VendTek Announces 1st Quarter 2001 Results

SALES FOR 1ST QUARTER 2001 INCREASE 472% OVER 1ST QUARTER 2000



Apr 02, 2001, 01:00 ET from VendTek Systems Inc.

    VANCOUVER, April 2 /PRNewswire/ - VendTek Systems Inc. (CDNX: VSI) a
 leading provider of automated transaction and retailing technologies, today
 reported 1ST quarter financial results for the period ended January 31, 2001.
     Revenue was $1,719,655 for the 1st quarter, an increase of 472% over the
 same period in 2000. Loss for the 1st quarter 2001 declined to $287,858 ($0.03
 loss per share) from $494,075 in the 1st quarter 2000 ($0.06 loss per share).
     "Our first quarter results reflect our focused strategy on developing
 markets for the e-Fresh(TM) network, VendTek's proprietary electronic
 distribution system for reloading prepaid time on cellular phones," said Paul
 Brock President and CEO of VendTek.
 
     The first quarter's key highlights were:
 
     -  The November 1, 2000 sale to ROK Communications Ltd (ROK) for 100
        e-Fresh stations valued at $800,000; and
     -  The December 20, 2000 announcement of a sale to ROK for 200 additional
        e-Fresh stations valued at $1.6 million and for delivery in the 2nd
        quarter.
 
     VendTek derives its revenues from three streams: traditional vending
 products, network-based products (e-Fresh and Smart Card LVD(TM), and
 recurring revenues. Going forward the Company's growth strategy will continue
 to center around the e-Fresh network and the rapidly expanding market for
 prepaid cellular service.
     "For the remainder of 2001, current economic conditions make order flow
 visibility difficult to predict, however, during the year we look to continue
 the roll out of our UK e-Fresh network and we intend to establish an e-Fresh
 presence in another market," continued Mr. Brock. "We also seek to reap the
 rewards from new product offerings in the e-Fresh family. To this end, we
 recently launched two counter-top stations and a point-of-sale terminal
 application that can extend the reach of our e-Fresh network even further."
     Revenues for 1st quarter 2001 are comprised of e-Fresh station sales of
 $787,000 (46%) to the Company's UK customer ROK Communications Ltd., pre-paid
 phone card machine sales of $818,000 and miscellaneous revenue of $114,000.
 Gross margins were 28.5% in the 1st quarter of 2001 versus -10% during the
 same period of 2000. Margins for 2001 would have been higher but for a write-
 down of raw material inventory of $150,000 (8.7%). This write-down reflects
 the further recognition of obsolescent inventory associated with traditional
 products. The negative margin in 2000 resulted from operating a manufacturing
 facility at below economic capacity.
     Expenses grew by $312,000 in 1st quarter 2001 to $774,000 compared with
 expenses of $462,000 in the 1st quarter of 2000. The increase largely reflects
 a $148,000 growth in Product Development expense, due to investment in
 technology, and a $134,000 increase in General and Administration expense, due
 primarily to new personnel, amortization, investor relations, and travel to
 support the growth in sales.
     Additional information concerning the Company's financial position and
 results of its operations for the fiscal year and quarter year ended October
 31, 2000 are included in the Company's Year-end Report, a copy of which can be
 obtained from the Company or accessed via the Company's web site at
 http://www.vendteksys.com/
 
     About e-Fresh
 
     The e-Fresh Network enables cellular service providers to distribute
 prepaid cellular time electronically to consumers via a proprietary real time
 network and self-serve kiosks called e-Fresh Stations. The e-Fresh Network
 consists of a central server running VendTek's transaction processing software
 connected to multiple e-Fresh stations. The network can support tens of
 thousands of stations within a single country. The system includes proprietary
 encryption technology for securing the transmission of the transactions and
 significantly reduces the operating costs for telecom companies, improving
 efficiencies and profits.
 
     About VendTek
 
     VendTek uses its expertise in payment and self-serve technologies, smart
 cards and networking to develop systems for transaction automation. VendTek's
 e-Fresh Network provides electronic distribution of prepaid services such as
 cellular and e-cash to consumers via self-serve ATM style kiosks and a central
 server. VendTek's electronic funds transfer technologies provide a more
 efficient way to distribute services electronically to banked and unbanked
 consumers using self-serve cash or credit-based payments. VendTek's secure
 proprietary system reduces shrinkage, improves access for consumers, increases
 the number of selling outlets and selling hours, and enhances overall security
 making the system superior to traditional distribution and alternative
 channels.
     For more information on the Company please contact David Clark, Chief
 Financial Officer, at 1-604-687-2954; e-mail dclark@vendteksys.com or Dave
 Mason, Investor Relations, Equicom Group, at 1-416-815-0700 ext. 237; e-mail
 dmason@equicomgroup.com
 
     NOTE: The Company relies on litigation protection for "forward-looking"
           statements.
 
     The Canadian Venture Exchange has not reviewed and does not accept
     responsibility for the adequacy of this release.
 
 
 
     VendTek Systems Inc.
     Consolidated Balance Sheets
     As at January 31, 2001 and 2000
     (Unaudited)
                                                      2001               2000
                                                         $                  $
     Assets
       Current Assets
       Cash and equivalents                        205,297            173,500
       Accounts receivable                          23,366            283,991
       Marketable securities                         5,600             10,500
       Inventory                                 1,446,248          1,441,607
       Prepaid expenses                             46,961             10,620
     -------------------------------------------------------------------------
 
                                                 1,727,472          1,920,218
 
     Capital Assets                                288,543            114,542
 
     Mineral Properties                                  -                  2
     -------------------------------------------------------------------------
 
                                                 2,016,015          2,034,762
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Liabilities
     Current Liabilities
       Bank indebtedness                                 -            173,543
       Accounts payable and accrued liabilities    445,970          1,078,994
       Customer deposits                           798,327            327,724
       Due to related parties                       37,132                  -
       Current portion of long-term debt           227,680                  -
     -------------------------------------------------------------------------
 
                                                 1,509,109          1,580,261
     Long-Term Debt                                199,314            250,000
     -------------------------------------------------------------------------
 
                                                 1,708,423          1,830,261
     -------------------------------------------------------------------------
 
     Shareholders' Equity
     Capital Stock                               1,668,600          1,296,779
 
     Deficit                                    (1,361,008)        (1,092,278)
     -------------------------------------------------------------------------
 
                                                   307,592            204,501
     -------------------------------------------------------------------------
 
                                                 2,016,015          2,034,762
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
 
 
     VendTek Systems Inc.
     Consolidated Statements of Operations and Deficit
     For the Three Months Ended January 31, 2001 and 2000
     (Unaudited)
 
 
                                                      2001               2000
                                                         $                  $
 
     Sales                                       1,719,655            300,793
 
     Cost of Goods Sold                          1,233,911            333,610
     -------------------------------------------------------------------------
 
     Gross Profit                                  485,744            (32,817)
     -------------------------------------------------------------------------
 
     Expenses
       General and administrative                  383,044            248,420
       Product development                         273,487            125,360
       Selling and marketing                       117,071             87,478
     -------------------------------------------------------------------------
 
                                                   773,602            461,258
     -------------------------------------------------------------------------
 
     Net Loss For the Period                      (287,858)          (494,075)
 
     Deficit - Beginning of Year                (1,073,150)          (598,203)
     -------------------------------------------------------------------------
 
     Deficit - End of Year                      (1,361,008)        (1,092,278)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Loss Per Share - Basic and Fully Diluted         (.03)              (.06)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
 
 
     VendTek Systems Inc.
     Consolidated Statements of Cash Flows
     For the Three Months Ended January 31, 2001 and 2000
     (Unaudited)
 
                                                      2001               2000
                                                         $                  $
     Operating Activities
       Net loss for the period                    (287,858)          (494,075)
 
       Item not involving cash
 
         Amortization                               22,168              9,192
 
       Net change in non-cash working
        capital items                             (916,387)           367,761
     -------------------------------------------------------------------------
 
     Cash To Operating Activities               (1,182,077)          (117,122)
     -------------------------------------------------------------------------
 
     Financing Activity
       Repayment of long-term debt,
        net of proceeds                            (48,473)                 -
     -------------------------------------------------------------------------
 
     Investing Activities
       Purchase of capital assets                  (27,626)           (37,500)
       Purchase of domain names and patent costs      (283)           (18,089)
     -------------------------------------------------------------------------
 
                                                   (27,909)           (55,589)
     -------------------------------------------------------------------------
 
     Decrease in Cash and Equivalents During
      the Period                                (1,258,459)          (172,711)
 
     Cash and Equivalents - Beginning of Period  1,463,756            172,668
     -------------------------------------------------------------------------
 
     Cash and Equivalents - End of Period          205,297                (43)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Cash and Equivalents are Comprised of:
 
       Cash in bank and on hand                    205,297            173,500
       CIBC operating line of credit                     -           (173,543)
     -------------------------------------------------------------------------
 
                                                   205,297                (43)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Non-Cash Financing Activities                       -                  -
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Supplemental Disclosures
 
       Cash paid - Income tax                            -                  -
       Cash paid - Interest                          4,276              3,338
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
 
 

SOURCE VendTek Systems Inc.
    VANCOUVER, April 2 /PRNewswire/ - VendTek Systems Inc. (CDNX: VSI) a
 leading provider of automated transaction and retailing technologies, today
 reported 1ST quarter financial results for the period ended January 31, 2001.
     Revenue was $1,719,655 for the 1st quarter, an increase of 472% over the
 same period in 2000. Loss for the 1st quarter 2001 declined to $287,858 ($0.03
 loss per share) from $494,075 in the 1st quarter 2000 ($0.06 loss per share).
     "Our first quarter results reflect our focused strategy on developing
 markets for the e-Fresh(TM) network, VendTek's proprietary electronic
 distribution system for reloading prepaid time on cellular phones," said Paul
 Brock President and CEO of VendTek.
 
     The first quarter's key highlights were:
 
     -  The November 1, 2000 sale to ROK Communications Ltd (ROK) for 100
        e-Fresh stations valued at $800,000; and
     -  The December 20, 2000 announcement of a sale to ROK for 200 additional
        e-Fresh stations valued at $1.6 million and for delivery in the 2nd
        quarter.
 
     VendTek derives its revenues from three streams: traditional vending
 products, network-based products (e-Fresh and Smart Card LVD(TM), and
 recurring revenues. Going forward the Company's growth strategy will continue
 to center around the e-Fresh network and the rapidly expanding market for
 prepaid cellular service.
     "For the remainder of 2001, current economic conditions make order flow
 visibility difficult to predict, however, during the year we look to continue
 the roll out of our UK e-Fresh network and we intend to establish an e-Fresh
 presence in another market," continued Mr. Brock. "We also seek to reap the
 rewards from new product offerings in the e-Fresh family. To this end, we
 recently launched two counter-top stations and a point-of-sale terminal
 application that can extend the reach of our e-Fresh network even further."
     Revenues for 1st quarter 2001 are comprised of e-Fresh station sales of
 $787,000 (46%) to the Company's UK customer ROK Communications Ltd., pre-paid
 phone card machine sales of $818,000 and miscellaneous revenue of $114,000.
 Gross margins were 28.5% in the 1st quarter of 2001 versus -10% during the
 same period of 2000. Margins for 2001 would have been higher but for a write-
 down of raw material inventory of $150,000 (8.7%). This write-down reflects
 the further recognition of obsolescent inventory associated with traditional
 products. The negative margin in 2000 resulted from operating a manufacturing
 facility at below economic capacity.
     Expenses grew by $312,000 in 1st quarter 2001 to $774,000 compared with
 expenses of $462,000 in the 1st quarter of 2000. The increase largely reflects
 a $148,000 growth in Product Development expense, due to investment in
 technology, and a $134,000 increase in General and Administration expense, due
 primarily to new personnel, amortization, investor relations, and travel to
 support the growth in sales.
     Additional information concerning the Company's financial position and
 results of its operations for the fiscal year and quarter year ended October
 31, 2000 are included in the Company's Year-end Report, a copy of which can be
 obtained from the Company or accessed via the Company's web site at
 http://www.vendteksys.com/
 
     About e-Fresh
 
     The e-Fresh Network enables cellular service providers to distribute
 prepaid cellular time electronically to consumers via a proprietary real time
 network and self-serve kiosks called e-Fresh Stations. The e-Fresh Network
 consists of a central server running VendTek's transaction processing software
 connected to multiple e-Fresh stations. The network can support tens of
 thousands of stations within a single country. The system includes proprietary
 encryption technology for securing the transmission of the transactions and
 significantly reduces the operating costs for telecom companies, improving
 efficiencies and profits.
 
     About VendTek
 
     VendTek uses its expertise in payment and self-serve technologies, smart
 cards and networking to develop systems for transaction automation. VendTek's
 e-Fresh Network provides electronic distribution of prepaid services such as
 cellular and e-cash to consumers via self-serve ATM style kiosks and a central
 server. VendTek's electronic funds transfer technologies provide a more
 efficient way to distribute services electronically to banked and unbanked
 consumers using self-serve cash or credit-based payments. VendTek's secure
 proprietary system reduces shrinkage, improves access for consumers, increases
 the number of selling outlets and selling hours, and enhances overall security
 making the system superior to traditional distribution and alternative
 channels.
     For more information on the Company please contact David Clark, Chief
 Financial Officer, at 1-604-687-2954; e-mail dclark@vendteksys.com or Dave
 Mason, Investor Relations, Equicom Group, at 1-416-815-0700 ext. 237; e-mail
 dmason@equicomgroup.com
 
     NOTE: The Company relies on litigation protection for "forward-looking"
           statements.
 
     The Canadian Venture Exchange has not reviewed and does not accept
     responsibility for the adequacy of this release.
 
 
 
     VendTek Systems Inc.
     Consolidated Balance Sheets
     As at January 31, 2001 and 2000
     (Unaudited)
                                                      2001               2000
                                                         $                  $
     Assets
       Current Assets
       Cash and equivalents                        205,297            173,500
       Accounts receivable                          23,366            283,991
       Marketable securities                         5,600             10,500
       Inventory                                 1,446,248          1,441,607
       Prepaid expenses                             46,961             10,620
     -------------------------------------------------------------------------
 
                                                 1,727,472          1,920,218
 
     Capital Assets                                288,543            114,542
 
     Mineral Properties                                  -                  2
     -------------------------------------------------------------------------
 
                                                 2,016,015          2,034,762
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Liabilities
     Current Liabilities
       Bank indebtedness                                 -            173,543
       Accounts payable and accrued liabilities    445,970          1,078,994
       Customer deposits                           798,327            327,724
       Due to related parties                       37,132                  -
       Current portion of long-term debt           227,680                  -
     -------------------------------------------------------------------------
 
                                                 1,509,109          1,580,261
     Long-Term Debt                                199,314            250,000
     -------------------------------------------------------------------------
 
                                                 1,708,423          1,830,261
     -------------------------------------------------------------------------
 
     Shareholders' Equity
     Capital Stock                               1,668,600          1,296,779
 
     Deficit                                    (1,361,008)        (1,092,278)
     -------------------------------------------------------------------------
 
                                                   307,592            204,501
     -------------------------------------------------------------------------
 
                                                 2,016,015          2,034,762
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
 
 
     VendTek Systems Inc.
     Consolidated Statements of Operations and Deficit
     For the Three Months Ended January 31, 2001 and 2000
     (Unaudited)
 
 
                                                      2001               2000
                                                         $                  $
 
     Sales                                       1,719,655            300,793
 
     Cost of Goods Sold                          1,233,911            333,610
     -------------------------------------------------------------------------
 
     Gross Profit                                  485,744            (32,817)
     -------------------------------------------------------------------------
 
     Expenses
       General and administrative                  383,044            248,420
       Product development                         273,487            125,360
       Selling and marketing                       117,071             87,478
     -------------------------------------------------------------------------
 
                                                   773,602            461,258
     -------------------------------------------------------------------------
 
     Net Loss For the Period                      (287,858)          (494,075)
 
     Deficit - Beginning of Year                (1,073,150)          (598,203)
     -------------------------------------------------------------------------
 
     Deficit - End of Year                      (1,361,008)        (1,092,278)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Loss Per Share - Basic and Fully Diluted         (.03)              (.06)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
 
 
     VendTek Systems Inc.
     Consolidated Statements of Cash Flows
     For the Three Months Ended January 31, 2001 and 2000
     (Unaudited)
 
                                                      2001               2000
                                                         $                  $
     Operating Activities
       Net loss for the period                    (287,858)          (494,075)
 
       Item not involving cash
 
         Amortization                               22,168              9,192
 
       Net change in non-cash working
        capital items                             (916,387)           367,761
     -------------------------------------------------------------------------
 
     Cash To Operating Activities               (1,182,077)          (117,122)
     -------------------------------------------------------------------------
 
     Financing Activity
       Repayment of long-term debt,
        net of proceeds                            (48,473)                 -
     -------------------------------------------------------------------------
 
     Investing Activities
       Purchase of capital assets                  (27,626)           (37,500)
       Purchase of domain names and patent costs      (283)           (18,089)
     -------------------------------------------------------------------------
 
                                                   (27,909)           (55,589)
     -------------------------------------------------------------------------
 
     Decrease in Cash and Equivalents During
      the Period                                (1,258,459)          (172,711)
 
     Cash and Equivalents - Beginning of Period  1,463,756            172,668
     -------------------------------------------------------------------------
 
     Cash and Equivalents - End of Period          205,297                (43)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Cash and Equivalents are Comprised of:
 
       Cash in bank and on hand                    205,297            173,500
       CIBC operating line of credit                     -           (173,543)
     -------------------------------------------------------------------------
 
                                                   205,297                (43)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Non-Cash Financing Activities                       -                  -
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Supplemental Disclosures
 
       Cash paid - Income tax                            -                  -
       Cash paid - Interest                          4,276              3,338
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
 
 SOURCE VendTek Systems Inc.