DEQ SYSTEMS CORP. 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, August 31, August 31, August 31,
2015 2014 2015 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, August 31, August 31, August 31,
2015 2014 2015 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,
2015 2014
(unaudited)
(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.
