DEQ Reports Revenue of $2.3 Million and EBITDA of $273,000 for the 2015 Second Quarter
LEVIS,QC and LAS VEGAS, NV, July 30, 2015 /PRNewswire/ - DEQ Systems Corp. (TSX-V: DEQ) ("DEQ" or the "Company") announces the filing of its second quarter financial results for the period ended May 31, 2015. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website. A conference call will be held on Friday, July 31, 2015 at 8:30 am 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 August 14, 2015 by dialing 1 (416) 621-4642 or 1 (800) 585-8367. The passcode for the replay is 93819011.
2015 SECOND QUARTER RESULTS HIGHLIGHTS:
Financial Metrics
- Revenue
- 11% increase in table systems revenue from $1,327,000 in Q2-2014 to $1,467,000 in Q2-2015.
- 14% increase in proprietary table games revenue from $561,000 in Q2-2014 to $641,000 in Q2-2015.
- 20% increase in total revenues from $1,926,000 in Q2-2014 to $2,304,000 in Q2-2015.
- 11% increase in gross profit, before non-cash items, from $1,709,000 in Q2-2014 to $1,898,000 in Q2-2015.
- Operating Costs
- Operating costs excluding amortization and stock option expenses increased from $1,355,000 in Q2-2014 to $1,625,000 in Q2-2015, mostly due to increased professional fees related to the Talisman litigation and from costs related to increasing the depth of our R&D and operational resources.
- EBITDA
- EBITDA of $273,000 in Q2-2015 compared to $354,000 in Q2-2014 and $199,000 in Q1-2015.
- Liquidity and Cash Flow
- DEQ had a cash position of $2,221,000 as of May 31, 2015 compared to $1,654,000 as of November 30, 2014.
- Positive cash flow from operating activities before changes in non-cash working capital items of $675,000 in the first 6 months of 2015 compared to $535,000 in the same 6-month period of 2014.
Operational Highlights
- As of May 31, 2015, DEQ had 2,348 units worldwide (1,980 units installed directly and 368 units installed by our distributors) compared to 2,065 units worldwide as of May 31, 2014.
- During the second quarter of 2015, a total of 97 net units were installed compared to a net decline in installations of 24 units in the prior year second quarter. The Company is generating an average recurring net lease of $3,580 per unit per year on its worldwide installed base of 2,348 units.
"DEQ made meaningful progress in executing our strategic plan in the second quarter," stated Joe Bertolone, President and Chief Executive Officer of DEQ. "The Company continued to build on its operating momentum and invest in our human resources wisely. I am confident that we will continue to make progress in strategically positioning our company for continued growth."
| Statement of Earnings |
|||||||
| Second Quarter |
Six-Month Period |
||||||
| May 31, 2014 |
May 31, 2015 |
May 31, 2014 |
May 31, 2015 |
||||
| (unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
||||
| Table Systems |
1,327,000 |
1,467,000 |
2,649,000 |
2,845,000 |
|||
| Proprietary Table Games |
561,000 |
642,000 |
1,090,000 |
1,247,000 |
|||
| Total recurring revenue |
1,888,000 |
2,109,000 |
3,739,000 |
4,092,000 |
|||
| Non recurring revenue |
38,000 |
195,000 |
64,000 |
334,000 |
|||
| Total Revenue |
1,926,000 |
2,304,000 |
3,803,000 |
4,426,000 |
|||
| Gross Profit (1) |
1,709,000 |
1,898,000 |
3,338,000 |
3,786,000 |
|||
| % Gross margin |
89% |
88% |
88% |
86% |
|||
| Operating expenses (1) |
1,355,000 |
1,625,000 |
2,783,000 |
3,314,000 |
|||
| EBITDA (2) |
354,000 |
273,000 |
555,000 |
472,000 |
|||
| Stock based compensation |
6,000 |
45,000 |
13,000 |
53,000 |
|||
| Depreciation & Amortization expenses |
671,000 |
635,000 |
1,331,000 |
1,288,000 |
|||
| Financial expenses (revenue) |
3,000 |
1,000 |
5,000 |
3,000 |
|||
| Foreign exchange (gain) loss |
110,000 |
155,000 |
78,000 |
(154,000) |
|||
| Net Income (Loss) |
(436,000) |
(563,000) |
(872,000) |
(718,000) |
|||
| Net Income (Loss ) per share |
$(0.006) |
$(0.008) |
$(0.012) |
$(0.010) |
|||
| Note 1: |
Gross profit and operating expenses excluding non-cash items such as depreciation, amortization and stock-based compensation. |
| Note 2: |
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 |
|||||||||||
| May 31, 2014 |
November 30, 2014 |
May 31, 2015 |
|||||||||
| (unaudited) |
(audited) |
(unaudited) |
|||||||||
| Cash and cash equivalents |
$1,332,000 |
$1,654,000 |
$2,221,000 |
||||||||
| Current assets (other than cash) |
2,612,000 |
1,571,000 |
1,964,000 |
||||||||
| Long-term assets |
5,448,000 |
5,479,000 |
4,132,000 |
||||||||
| Total Assets |
$9,391,000 |
$8,704,000 |
$8,317,000 |
||||||||
| Current liabilities |
1,100,000 |
1,275,000 |
1,490,000 |
||||||||
| Shareholders' equity |
8,291,000 |
7,429,000 |
6,827,000 |
||||||||
| Total Liabilities and Equity |
$9,391,000 |
$8,704,000 |
$8,317,000 |
||||||||
| 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 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 300 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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