DEQ Reports Revenue of $2.3 Million and EBITDA of $225,000 for the 2015 Third Quarter
LAS VEGAS, NV and LEVIS, QC, Oct. 28, 2015 /PRNewswire/ - DEQ Systems Corp. (TSXV: DEQ) ("DEQ" or the "Company") announces the filing of its third quarter financial results for the period ended August 31, 2015. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website. A conference call will be held on Thursday, October 29, 2015 at 4:30 pm ET 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. Please note that the conference call replay will be available until November 12, 2015 by dialing (416) 621-4642 or 1 (800) 585-8367. The conference ID # for the replay is 60956941.
2015 THIRD QUARTER RESULTS HIGHLIGHTS:
Financial Metrics
- Revenue
- Table systems revenue of $1,517,000 in Q3-2015 compared to $1,241,000 in Q3-2014, a 22% increase.
- Proprietary table games revenue of $700,000 in Q3-2015 compared to $546,000 in Q3-2014, a 28% increase.
- Total revenues of $2,307,000 in Q3-2015, up from $1,810,000 in Q3-2014, an increase of 27%.
- Gross profit of $2,054,000 in Q3-2015, up from $1,499,000 in Q3-2014, an increase of 37%.
- Operating Costs
- Operating costs increased to $2,353,000 in Q3-2015 compared to $1,879,000 in Q3-2014, mainly due to professional fees and outside services comprised of costs related to the settlement of the Talisman litigation, higher licensing and compliance fees, costs associated with changes to the Board of Directors, and other costs related to DEQ's corporate office restructuring.
- EBITDA
- EBITDA of $225,000 in Q3-2015 compared to $305,000 in Q3-2014, and $273,000 in Q2-2015.
- Liquidity and Cash Flow
- DEQ had a cash position of $2,733,000 as of August 31, 2015 compared to $1,654,000 as of November 30, 2014.
- Positive cash flow from operating activities of $1,091,000 in the first 9 months of 2015 compared to $440,000 in the same 9-month period of 2014.
Operational Highlights
- As of August 31, 2015, DEQ had 2,322 units deployed worldwide (1,944 units installed directly and 378 units installed indirectly by our distributors) compared to 2,106 units worldwide as of August 31, 2014.
- During the third quarter of 2015, the company saw a decline of 26 net units primarily due to removals of complimentary game equipment. Unit installs of our key products (G3, EZ Baccarat and EZ Trak) were stable during the quarter with a slight net increase compared to the previous sequential quarter.
"We continue to execute our strategic plan as outlined at the beginning of the year, and our products continue to make money for our customers," stated Joe Bertolone, President and Chief Executive Officer of DEQ. "As we expand our presence in North America, we look forward to stronger growth into existing and new regional markets. Despite the one-time costs associated with restructuring and litigation fees, we had a strong quarter as evidenced by our strong margin, and year over year revenue and cash balance growth."
| Statement of Earnings |
||||
| Third Quarter |
Nine-Month Period |
|||
| August 31, 2015 |
August 31, 2014 |
August 31, 2015 |
August 31, 2014 |
|
| (unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
| Table Systems |
1,517,000 |
1,241,000 |
4,362,000 |
3,890,000 |
| Proprietary Table Games |
700,000 |
546,000 |
1,947,000 |
1,636,000 |
| Total recurring revenue |
2,217,000 |
1,787,000 |
6,309,000 |
5,526,000 |
| Non recurring revenue |
90,000 |
23,000 |
424,000 |
87,000 |
| Total Revenue |
2,307,000 |
1,810,000 |
6,733,000 |
5,613,000 |
| Gross Profit |
2,054,000 |
1,499,000 |
5,680,000 |
4,638,000 |
| % Gross margin |
89% |
83% |
84% |
83% |
| Operating expenses |
2,353,000 |
1,879,000 |
6,848,000 |
5,808,000 |
| Operating Income (Loss) |
(299,000) |
(380,000) |
(1,169,000) |
(1,170,000) |
| Financial expenses (revenue) |
125,000 |
65,000 |
(26,000) |
148,000 |
| Net Income (Loss) |
(424,000) |
(445,000) |
(1,142,000) |
(1,318,000) |
| Net Income (Loss ) per share |
$(0.006) |
$(0.006) |
$(0.016) |
$(0.018) |
| EBITDA Reconciliation to Net Income |
||||
| Third Quarter |
Nine-Month Period |
|||
| August 31, 2015 |
August 31, 2014 |
August 31, 2015 |
August 31, 2014 |
|
| (unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
| Net Income (Loss) |
(424,000) |
(446,000) |
(1,142,000) |
(1,318,000) |
| Add/(Subtract): |
||||
| Interest Expense (Revenue) |
0 |
3,000 |
3,000 |
7,000 |
| Foreign Exchange Loss (Gain) |
125,000 |
63,000 |
(29,000) |
141,000 |
| Depreciation & Amortization |
497,000 |
679,000 |
1,785,000 |
2,011,000 |
| Stock-Based Compensation |
27,000 |
6,000 |
80,000 |
19,000 |
| EBITDA |
225,000 |
305,000 |
697,000 |
860,000 |
| Note: |
DEQ uses an adjusted calculation of EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization and stock based compensation 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 |
|||||
| August 31, |
November 30, (audited) |
||||
| Cash and cash equivalents |
$2,733,000 |
$1,654,000 |
|||
| Current assets (other than cash) |
1,838,000 |
1,571,000 |
|||
| Long-term assets |
3,704,000 |
5,479,000 |
|||
| Total Assets |
$8,275,000 |
$8,704,000 |
|||
| Current liabilities |
$1,544,000 |
$1,275,000 |
|||
| Shareholders' equity |
6,731,000 |
7,429,000 |
|||
| Total Liabilities and Equity |
$8,275,000 |
$8,704,000 |
|||
| Number of shares outstanding |
71,682,000 |
71,682,000 |
|||
ABOUT DEQ
DEQ Systems Corp. (TSXV: DEQ) is a market leader in Table Games, Progressive Systems, live and online Proprietary Table Games content and Utility solutions. DEQ's systems and games are installed in over 300 casinos, in 30 countries around the world. The combination of our services, industry leading products and revenue generation capabilities make DEQ a leader for innovation in the table game bonusing segment of the global gaming market. 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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