,803,000
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Gross Profit (1)
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1,442,000
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1,708,000
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2,869,000
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3,338,000
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% Gross margin
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84%
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89%
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87%
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88%
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Operating expenses (1)
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1,363,000
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1,354,000
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2,747,000
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2,824,000
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EBITDA (2)
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79,000
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354,000
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122,000
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555,000
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Stock based compensation
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136,000
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6,000
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147,000
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13,000
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Amortization expenses
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694,000
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671,000
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1,380,000
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1,332,000
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Interest expenses
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4,000
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3,000
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8,000
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5,000
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Foreign exchange (gain) loss
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27,000
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110,000
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(14,000)
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77,000
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Net Income (Loss)
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(782,000)
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(436,000)
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(1,399,000)
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(872,000)
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Net Income (Loss ) per share
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$(0.011)
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$(0.006)
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$(0.020)
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$(0.012)
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Note 1:
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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 2:
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We use EBITDA (Earnings before Stock option based compensation,
Interest, Taxes, Depreciation, Amortization and Foreign exchange) as
performance measurements in our financial disclosure. This measure is
not recognized under IFRS. The reconciliations above demonstrate how we
calculate such measurements from our financial statements.
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Financial Position
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November 30,
2013
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February 28,
2014
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May 31,
2014
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(audited)
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(unaudited)
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(unaudited)
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Cash and cash equivalents
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1,565,000
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1,451,000
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1,332,000
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Current assets (other than cash)
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2,175,000
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2,360,000
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2,571,000
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Long-term assets
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6,576,000
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6,019,000
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5,447,000
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Total Assets
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10,316,000
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9,830,000
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9,350,000
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Current liabilities
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1,244,000
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1,170,000
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1,100,000
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Shareholders' equity
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9,072,000
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8,660,000
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8,250,000
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Total Liabilities and Equity
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10,316,000
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9,830,000
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9,350,000
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Number of shares outstanding
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71,682,000
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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 to the global gaming industry best-of-breed table-game
technology-related products that add value and increase client revenue.
DEQ provides table-game-bonusing technology, table games, baccarat
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.