DEQ Reports Revenue of $1.9 Million and EBITDA of $200,000 for the 2014 First Quarter
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.
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