DEQ Reports Revenue of $1.9 Million and EBITDA of $200,000 for the 2014 First Quarter

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LEVIS, QC, April 16, 2014 /PRNewswire/ -DEQ Systems Corp. (TSXV: DEQ) ("DEQ" or the "Company") announcesthe filing of its first quarter financial results for the period ended February 28, 2014. The Consolidated Financial Statements are available on SEDAR ( and DEQ's website. A conference call will be held on Thursday, April 17, 2014 at 11am EST to present and discuss these results. Those interested in participating in the call should dial toll free 1 (877) 223-4471 or (647) 788-4922. A presentation will be available on DEQ's website in the Investors/Financial Reports/Presentation section to support the call content.


Financial Metrics

         --  Revenue       o 29% increase in product rental revenue from $1,195,000 in Q1-2013         to $1,546,000 in Q1-2014.       o 25% increase in total recurring revenue from $1,473,000 in Q1-2013         to $1,836,000 in Q1-2014.       o 14% increase in gross profit, before non cash items, from 1,428,000         to $1,630,000 in Q1-2014.         --  Operating Costs       o Stable operating costs excluding amortization and stock option         expenses changing of 3% from $1,384,000 in Q1-2013 to $1,429,000 in         Q1-2014.         --  EBITDA       o EBITDA of $201,000 in Q1-2014 increased of $157,000 from $44,000 in         Q1-2013.         --  Liquidity and Cash Flow       o DEQ had a cash position of $1,451,000 as of February 28, 2014.       o Positive cash flow from operating activities before changes in         non-cash working capital items of $247,000 in Q1-2014 compared to         $65,000 in Q1-2013.  

Operational Highlights

         --  As of February 28, 2014, DEQ had 2,089 units worldwide (1,714             units installed directly and 375 units installed by our             distributors) compared to 1,800 units worldwide as of February             28, 2013.         --  During the first quarter of 2014, a total of 32 net units were             installed compared to net installations of 75 units in the             prior year first quarter. The Company is generating an average             recurring net lease of $3,500 per unit per year on its             worldwide installed base of 2,089 units for total annual             recurring revenue of approximately $7,300,000.  

"Product Leasing Revenue posted solid growth of 29% and an EBITDA of $200,000 in the first quarter of 2014", stated François Proulx, Interim Chief Executive Officer and Chief Financial Officer of DEQ. "This is normally a seasonally soft quarter and we are quite happy with these results. With more than 2,089 units currently in operation worldwide generating approximately $7.3 million in annual recurring revenue, we are focusing on our financial performance. New products and commercialization acceleration will further strengthen these metrics going forward."

      Statement of       Earnings                                                                                             First Quarter             Twelve-Month Period                        February                            28,   February 28,   February 28,   February 28,                           2013           2014           2013           2014                                                                                                (unaudited)    (unaudited)    (unaudited)    (unaudited)                                                                                   Product            rental           1,195,000      1,546,000      4,430,000      5,833,000      Royalties          (1)                278,000        290,000      1,122,000      1,182,000      Total              recurring     revenue          1,473,000      1,836,000      5,552,000      7,015,000      Non                recurring     revenue            126,000         41,000        411,000        267,000      Total              Revenue          1,599,000      1,877,000      5,963,000      7,282,000                                                                                   Gross Profit       (2)              1,428,000      1,630,000      5,161,000      6,183,000      % Gross            margin                 89%            87%            87%            85%                                                                                   Operating          expenses(2)      1,384,000      1,429,000      5,415,000      5,420,000      EBITDA(3)           44,000        201,000      (254,000)        763,000                                                                                   Stock based        compensation        11,000          7,000         37,000        156,000      Amortization       expenses           685,000        661,000      2,723,000      2,767,000      Interest           expenses             5,000          2,000         16,000         12,000      Foreign            exchange     (gain) loss       (40,000)       (33,000)       (17,000)         15,000      Net Income         (Loss)           (617,000)      (436,000)    (3,013,000)    (2,187,000)      Net Income         (Loss ) per     share             $(0.009)       $(0.006)       $(0.042)       $(0.031)    
                       Note 1:   DEK International - Distributor located in Panama that covers               mostly South America territories.                       Note 2:   Gross profit and operating expenses excluded non-cash items               such as depreciation, amortization and stock-based               compensation.                       Note 3:   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,   November 30,   February 28,                                          2013           2013           2014                                    (unaudited)      (audited)    (unaudited)                                                                                   Cash and cash equivalents         899,000      1,565,000      1,451,000      Current assets (other than     cash)                           1,861,000      2,175,000      2,360,000      Long-term assets                8,326,000      6,576,000      6,019,000      Total Assets                   11,086,000    $10,316,000      9,830,000                                                                                   Current liabilities             1,467,000      1,244,000      1,170,000      Shareholders' equity            9,619,000      9,072,000      8,660,000      Total Liabilities and     Equity                         11,086,000    $10,316,000      9,830,000                                                                                   Number of shares     outstanding                    69,182,000     71,682,000     71,682,000    


DEQ Systems Corp. (TSXV: DEQ) is a customer-centric company that delivers best of breed table game technology related products to the global gaming industry that adds value and increases client revenue. DEQ provides table game bonusing technology, table games, table game results tracking and jackpot connectivity solutions to more than 275 casinos in 30 countries. DEQ is an intellectual property focused company that has an extensive patent portfolio of more than 20 patents recognized in 50 countries. For further information, please visit


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 may 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.


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