DEQ reports record revenue

Financial metrics

  Revenue

  § 25% increase in total revenue to $7,004,000 in 2013 as compared to $5,605,000 in 2012.

  § 32% increase in product rental revenue to $5,481,000 in 2013 from $4,149,000 in 2012.

  § 56% compound annual growth rate of product rental revenue over the last three years.

  § For the fourth quarter 2013, DEQ recorded total revenue of $1,927,000, a 19% increase compared to $1,617,000 in the fourth quarter 2012.

  Operating expenses

  § Operating expenses before non-cash items were stable, increasing 2%, to $5,375,000 from $5,290,000 in 2012. DEQ expects its operating costs to remain relatively stable for 2014 due to economies of scale and efficiency gains.

  § For the fourth quarter 2013, DEQ recorded operating expenses of $1,320,000, a 12% decrease compared to $1,495,000 in fourth quarter 2012, as a result of cost containment initiatives.

  EBITDA

  § DEQ recorded positive EBITDA of $605,000 in 2013 compared to
$(496,000) in 2012.

  § For the fourth quarter 2013, DEQ recorded EBITDA of $328,000 compared to $(205,000) in the fourth quarter 2012.

  Liquidity and cash flow

  § During fiscal year 2013, DEQ's cash position increased by $815,000 due to positive cash flow from operating activities of $266,000 and share issuance of $1,000,000, partially offset by investment activities in leased equipment and intangible assets of $483,000 which funded DEQ's continued growth.

  § DEQ had a cash position of $1,565,000 as of November 30, 2013.

Operational highlights


  Product installations

  § In 2013 DEQ increased its net installation base by 332 units (67 units during the fourth quarter 2013) at an average lease price of $3,500 per annum, representing an increase of approximately $1,162,000 of new recurring revenue per year.

  § As of November 30, 2013, DEQ had 1,677 directly installed products worldwide and 380 products installed through distributors worldwide for a total installed base of 2,057 products worldwide.

"DEQ delivered excellent financial results in 2013 with a 25% increase in revenue and a 32% increase in product rental revenue," stated François Proulx, Interim Chief Executive Officer and Chief Financial Officer of DEQ. "The Company also reached a turning point by achieving positive EBITDA resulting from management's diligent efforts to control spending and create profitable growth. We will pursue the same goal in 2014 and focus on operational efficiencies while continuing to grow our installed base. With more than 2,050 units currently in operation worldwide, generating an estimated $7 million in annual recurring revenue, we are very encouraged with the pace of our enhanced roll-out strategy. We continue to target robust market opportunities and we are very confident in the potential growth of all of our product lines in 2014."

 The Consolidated Financial Statements are available on SEDAR. A PowerPoint presentation will be available on DEQ's website in the Investors/Financial Reports/Presentation section to support the call content.