LAS VEGAS, NV and LEVIS, QC, March 29, 2016 /CNW Telbec/ - DEQ Systems Corp. (TSXV: DEQ) ("DEQ" or the "Company") announced today the filing of its annual financial results for the fiscal year ended November 30, 2015. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website and should be read in conjunction with this press release. A conference call will be held on Thursday, March 31, 2016 at 8:30am EDT to present and discuss these results. Those interested in participating should dial toll free 1 (877) 223-4471 or (647) 788-4922. Please note that the conference call replay will be available until April 14, 2016 by dialing 1 (416) 621-4642 or 1 (800) 585-8367.  The conference ID # for the replay is 76163886.

2015 ANNUAL RESULTS AND FOURTH QUARTER SUMMARY:

Financial Metrics

• Revenue
  • 20% increase in total revenue to $9,082,000 in 2015 as compared to $7,540,000 in 2014.
  • 13% increase in table systems to $5,899,000 in 2015 as compared to $5,209,000 in 2014.
  • 23% increase in proprietary table games to $2,751,000 in 2015 as compared to $2,228,000 in 2014.
  • Q4-15 Revenue increased $422,000, 22% compared to Q4-14.
    
• Operating Expenses
  • Operating and administrative expenses increased by 17%, to $8,475,000 from $7,227,000 in 2014. These increases were substantially related to professional fees and outside services related to the settlement of the Talisman litigation, higher licensing and compliance fees, costs associated with the reconstitution of the Board of Directors, costs related to DEQ's corporate office restructuring, and a contingency reserve related to potential sales and/or use tax.
  • Research and development expenses increased to $1,253,000 compared to $894,000 in 2014, an increase of 40%. These increases resulted from DEQ's continuing efforts to expand its new table game products and enhance its existing offerings. 
    
• EBITDA
  • DEQ recorded EBITDA of ($148,000) in 2015 compared to $1,008,000 in 2014. For the fourth quarter of 2015, DEQ recorded EBITDA of ($845,000) compared to $148,000 in the fourth quarter of 2014.
  • 2015 EBITDA was significantly burdened with higher operating and administrative expenses primarily attributed to certain non-routine and/or non-recurring expenses summarized as follows:
    • $287,000 in severance benefits related to DEQ's planned corporate office relocation.  
    • $112,000 for prior board member exit packages related to the reconstitution of DEQ's Board of Directors.
    • $157,000 of incremental legal cost related to the Talisman litigation.
    • $216,000 impairment write-down related to equipment / products for lease.
    • $391,000 of incremental outside professional services, including licensing and compliance, related to DEQ's corporate and organizational restructuring.
    • $414,000 associated with a multi-year reserve for potential sales and/or use tax related to lease equipment revenue in certain jurisdictions located in the United States.
      
• Liquidity and Cash Flow
  • During fiscal year 2015, DEQ's cash position increased by $896,000 primarily attributed to cash flow from operating activities (inclusive of the net change in working capital items), the impact of foreign currency exchange rate changes, and positive cash flow from investment activities.
  • DEQ had a cash position of $2,550,000 as of November 30, 2015.
    
• Operational Highlights
  • As of November 30, 2015, DEQ had 2,293 installed products worldwide – directly and through global distribution partners. This compares to 2,185 installed products as of November 30, 2014.

"The milestones that we have achieved during this transformational year were significant and necessary. Our recurring revenue model allows us to make this transformation with our eye towards the long term. When evaluated on a year over year basis, and factoring out non-routine / non-recurring charges, and currency translation, our performance showed growth and continues our positive year over year trend. The costs associated with our efforts to right size the business have been significant, but lay the foundation for a healthy company going forward. Through all of this change we focused on growing top line revenues and our installed base as well as increasing our cash position. We focused on growing our product offerings and added new PTG content and released our upgraded progressive platform, PRSM. We set out to build a better more robust company and have done so with core staff and products," stated Joe Bertolone, President and Chief Executive Officer of DEQ.

Mr. Bertolone further stated, "DEQ's hard work and positioning efforts during 2015 will allow 2016 to be a basis year for growth. We estimate that revenues will grow in a range commensurate with prior year performance on an annualized year over year basis. As our cost normalize, our work positioning DEQ for future growth will begin to pay off in the second half of 2016."

ABOUT DEQ

DEQ Systems Corp. (TSXV: DEQ) is one of the market leaders in Table Game Systems, Proprietary Table Games, and Utility solutions. DEQ's systems and games are installed in over 300 casinos, in 30 countries around the world. The combination of our services, industry leading products and revenue generation capabilities make DEQ a leader for innovation in the table game bonusing segment of the global gaming market. For further information, please visit www.deq.com.

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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.