DEQ Reports Revenue of $7.5 Million and EBITDA of $1,008,000 for the Year Ended November 30, 2014
LEVIS, QC, March 17, 2015 /PRNewswire/ - DEQ Systems Corp. (TSXV: DEQ) ("DEQ" or the "Company") announced today the filing of its annual financial results for the fiscal year ended November 30, 2014. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website. A conference call will be held on Wednesday, March 18, 2015 at 11am EDT to present and discuss these results. Those interested in participating should dial toll free 1 (877) 223-4471 or (647) 788-4922. A PowerPoint presentation will be available on DEQ's website in the Investors/Financial Reports/Presentation section to support the call content.
2014 ANNUAL RESULTS AND FOURTH QUARTER HIGHLIGHTS:
Financial Metrics
- Revenue
- 8% increase in total revenue to $7,540,000 in 2014 as compared to $7,004,000 in 2013.
- 16% increase in product rental revenue to $6,358,000 in 2014 from $5,481,000 in 2013.
- 35% compound annual growth rate of product rental revenue over the last three years.
- For the fourth quarter 2014, DEQ recorded Product rental revenue of $1,668,000, an 11% increase compared to $1,500,000 in the fourth quarter 2013.
- Operating Expenses
- Operating and administrative expenses before non-cash items increased by 8%, to $4,952,000 from $4,585,000 in 2013. DEQ expects its operating costs to remain relatively stable for 2015.
- Research and development expenses increased to $869,000 compared to $790,000 in 2013, an increase of 10%.
- EBITDA
- DEQ recorded EBITDA of $1,008,000 in 2014 compared to $605,000 in 2013.
- For the fourth quarter 2014, DEQ recorded EBITDA of $150,000 compared to $328,000 in the fourth quarter 2013.
- Liquidity and Cash Flow
- During fiscal year 2014, DEQ's cash position increased by $89,000 due to positive cash flow from operating activities of $676,000 and partially offset by investment activities in leased equipment and intangible assets of $614,000 which funded DEQ's continued growth.
- DEQ had a cash position of $1,654,000 as of November 30, 2014.
Operational Highlights
- Product Installations
- In 2014, DEQ increased its net installation base by 128 units (79 units during the fourth quarter 2014) at an average lease price of $3,500 per annum, representing an increase of approximately $448,000 of new recurring revenue per year.
- As of November 30, 2014, DEQ had 1,825 directly installed products worldwide and 360 products installed through distributors worldwide for a total installed base of 2,185 products worldwide.
"DEQ delivered another solid year in 2014 with revenues, gross profit and EBITDA all reaching new record levels," stated Joe Bertolone, President and Chief Executive Officer of DEQ. "The Company demonstrated great operating leverage achieving a 67% year-over-year increase in EBITDA resulting from our efforts to contain costs and increase our returns on our investments in R&D and operations. I am confident we will continue to build on our momentum with best-in-class products and great service in 2015."
| Statement of Earnings |
|||||||
| Fourth Quarter |
Twelve-Month Period |
||||||
| November 30, 2013 |
November 30, 2014 |
November 30, 2013 |
November 30, 2014 |
||||
| (unaudited) |
(unaudited) |
(audited) |
(audited) |
||||
| Product rental |
1,500,000 |
1,668,000 |
5,481,000 |
6,358,000 |
|||
| Royalties (1) |
302,000 |
243,000 |
1,170,000 |
1,020,000 |
|||
| Total recurring revenue |
1,802,000 |
1,911,000 |
6,651,000 |
7,378,000 |
|||
| Non recurring revenue |
125,000 |
16,000 |
353,000 |
162,000 |
|||
| Total Revenue |
1,927,000 |
1,927,000 |
7,004,000 |
7,540,000 |
|||
| Gross Profit (2) |
1,648,000 |
1,883,000 |
5,980,000 |
6,829,000 |
|||
| % Gross margin |
86% |
97% |
85% |
90% |
|||
| Operating expenses (2) |
1,320,000 |
1,733,000 |
5,375,000 |
5,821,000 |
|||
| EBITDA (3) |
328,000 |
150,000 |
605,000 |
1,008,000 |
|||
| Stock based compensation |
7,000 |
1,000 |
160,000 |
21,000 |
|||
| Amortization expenses |
708,000 |
712,000 |
2,791,000 |
2,723,000 |
|||
| Interest expenses |
3,000 |
2,000 |
15,000 |
9,000 |
|||
| Foreign exchange (gain) loss |
7,000 |
16,000 |
7,000 |
157,000 |
|||
| Net Income (Loss) |
(397,000) |
(581,000) |
(2,368,000) |
(1,902,000) |
|||
| Net Income (Loss ) per share |
$(0.006) |
$(0.007) |
$(0.034) |
$(0.027) |
|||
| Note 1: |
DEK International – Distributor located in Panama that covers mostly South American territories. |
| Note 2: |
Gross profit and operating expenses exclude 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 |
|||||||
| Nov. 30, 2013 |
Nov. 30, 2014 |
||||||
| (Audited) |
(Audited) |
||||||
| Cash and cash equivalents |
1,565,000 |
1,654,000 |
|||||
| Current assets (other than cash) |
1,164,000 |
1,571,000 |
|||||
| Long-term assets |
7,587,000 |
5,479,000 |
|||||
| Total Assets |
$10,316,000 |
$8,704,000 |
|||||
| Current liabilities |
1,244,000 |
1,274,000 |
|||||
| Shareholders' equity |
9,072,000 |
7,430,000 |
|||||
| Total Liabilities and Equity |
$10,316,000 |
$8,704,000 |
|||||
| Number of shares outstanding |
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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