DEQ Systems Corp. (TSX VENTURE:DEQ) announced today the filing of its annual
financial results for the year ended November 30, 2009. The Consolidated
Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website. A
conference call will be held on Friday, February 26, 2010 at 11am EST to present
and discuss these results. Those interested in participating should dial toll
free 1 (888) 612-1047 or (416) 359-1270. A visual presentation (Powerpoint) will
be available on DEQ's website (www.deq.com) in the Invest/Financial
Reports/PowerPoint section to support the call content.
2009 ANNUAL RESULTS HIGHLIGHTS:
Financial Metrics
-- Revenue
-- 42% growth in recurring revenue from $2.62 M in 2008 to $3.71 M in
2009
-- 15% increase in gross profit from $3.29 M in 2008 to $3.80 M
-- 86% gross margin compared to 81% in 2008 due to increase in
recurring revenue
-- EBITDA
-- Positive EBITDA of $533,000 in 2009 compared to a loss of $241,000
in 2008
-- This is a net increase of $774,000 when compared to year 2008
-- Operating Costs
-- 8% decrease in annual operating costs from $3.54 M in 2008 to $3.26
M in 2009
Operational Highlights
-- LTE
-- LTE for Q4 was 1,238 in 2009 compared to 1,029 in Q4 2008
LTE (lease table equivalent) is calculated using the quarterly
recurring revenue divided by $3,000.
-- Product Installations
-- During the fourth quarter, DEQ had 67 new installations for a total
of new installs in 2009 in the USA and Canada of 207 new
installations
-- The fourth quarter installations were done across North America and
included major installations completed in September at Chukchansi
Casino (20 G3 tables) and Treasure Island (11 G3 tables)
-- Recent News Releases and Information of Interest
-- Commerce Casino installs 15 EZ Baccarat and 15 EZ Trak
-- Monte Carlo in Las Vegas goes G3 on its poker derivative games with
the installation of 5 tables
-- Chukchansi Casino installs 20 G3 Systems
-- Treasure Island installs 11 G3 on its poker games
-- Pala Casino installs 10 EZ units
-- MGM Grand installs 8 G3 on its poker games
"2009 was DEQ's first year of North American commercialization and we are more
than confident in saying that our products are accepted by the industry and
penetrating the market at an encouraging pace", stated Earle G. Hall, President
& CEO of DEQ. In mid 2008 we received our first product certification in Nevada
and began precommercialization of several product lines. At the same time we
began applying for the jurisdictional licenses that are mandatory to
commercialize in the targeted jurisdictions. We are very proud to say that we
now have 23 jurisdictional licenses in North America with more than 325 products
installed in 65 casinos in our first year of commercialization."
Statement of Earnings
Nov. 30, 2007 Nov. 30, 2008 Nov. 30, 2009
(Audited) (Audited) (Audited)
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Revenues
Recurring revenue
(1) 2,250,104 2,615,144 3,712,453
Non recurring
revenue 1,331,046 1,471,610 706,612
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3,581,150 4,086,754 4,419,065
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Gross Profit 2,754,610 3,296,126 3,795,561
% Gross Margin 77% 81% 86%
Operational Costs (2) (3,204,744) (3,537,478) (3,262,915)
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EBITDA (3) (450,134) (241,352) 532,646
Amortization and
depreciation (4) (562,754) (1,132,695) (2,228,494)
Other items (693,553) (135,570) 127,705
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Net income (loss) (1,706,441) (1,509,617) (1,568,143)
Net income (loss) per
share $(0.030) $(0.022) $(0.023)
Additional
information
Recurring Revenue 2,250,104 2,615,144 3,712,453
% Annual Growth 27% 16% 42%
Note 1: Recurring revenue is comprised of Royalties and Equipment rental.
Note 2: Operating costs exclude stock option based compensation.
Note 3: We use EBITDA (Earnings before Stock option based compensation,
Interest, Taxes, Depreciation and Amortization) as performance measurements
in our financial disclosure. This measure is not recognized under generally
accepted accounting principles. The reconciliations above demonstrate how we
calculate such measurements from our financial statements.
Note 4: Amortization expense has significantly increased in 2009 explained
by the amortization of the licensing rights acquired in July 2008 for an
amount of $12 M. These licensing rights are amortized over seven years at a
rate of $422,000 per quarter or $1,687,000 per year. In 2008, the Company
had recognized only four months of amortization on the licensing rights
which represents $564,000 compared with $1,692,000 in 2009 which explains
the increased.
Balance Sheets Nov. 30, 2007 Nov. 30, 2008 Nov. 30, 2009
(Audited) (Audited) (Audited)
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Cash and cash
equivalents 11,364,112 6,593,357 5,828,981
Current assets (other 2,180,534 1,860,176 1,696,490
than cash)
Long-term assets 9,187,762 17,139,836 14,816,416
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Total Assets $22,732,408 $25,593,369 $22,341,887
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Current liabilities 1,716,162 2,734,291 2,175,579
Long-term liabilities 577,073 2,725,668 1,348,101
Shareholders' equity 20,439,173 20,133,410 18,818,207
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Total Liabilities and
Equity $22,732,408 $25,593,369 $22,341,887
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Number of shares 69,350,794 70,416,315 69,589,815
outstanding
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ABOUT DEQ
Founded in 1998, DEQ Systems Corp. (TSX VENTURE:DEQ) is a leader in the table
game bonusing technology field. DEQ's patents, products and features include
side bet bonusing games with progressive and random jackpot prizes, slot machine
style mystery bonusing, multiple credit and denomination betting flexibility,
dealer hand betting, electronic credit bank, electronic rake, baccarat hand
tracking, multimedia animation and sound effects. DEQ has an extensive patent
portfolio that is recognized in more than 40 countries such as the USA, Macau,
Australia and Canada. DEQ's bonusing solutions and products are present in more
than 200 casinos in over 30 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.