DEQ Reports First Quarter 2013 Financial Results
LEVIS, QC, April 25, 2013 /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, 2013. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website. A conference call will be held on Friday, April 26, 2013 at 11am EST to present and discuss these results. Those interested in participating in the call should dial toll free 1 (800) 896-6826 or (416) 981-9000. A presentation will be available on DEQ's website in the Investors/Financial Reports/Presentation section to support the call content.
2013 FIRST QUARTER RESULTS HIGHLIGHTS:
Financial Metrics
- Revenue
- 31% increase in product rental revenue from $914,000 in Q1-2012 to $1,195,000 in Q1-2013.
- 20% increase in total recurring revenue from $1,227,000 in Q1-2012 to $1,473,000 in Q1-2013.
- 35% increase in gross profit, before non cash items, from 1,060,000 to $1,428,000 in Q1-2013.
- Increase in gross profit margin, before non cash items, from 85% in Q1-2012 to 89% in Q1-2013.
- Operating Costs
- 10% increase in operating costs excluding amortization and stock option expenses from $1,259,000 in Q1-2012 to $1,383,000 in Q1-2013. The majority of this additional cost is explained by professional fees related to the first year IFRS conversion, a corporate project that was terminated in January 2013 and our commercialisation efforts in United States and Asia.
- We foresee the operating costs to remain stable in the coming quarters of 2013 with all installations currently on-going as well as the deployment of two new products in the third and fourth quarter.
- EBITDA
- EBITDA of $44,000 in Q1 2013 for an improvement of $243,000 from a loss of $199,000 in Q1-2012.
- Cash Flow
- Positive cash flow from operating activities of $65,000 in Q1-2013 with an increase in the cash position of $149,000 from $750,000 to $899,000.
Operational Highlights
- As of February 28, 2013, DEQ had 1,800 units worldwide compared to 1,416 units as of February 29, 2012.
- During the first quarter of 2013, a total of 75 net units were installed compared to net installations of 45 units in the prior year quarter. The Company is generating an average recurring net lease of $3,415 per unit per year on its worldwide installed base of 1,800 units for total annual recurring revenue of approximately $6,150,000.
"We are very pleased with our first quarter results, achieving positive EBITDA and free cash flow from operations is on plan with our long-term goals of building DEQ into a substantial player in the gaming technology industry." said Earle G. Hall, President and Chief Executive Officer of DEQ. "We are proud of the hard work and dedication of our team members and we continue to strive to build a strong business for the long-term which is evident in our global reach of more than 60 gaming licenses and our product deployed in more than 30 countries. We continue to add to this growth through new product innovation, and further extending our footprint into new markets."
| Statement of Earnings | |||
| (unaudited) | First Quarter | ||
| Feb. 29, 2012 | Feb. 28, 2013 | ||
| (3 months) | (3 months) | ||
| Product rental | 914,000 | 1,195,000 | |
| Royalties | 313,000 | 278,000 | |
| Total recurring revenue | 1,227,000 | 1,473,000 | |
| Non recurring revenue | 14,000 | 126,000 | |
| Total Revenue | 1,241,000 | 1,599,000 | |
| Gross Profit (1) | 1,060,000 | 1,428,000 | |
| Gross margin % | 85% | 89% | |
| Operating expenses (1) | 1,259,000 | 1,384,000 | |
| EBITDA (2) | (199,000) | 44,000 | |
| Stock based compensation | 24,000 | 11,000 | |
| Amortization and depreciation | 689,000 | 685,000 | |
| Interest (revenue) expenses | 1,000 | 5,000 | |
| Foreign exchange (gain) loss | 27,000 | (26,000) | |
| Comprehensive loss | (940,000) | (631,000) | |
| Net Income (Loss ) per share | $(0.014) | $(0.009) | |
| 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 | |||||
| February 29, 2012 |
November 30, 2012 |
February 28, 2013 |
|||
| (unaudited) | (audited) | (unaudited) | |||
| Cash and cash equivalents | 1,445,000 | 750,000 | 899,000 | ||
| Current assets (other than cash) | 2,076,000 | 1,884,000 | 1,861,000 | ||
| Long-term assets | 10,490,000 | 8,884,000 | 8,326,000 | ||
| Total Assets | 14,011,000 | 11,518,000 | 11,086,000 | ||
| Current liabilities | 1,365,000 | 1,278,000 | 1,467,000 | ||
| Shareholders' equity | 12,646,000 | 10,240,000 | 9,619,000 | ||
| Total Liabilities and Equity | 14,011,000 | 11,518,000 | 11,086,000 | ||
| Number of shares outstanding | 69,182,000 | 69,182,000 | 69,182,000 |
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.
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