LAS VEGAS, NV and LEVIS, QC, March 29,
2016 /CNW Telbec/ - DEQ Systems Corp. (TSXV: DEQ)
("DEQ" or the "Company") announced today the filing of its
annual financial results for the fiscal year ended November 30, 2015. 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. A
conference call will be held on Thursday, March 31, 2016 at
8:30am EDT to present and discuss
these results. Those interested in participating should dial toll
free 1 (877) 223-4471 or (647) 788-4922. Please note
that the conference call replay will be available until
April 14, 2016 by dialing 1 (416)
621-4642 or 1 (800) 585-8367. The conference ID # for the
replay is 76163886.
2015 ANNUAL RESULTS AND FOURTH QUARTER SUMMARY:
Financial Metrics
- Revenue
- 20% increase in total revenue to $9,082,000 in 2015 as compared to $7,540,000 in 2014.
- 13% increase in table systems to $5,899,000 in 2015 as compared to $5,209,000 in 2014.
- 23% increase in proprietary table games to $2,751,000 in 2015 as compared to $2,228,000 in 2014.
- Q4-15 Revenue increased $422,000,
22% compared to Q4-14.
- Operating Expenses
- Operating and administrative expenses increased by 17%, to
$8,475,000 from $7,227,000 in 2014. These increases were
substantially related to professional fees and outside services
related to the settlement of the Talisman litigation, higher
licensing and compliance fees, costs associated with the
reconstitution of the Board of Directors, costs related to DEQ's
corporate office restructuring, and a contingency reserve related
to potential sales and/or use tax.
- Research and development expenses increased to $1,253,000 compared to $894,000 in 2014, an increase of 40%. These
increases resulted from DEQ's continuing efforts to expand its new
table game products and enhance its existing
offerings.
- EBITDA
- DEQ recorded EBITDA of ($148,000)
in 2015 compared to $1,008,000 in
2014. For the fourth quarter of 2015, DEQ recorded EBITDA of
($845,000) compared to $148,000 in the fourth quarter of 2014.
- 2015 EBITDA was significantly burdened with higher operating
and administrative expenses primarily attributed to certain
non-routine and/or non-recurring expenses summarized as follows:
- $287,000 in severance benefits
related to DEQ's planned corporate office
relocation.
- $112,000 for prior board member
exit packages related to the reconstitution of DEQ's Board of
Directors.
- $157,000 of incremental legal
cost related to the Talisman litigation.
- $216,000 impairment write-down
related to equipment / products for lease.
- $391,000 of incremental outside
professional services, including licensing and compliance, related
to DEQ's corporate and organizational restructuring.
- $414,000 associated with a
multi-year reserve for potential sales and/or use tax related to
lease equipment revenue in certain jurisdictions located in
the United States.
- Liquidity and Cash Flow
- During fiscal year 2015, DEQ's cash position increased by
$896,000 primarily attributed to cash
flow from operating activities (inclusive of the net change in
working capital items), the impact of foreign currency exchange
rate changes, and positive cash flow from investment
activities.
- DEQ had a cash position of $2,550,000 as of November
30, 2015.
- Operational Highlights
- As of November 30, 2015, DEQ had
2,293 installed products worldwide – directly and through global
distribution partners. This compares to 2,185 installed products as
of November 30, 2014.
"The milestones that we have achieved during this
transformational year were significant and necessary. Our recurring
revenue model allows us to make this transformation with our eye
towards the long term. When evaluated on a year over year basis,
and factoring out non-routine / non-recurring charges, and currency
translation, our performance showed growth and continues our
positive year over year trend. The costs associated with our
efforts to right size the business have been significant, but lay
the foundation for a healthy company going forward. Through all of
this change we focused on growing top line revenues and our
installed base as well as increasing our cash position. We focused
on growing our product offerings and added new PTG content and
released our upgraded progressive platform, PRSM. We set out to
build a better more robust company and have done so with core staff
and products," stated Joe Bertolone,
President and Chief Executive Officer of DEQ.
|
|
|
|
|
|
|
|
EBITDA and
Adjusted EBITDA*
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
Twelve-Month
Period
|
|
November
30,
2015
|
|
November
30,
2014
|
|
November
30,
2015
|
|
November
30,
2014
|
|
(unaudited)
|
|
(unaudited)
|
|
(audited)
|
|
(audited)
|
Net Income
(Loss)
|
(1,514,000)
|
|
(583,000)
|
|
(2,656,000)
|
|
(1,901,000)
|
Add/(Subtract):
|
|
|
|
|
|
|
|
Interest Expense
(Revenue)
|
1,000
|
|
2,000
|
|
5,000
|
|
9,000
|
Foreign Exchange Loss
(Gain)
|
463,000
|
|
16,000
|
|
433,000
|
|
157,000
|
Depreciation &
Amortization
|
198,000
|
|
712,000
|
|
1,983,000
|
|
2,723,000
|
Stock-Based
Compensation
|
7,000
|
|
1,000
|
|
87,000
|
|
20,000
|
EBITDA*
|
(845,000)
|
|
148,000
|
|
(148,000)
|
|
1,008,000
|
Non-routine /
Non-recurring items
|
972,000
|
|
73,000
|
|
1,577,000
|
|
100,000
|
Adjusted
EBITDA*
|
127,000
|
|
221,000
|
|
1,429,000
|
|
1,108,000
|
*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. Adjusted EBITDA means EBITDA before any non-routine /
non-recurring items.
|
Mr. Bertolone further stated, "DEQ's hard work and positioning
efforts during 2015 will allow 2016 to be a basis year for growth.
We estimate that revenues will grow in a range commensurate with
prior year performance on an annualized year over year basis. As
our cost normalize, our work positioning DEQ for future growth will
begin to pay off in the second half of 2016."
|
|
|
|
|
|
|
|
Statement of
Earnings
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
Twelve-Month
Period
|
|
November
30,
2015
|
|
November
30,
2014
|
|
November
30,
2015
|
|
November
30,
2014
|
|
(unaudited)
|
|
(unaudited)
|
|
(audited)
|
|
(audited)
|
|
|
|
|
|
|
|
|
Table
Systems
|
1,537,000
|
|
1,320,000
|
|
5,899,000
|
|
5,210,000
|
Proprietary Table
Games
|
803,000
|
|
593,000
|
|
2,751,000
|
|
2,228,000
|
Total recurring
revenue
|
2,340,000
|
|
1,913,000
|
|
8,650,000
|
|
7,438,000
|
Non recurring
revenue
|
10,000
|
|
14,000
|
|
432,000
|
|
102,000
|
Total
Revenue
|
2,350,000
|
|
1,927,000
|
|
9,082,000
|
|
7,540,000
|
|
|
|
|
|
|
|
|
Gross
Profit
|
1,830,000
|
|
1,749,000
|
|
7,510,000
|
|
6,386,000
|
% Gross
margin
|
78%
|
|
91%
|
|
83%
|
|
85%
|
|
|
|
|
|
|
|
|
Operating &
Administrative expenses
|
2,512,000
|
|
2,079,000
|
|
8,475,000
|
|
7,227,000
|
Research &
Development expenses
|
368,000
|
|
234,000
|
|
1,253,000
|
|
894,000
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
(1,050,000)
|
|
(564,000)
|
|
(2,218,000)
|
|
(1,735,000)
|
Foreign exchange
& other expenses
|
464,000
|
|
19,000
|
|
438,000
|
|
166,000
|
Net Income
(Loss)
|
(1,514,000)
|
|
(583,000)
|
|
(2,656,000)
|
|
(1,901,000)
|
Net Income (Loss) per
share
|
$(0.021)
|
|
$(0.009)
|
|
$(0.037)
|
|
$(0.027)
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Position
|
|
|
|
|
Nov. 30,
2015
|
|
Nov. 30,
2014
|
|
(audited)
|
|
(audited)
|
|
|
|
|
Cash and cash
equivalents
|
2,550,000
|
|
1,654,000
|
Current assets (other
than cash)
|
1,716,000
|
|
1,571,000
|
Long-term
assets
|
3,302,000
|
|
5,479,000
|
Total
Assets
|
$7,568,000
|
|
$8,704,000
|
|
|
|
|
Current
liabilities
|
2,001,000
|
|
1,274,000
|
Shareholders'
equity
|
5,567,000
|
|
7,430,000
|
Total Liabilities
and Equity
|
$7,568,000
|
|
$8,704,000
|
|
|
|
|
Number of shares
outstanding
|
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 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.
SOURCE DEQ SYSTEMS CORP.