DEQ posts record quarterly revenue of USD 2.1M

DEQ Systems Corp. has announced the filing of its first quarter financial results for the period ended February 28, 2015. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ’s website.

2015-05-04

United States

Reading time 3:21 min

DEQ Systems Corp. has announced the filing of its first quarter financial results for the period ended February 28, 2015. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ’s website.

2015 FIRST QUARTER RESULTS HIGHLIGHTS:

Financial Metrics

Revenue

15% increase in Proprietary Table Games from $529,000 in the first quarter of 2014 to $606,000 in the first quarter of 2015.
18% increase in gross profit from $1,533,000 to $1,809,000 in Q1-2015.

Liquidity and Cash Flow

DEQ increased its cash position by $288,000 from $1,654,000 as of November 30 to $1,942,000 as of February 28, 2015, 2014, an increase of 17%.
Operating activities generated cash flow of $312,000 in Q1-2015 compared to negative cash flow from operating activities of $23,000 in Q1-2014.

EBITDA

Stable EBITDA of $199,000 in Q1-2015 compared to $201,000 in Q1-2014.

Operational Highlights

As of February 28, 2015, DEQ had 2,251 units worldwide (1,896 units installed directly and 355 units installed by our distributors) compared to 2,089 units worldwide as of February 28, 2014.
During the first quarter of 2015, a total of 66 net units were installed compared to net installations of 32 units in the prior year first quarter. The Company is generating an average recurring revenue of $3,520 per unit per year, up slightly from $3,516 in last year first quarter.

“DEQ continues to execute our growth plan, manage our cash and we are prudently re-investing in our business” stated Joe Bertolone, President and Chief Executive Officer of DEQ. “Our Asian partnership is beginning to pay off with installations in Cambodia, Korea and Australia where we are breaking new ground. Our deployments in Cambodia and Australia are the first for DEQ in these countries. These are beachhead installations that will lead to more business in these regions. Our EBITDA remains on track as compared to a year ago, as we continue to expand our revenue base.”

Statement of Earnings

First Quarter

Twelve-Month Period

February 28,

2014

February 28,

2015

February 28,

2014

February 28,

2015

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Table Systems

1,307,000

1,375,000

4,941,000

5,218,000

Proprietary Table Games

529,000

606,000

2,073,000

2,306,000

Total recurring revenue

1,836,000

1,981,000

7,014,000

7,524,000

Non recurring revenue

41,000

141,000

268,000

262,000

Total Revenue

1,877,000

2,122,000

7,282,000

7,786,000

Gross Profit ⁽¹⁾

1,630,000

1,888,000

6,183,000

7,065,000

% Gross margin

87%

89%

85%

91%

Operating expenses ⁽¹⁾

1,429,000

1,689,000

5,420,000

5,940,000

EBITDA ⁽²⁾

201,000

199,000

763,000

1,125,000

Stock based compensation

7,000

8,000

156,000

21,000

Amortization expenses

661,000

652,000

2,767,000

2,744,000

Interest expenses

2,000

2,000

12,000

10,000

Foreign exchange (gain) loss

(33,000)

(309,000)

15,000

(120,000)

Net Income (Loss)

(436,000)

(154,000)

(2,187,000)

(1,530,000)

Net Income (Loss ) per share

$(0.006)

$(0.002)

$(0.031)

$(0.040)

___________________________________________________________________________________________________

Note 1: Gross profit and operating expenses excluded non-cash items such as depreciation, amortization and stock-based compensation.

Note 2: 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

	February 28, 2014	November 30, 2014	February 28, 2015
	(unaudited)	(audited)	(unaudited)

Cash and cash equivalents	1,451,000	1,654,000	1,942,000
Current assets (other than cash)	1,381,000	1,571,000	1,879,000
Long-term assets	6,998,000	5,479,000	4,873,000
Total Assets	$9,830,000	$8,704,000	$8,694,000

Current liabilities	1,170,000	1,275,000	1,555,000
Shareholders' equity	8,660,000	7,429,000	7,139,000
Total Liabilities and Equity	$9,830,000	$8,704,000	$8,694,000

Number of shares outstanding	71,682,000	71,682,000	71,682,000