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
- Revenue
-
- 29% increase in product rental revenue from $1,195,000 in Q1-2013 to $1,546,000 in Q1-2014.
- 25% increase in total recurring revenue from $1,473,000 in Q1-2013 to $1,836,000 in Q1-2014.
- 14% increase in gross profit, before non cash items, from
1,428,000 to $1,630,000 in
Q1-2014.
- Operating Costs
-
- 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.
- EBITDA
-
- EBITDA of $201,000 in Q1-2014
increased of $157,000 from
$44,000 in Q1-2013.
- Liquidity and Cash Flow
-
- DEQ had a cash position of $1,451,000 as of February
28, 2014.
- 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
- 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.
- 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."
| Statement of Earnings |
|
|
|
|
|
|
|
|
| |
|
First Quarter |
|
Twelve-Month Period |
| |
|
February 28,
2013 |
|
February
28,
2014 |
|
February 28,
2013 |
|
February 28,
2014 |
| |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
| |
|
|
|
|
|
|
|
|
| Product rental |
|
1,195,000 |
|
1,546,000 |
|
4,430,000 |
|
5,833,000 |
| Royalties (1) |
|
278,000 |
|
290,000 |
|
1,122,000 |
|
1,182,000 |
| Total recurring
revenue |
|
1,473,000 |
|
1,836,000 |
|
5,552,000 |
|
7,015,000 |
| Non recurring revenue |
|
126,000 |
|
41,000 |
|
411,000 |
|
267,000 |
| Total Revenue |
|
1,599,000 |
|
1,877,000 |
|
5,963,000 |
|
7,282,000 |
| |
|
|
|
|
|
|
|
|
| Gross Profit
(2) |
|
1,428,000 |
|
1,630,000 |
|
5,161,000 |
|
6,183,000 |
| % Gross margin |
|
89% |
|
87% |
|
87% |
|
85% |
| |
|
|
|
|
|
|
|
|
| Operating expenses
(2) |
|
1,384,000 |
|
1,429,000 |
|
5,415,000 |
|
5,420,000 |
| EBITDA (3) |
|
44,000 |
|
201,000 |
|
(254,000) |
|
763,000 |
| |
|
|
|
|
|
|
|
|
| Stock based compensation |
|
11,000 |
|
7,000 |
|
37,000 |
|
156,000 |
| Amortization expenses |
|
685,000 |
|
661,000 |
|
2,723,000 |
|
2,767,000 |
| Interest expenses |
|
5,000 |
|
2,000 |
|
16,000 |
|
12,000 |
| Foreign exchange (gain) loss |
|
(40,000) |
|
(33,000) |
|
(17,000) |
|
15,000 |
| Net Income (Loss) |
|
(617,000) |
|
(436,000) |
|
(3,013,000) |
|
(2,187,000) |
| Net Income (Loss ) per share |
|
$(0.009) |
|
$(0.006) |
|
$(0.042) |
|
$(0.031) |
| |
|
|
| Note 1: |
|
DEK International - Distributor located in Panama that covers
mostly South America territories. |
| |
|
|
| Note 2: |
|
Gross profit and operating expenses excluded non-cash items
such as depreciation, amortization and stock-based
compensation. |
| |
|
|
| Note 3: |
|
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. |
| Financial Position |
|
|
|
|
|
|
| |
|
February 28,
2013 |
|
November 30,
2013 |
|
February 28,
2014 |
| |
|
(unaudited) |
|
(audited) |
|
(unaudited) |
| |
|
|
|
|
|
|
| Cash and cash equivalents |
|
899,000 |
|
1,565,000 |
|
1,451,000 |
| Current assets (other than
cash) |
|
1,861,000 |
|
2,175,000 |
|
2,360,000 |
| Long-term assets |
|
8,326,000 |
|
6,576,000 |
|
6,019,000 |
| Total Assets |
|
11,086,000 |
|
$10,316,000 |
|
9,830,000 |
| |
|
|
|
|
|
|
| Current liabilities |
|
1,467,000 |
|
1,244,000 |
|
1,170,000 |
| Shareholders' equity |
|
9,619,000 |
|
9,072,000 |
|
8,660,000 |
| Total Liabilities and
Equity |
|
11,086,000 |
|
$10,316,000 |
|
9,830,000 |
| |
|
|
|
|
|
|
| Number of shares outstanding |
|
69,182,000 |
|
71,682,000 |
|
71,682,000 |
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.