LAS VEGAS, NV and LÉVIS, QC,
Oct. 31, 2016 /CNW Telbec/ - DEQ
Systems Corp. (TSXV: DEQ) ("DEQ" or the "Company") announced today
the filing of its third quarter financial results for the period
ended August 31, 2016. The
consolidated financial statements are available on SEDAR
(www.sedar.com) and DEQ's website and should be read in conjunction
with this press release.
2016 THIRD QUARTER RESULTS AND HIGHLIGHTS:
Financial Metrics
REVENUE HIGHLIGHTS:
- Overall revenue growth of 9% from $2,307,000 in the third quarter of 2015, as
compared to $2,514,000 in the third
quarter of 2016.
- Revenues grew 7% on a sequential quarter basis from
$2,354,000 in the second quarter of
2016 to $2,514,000 in the third
quarter of 2016.
- 30% increase in Proprietary Table Games from $700,000 in the third quarter of 2015 to
$908,000 in the third quarter of
2016.
- Equipment sales grew 8% from $90,000 in the third quarter of 2015 to
$97,000 in the third quarter of
2016.
- Gross Profits increased 6% in gross profit on a year over year
basis from $2,054,000 in the third
quarter of 2015 to $2,184,000 in the
third quarter of 2016.
OPERATING HIGHLIGHTS:
- Operating and administrative expenses increased to $2,355,000 for the third quarter of 2016, as
compared to $2,067,000 in the third
quarter of 2015.
- The increase in year‐over‐year comparative third quarter
operating expenses are a result of a reduction in amortization
totaling $321,000 offset by
- $138,000 in incremental salary
for sales staff
- $134,000 in legal fees,
professional fees and shareholder communication related to the
strategic alternative process
- $82,000 in sales and personal
property taxes
- $70,000 in sales related travel
costs
- $66,000 in outsourced fees
EBITDA:
- DEQ recorded an EBITDA loss of $317,000 in Q3‐2016 compared to EBITDA of
$225,000 in the third quarter of
2015. The change in EBITDA was a result of the following:
- $138,000 in incremental salaries
for sales staff;
- $134,000 (composed of legal fees
of $96,000, professional fees of
$23,000 and
- $15,000 in shareholder
communications);
- $82,000 in personal property
taxes;
- $70,000 in incremental sales
related travel costs;
- $66,000 in outsourced development
fees associated with new product;
- $30,000 in additional insurance
costs associated general business growth requirements; and
- $22,000 associated with new
products licensing.
LIQUIDITY AND CASH FLOW
- During the third quarter of 2016, DEQ's reported cash position
decreased by $243,000, from
$1,704,000 in the second quarter of
2016 to $1,461,000 in the third
quarter of 2016. This decrease is primarily attributed to payroll
and travel costs related to the additional sales team and payment
of personal property taxes.
KEY PERFORMANCE INDICATOR
- Installed unit base grew to 2,386 with a net installation total
of 64 units in the third quarter of 2016, up 3% from 2,322 units in
the third quarter of the prior year.
"DEQ continues to execute our strategy of leveraging our service
team, premium content and products features to our existing and new
customers. As our new and existing content and PRSM progressive
system growth continues throughout the increased base of regulated
jurisdictions, our investments in sales, licensing and distribution
continue to pay off with steady year‐ over‐year and sequential
quarter revenue growth. Our dedicated team continues to focus on
product placement and marketplace penetration." stated Joe Bertolone, President and Chief Executive
Officer of DEQ.
|
|
EBITDA*
|
|
|
|
|
THIRD
QUARTER
|
NINE‐MONTH
Period
|
|
August
31,
2016
(unaudited)
|
August 31,
2015
(unaudited)
|
August
31,
2016
(unaudited)
|
August 31,
2015
(unaudited)
|
|
Net Income
(Loss)
|
(526,000)
|
(424,000)
|
(1,461,000)
|
(1,142,000)
|
|
Add/(Subtract):
|
|
|
|
|
|
Interest
Expense
|
5,000
|
0
|
12,000
|
4,000
|
|
Foreign Exchange Loss
(Gain)
|
1,000
|
125,000
|
122,000
|
(29,000)
|
|
Depreciation &
Amortization
|
204,000
|
497,000
|
535,000
|
1,785,000
|
|
Stock‐Based
Compensation
|
(0)
|
27,000
|
14,000
|
79,000
|
|
EBITDA*
|
(316,000)
|
225,000
|
(778,000)
|
697,000
|
|
|
|
|
|
|
*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.
|
|
|
|
Statement of
Earnings
|
|
|
|
THIRD
QUARTER
|
|
NINE-MONTH
Period
|
|
August
31,
|
August 31,
|
|
August
31,
|
August 31,
|
|
2016
|
2015
|
|
2016
|
2015
|
|
(unaudited)
|
(unaudited)
|
|
(unaudited)
|
(unaudited)
|
|
|
|
|
|
|
|
Table
Systems
|
1,510,000
|
1,517,000
|
|
4,556,000
|
4,362,000
|
|
Proprietary Table
Games
|
908,000
|
700,000
|
|
2,571,000
|
1,948,000
|
|
Total recurring
revenue
|
2,418,000
|
2,217,000
|
|
7,127,000
|
6,310,000
|
|
Non recurring
revenue
|
97,000
|
90,000
|
|
221,000
|
423,000
|
|
Total
Revenue
|
2,515,000
|
2,307,000
|
|
7,348,000
|
6,733,000
|
|
|
|
|
|
|
|
Gross
Profit
|
2,184,000
|
2,054,000
|
|
6,388,000
|
5,680,000
|
|
% Gross
margin
|
87%
|
89%
|
|
87%
|
84%
|
|
|
|
|
|
|
|
Operating &
Administrative expenses
|
2,355,000
|
2,067,000
|
|
6,726,000
|
5,964,000
|
|
Research &
Development expenses
|
349,000
|
287,000
|
|
990,000
|
884,000
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
(520,000)
|
(300,000)
|
|
(1,328,000)
|
(1,168,000)
|
|
FX & other
expenses (revenue)
|
5,000
|
126,000
|
|
134,000
|
(25,000)
|
|
Net Income
(Loss)
|
(525,000)
|
(424,000)
|
|
(1,462,000)
|
(1,143,000)
|
|
Net Income (Loss) per
share
|
$(0.007)
|
$(0.006)
|
|
$(0.020)
|
$(0.018)
|
|
|
Financial
Position
|
|
|
|
|
|
|
August
31,
|
|
August 31,
|
November
30,
|
|
2016
|
|
2015
|
2015
|
|
(unaudited)
|
|
(audited)
|
(unaudited)
|
|
|
|
|
|
|
Cash and cash
equivalents
|
1,461,000
|
|
2,733,000
|
2,550,000
|
|
Current assets (other
than cash)
|
2,242,000
|
|
1,839,000
|
1,716,000
|
|
Long‐term
assets
|
3,573,000
|
|
3,703,000
|
3,302,000
|
|
Total
Assets
|
$7,276,000
|
|
$8,275,000
|
$7,568,000
|
|
Current
liabilities
|
2,689,000
|
|
1,544,000
|
2,001,000
|
|
Shareholders'
equity
|
4,587,000
|
|
6,731,000
|
5,567,000
|
|
Total Liabilities
and Equity
|
$7,276,000
|
|
$8,275,000
|
$7,568,000
|
|
|
|
|
|
|
Number of shares
outstanding
|
71,682,000
|
|
71,682,000
|
71,682,000
|
ABOUT DEQ
DEQ Systems Corp. (TSXV: DEQ) is one of the market leaders in
Table Game Systems, Proprietary Table Games, 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 August 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.