DEQ reports its 2011 second quarter results

According to the information released by the company, 2011 second quarter results highlights are:

- 183 new installations during the quarter compared to 75 new installations in the Q2-2010 for a net increase of 144% at an average annual lease price of $4,200.  Also, for the six-month period, there were 324 new installations in 2011, compared to 141 new installations for the same period in 2010, an increase of 130% over the six-month period.

- 81% increase in direct leasing quarterly revenue from $310,000 in 2010 to $562,000 in 2011.  Also a 72% increase in direct leasing revenue for the six-month period, from $606,000 in 2010 to $1,042,000 in 2011.

- The termination of Severn Agreement at the end of the first quarter of 2011 has reduced our quarterly recurring royalties by $231,000.

- Patent right sale of $175,000 in the second quarter of 2011.

- Reduction of operating costs by $65,000 to $1,080,000 in Q2-2011 compared to $1,145,000 in Q1-2011, explained by the cost reduction plan that was announced in March 2011 for which most of the benefits will be seen starting in Q3-2011.

- Increase of $203,000 of the stock based compensation (non-cash item) explained by the one-time accounting impact of the stock option repricing completed in May 2011.

- EBITDA of $(193,000) in Q2-2011 compared to $(310,000) in Q1-2011 explained by the operating cost reduction program that was completed in April 2011 and the increase in the number of installations, but off-set by the loss of Severn Agreement at the end of the first quarter of 2011 for an amount of $231,000.

- During the second quarter of 2011, our cash position decreased by $799,000 explained mostly by our negative EBITDA, the change in non cash working capital of $291,000 as well as the investment in leased equipment with new installations for an amount of $174,000.

- In the second quarter of 2011, DEQ directly installed 183 new products worldwide (324 for the six-month period ending May 31, 2011).

- As of May 31, 2011, DEQ had 742 directly installed products in North America, 101 products installed in Asia and 385 products installed through a distributor worldwide for a total of 1,228 products in operation worldwide.

“We are pleased to announce that DEQ had a total of 183 new installations in Q2-2011, for a total of 324 for the six-month period (an increase of 144% and 130% respectively over 2010), making Q2 our strongest quarter in the history of the company in terms of new installations. This important increase in installations shows the growing interest in our products from customers all around the world”, stated Earle G. Hall, President and CEO of DEQ.

“The positive results of all the efforts and investments in licensing that we have done are paying off by the significant increase in our direct leasing revenue which has grown by more than 80% compared to the same quarter last year. With regards to operating expenses, we have started to see the benefits of our reduction plan that was implemented in March 2011 and we are very happy with the cost control measures in place to ensure maximum shareholder value going forward.”