DEQ reports its 2012 third quarter results

2012 third quarter highlights:
Revenue
58% increase in direct leasing revenue from $708,000 in the third quarter of 2011 to $1,116,000 in the third quarter of 2012.

75% increase in direct leasing revenue from $1,750,000 for the nine month period ending August 31, 2011 to $3,055,000 for the nine month period ending August 31, 2012.
23% increase in gross profit from $1,041,000 in the third quarter of 2011 to $1,280,000 in the third quarter of 2012.

Operating Costs
Third quarter operating cost increased 27% to $1,194,000 from $939,000 due to a significant increase in installations in Asia and the readjustment of operations to support growth including permanent staff in Asia.

On a sequential basis from the second quarter of 2012, operating costs declined 11% due to ongoing cost reductions and seasonality.

EBITDA
EBITDA of $85,000 in the third quarter of 2012 versus EBITDA of $102,000 in the third quarter of 2011, however on a sequential basis EBITDA for the third quarter improved significantly from a loss of $178,000 in the second quarter of 2012.

Cash Flow
During the third quarter of 2012, our cash position decreased by $346,000 to $910,000. This is explained mostly by purchase of inventory for an amount of $125,000 as well as variation of working capital items (accounts receivable, prepaid and accounts payable) for a net amount of $180,000.

Product Installations
106 net installations during the third quarter of 2012 at an average lease price of $3,500 per annum, representing an increase of approximately $370,000 of new recurring revenue per year.

As of August 31, 2012 a total of 1,636 units installed worldwide with an average net recurring revenues of $3,500. DEQ operates 1,291 products directly worldwide and another 345 are operated by distributors.

“DEQ has once again delivered a strong growth quarter,” stated Earle G. Hall, President & CEO of DEQ. “Our core business is growing in all product segments and we are entering a new economy of scale with regards to our operational costs. The Asian and the Australian markets are becoming significant sources of revenue and growth while the USA and Canada are growing at an accelerating pace. Our next significant benchmark is to increase our cash position which we expect in the very near future and we are very confident that we have sufficient funds to sustain our growth.”

The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ’s website. A conference call will be held today  at 11am EST to present and discuss these results.

Those interested in participating should dial toll free 1 (800) 768-5121 or (416) 981-9000. A visual presentation (PowerPoint) will be available on DEQ’s website in the Investors/Financial Reports/Presentation section to support the call content.