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
| - Revenue |
| |
|
|
Second Quarter:
- 19% increase in product rental revenue to $1,602,000 in
Q2-2014.
- 13% increase in total recurring revenue to $1,853,000 in
Q2-2014.
- 12% increase in total revenue to $1,926,000 in Q2-2014.
|
|
Six-Month Period:
- 24% increase in product rental revenue to $3,149,000 in
2014.
- 19% increase in total recurring revenue to $3,690,000 in
2014.
- 15% increase in total revenue to $3,803,000 in 2014.
|
| |
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. |
| |
|
|
- Operating Expenses before non-cash items
- 1% decrease in operating expenses to $1,355,000 in
Q2-2014.
- 1% increase in operating expenses for the six-month period to
$2,783,000 in 2014.
- Operating costs should remain relatively stable in 2014.
|
|
- EBITDA
- EBITDA of $354,000 in Q2-2014 compared to $79,000 in Q2-2013,
an increase of $275,000.
- 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.
|
| |
|
| |
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. |
| |
|
- Cash Flow
- 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.
|
Second Quarter Highlights and Subsequent
Events
- As of May 31, 2014, DEQ had 2,065
units worldwide compared to 1,933 units as of May 31, 2013.
- 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."
| Statement of
Earnings |
| (unaudited) |
Second Quarter |
|
Six-Month Period |
| |
May 31, 2013 |
|
May 31,
2014 |
|
May 31, 2013 |
|
May 31,
2014 |
| |
|
|
|
|
|
|
|
| Product rental |
1,341,000 |
|
1,602,000 |
|
2,536,000 |
|
3,149,000 |
| Royalties |
294,000 |
|
251,000 |
|
572,000 |
|
541,000 |
| Total recurring
revenue |
1,635,000 |
|
1,853,000 |
|
3,108,000 |
|
3,690,000 |
| Non-recurring revenue |
79,000 |
|
73,000 |
|
205,000 |
|
113,000 |
| Total Revenue |
1,714,000 |
|
1,926,000 |
|
3,313,000 |
|
3,803,000 |
| |
|
|
|
|
|
|
|
| Gross Profit
(1) |
1,442,000 |
|
1,708,000 |
|
2,869,000 |
|
3,338,000 |
| % Gross margin |
84% |
|
89% |
|
87% |
|
88% |
| |
|
|
|
|
|
|
|
| Operating expenses
(1) |
1,363,000 |
|
1,354,000 |
|
2,747,000 |
|
2,824,000 |
| |
|
|
|
|
|
|
|
| EBITDA (2) |
79,000 |
|
354,000 |
|
122,000 |
|
555,000 |
| |
|
|
|
|
|
|
|
| Stock based compensation |
136,000 |
|
6,000 |
|
147,000 |
|
13,000 |
| Amortization expenses |
694,000 |
|
671,000 |
|
1,380,000 |
|
1,332,000 |
| Interest expenses |
4,000 |
|
3,000 |
|
8,000 |
|
5,000 |
| Foreign exchange (gain) loss |
27,000 |
|
110,000 |
|
(14,000) |
|
77,000 |
| Net Income (Loss) |
(782,000) |
|
(436,000) |
|
(1,399,000) |
|
(872,000) |
| Net Income (Loss ) per share |
$(0.011) |
|
$(0.006) |
|
$(0.020) |
|
$(0.012) |
| |
|
|
| Note 1: |
|
Gross profit and operating expenses excluded non-cash items
such as depreciation, amortization and stock based
compensation. |
| |
|
|
| Note 2: |
|
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. |
| Financial
Position |
| |
November 30,
2013 |
|
February 28,
2014 |
|
May
31,
2014 |
| |
(audited) |
|
(unaudited) |
|
(unaudited) |
| |
|
|
|
|
|
| Cash and cash equivalents |
1,565,000 |
|
1,451,000 |
|
1,332,000 |
| Current assets (other than
cash) |
2,175,000 |
|
2,360,000 |
|
2,571,000 |
| Long-term assets |
6,576,000 |
|
6,019,000 |
|
5,447,000 |
| Total Assets |
10,316,000 |
|
9,830,000 |
|
9,350,000 |
| |
|
|
|
|
|
| Current liabilities |
1,244,000 |
|
1,170,000 |
|
1,100,000 |
| Shareholders' equity |
9,072,000 |
|
8,660,000 |
|
8,250,000 |
| Total
Liabilities and Equity |
10,316,000 |
|
9,830,000 |
|
9,350,000 |
| |
|
|
|
|
|
| Number of shares outstanding |
71,682,000 |
|
71,682,000 |
|
71,682,000 |
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.