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DEQ Systems Corp. TSX VENTURE: DEQ 
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DEQ Releases its 2008 Third Quarter Results
LEVIS, QUEBEC--(Marketwire - Oct. 22, 2008) - DEQ Systems Corp. (TSX VENTURE:DEQ) announced today the filing of its 2008 third quarter financial results for the period ended August 31, 2008. This quarter highlights include a 38% average annual growth in recurring revenue in the last three years as well as a LTE increase of 45% from 706 in Q3 2007 to 1021 in Q3 2008.
A conference call will be held on Thursday, October 23rd at 11:00 am EST to present and discuss the results. Those interested in participating should dial (416) 644-3421 or toll free 1 (800) 731-5319. A visual presentation (Powerpoint) will be available on DEQ's website (www.deq.com) in the Invest/Financial Reports/PowerPoint section to support the call content. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website.
2008 THIRD QUARTER HIGHLIGHTS:
Financial
- Recurring Revenue: 45% increase from $530,000 in Q3 2007 to $766,000 in Q3 2008
- Gross Profit: 26% increase from $598,000 in Q3 2007 to $755,000 in Q3 2008
- Gross Margin: 82% in Q3 2008
- 38% average annual growth in recurring revenue in the last three years
- Slight increase in operating costs at $895,000 this quarter due to Asian commercialization travel
Operational
- Acquisition of DEK international exclusive distribution license
- Nevada Gaming Control Board Approval for the G3TM
- DEQ appoints Michael Hackman to the Board of Directors
- DEQ ranks among TOP 10 BEST TECHNOLOGY COMPANIES for 2008 on TSXV
"Our financial statements are tangible proof of the solid business model we have built based on recurring revenue," stated Earle G. Hall, president and chief executive officer of DEQ. "In these times of uncertainty, the no capital expenditure, no risk incremental revenue proposition we have built for casinos is a very enticing way for them to create new ways to attract and retain clients. This business model together with our strong financial position places DEQ in a very strong and envious position."
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Balance Sheet Nov. 30, Feb. 29, May 31, Aug. 31,
2007 2008 2008 2008
(Audited) (unaudited) (unaudited) (unaudited)
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Cash and cash
equivalents 11,364,112 10,316,664 10,559,478 6,784,210
Current assets (other
than cash) 2,180,534 2,649,097 3,341,568 1,910,201
Long-term assets 9,187,762 9,174,871 9,301,495 17,739,692
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Total Assets $22,732,408 $22,140,633 $23,202,541 26,434,103
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Current liabilities 1,716,162 1,074,818 2,108,458 2,890,244
Long-term liabilities 577,073 577,073 577,073 2,256,931
Shareholders' equity 20,439,173 20,488,741 20,517,010 21,286,928
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Total Liabilities
and Equity $22,732,408 $22,140,633 $23,202,541 $26,434,103
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Number of shares
outstanding 69,350,794 69,907,919 69,907,919 70,416,315
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Additional financial information
Third Quarter Nine Month Period
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
2007 2008 2007 2008
(unaudited) (unaudited) (unaudited) (unaudited)
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$ $ $ $
Revenue Distribution
Recurring revenue 529,943 766,074 1,776,259 2,151,823
Product sales and
patents rights 170,207 158,194 850,527 608,902
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700,150 924,268 2,626,787 2,760,725
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Gross Profit 598,164 755,682 2,288,469 2,199,135
Operating Cost(1) 635,704 895,313 2,308,765 2,563,864
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EBITDA(2) (37,540) (139,631) (20,296) (364,729)
Interest income, net
of expenses 92,612 137,416 263,708 476,106
Deferred revenue variation (70,163) (120,516) 451,974 818,952
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Adjust. Operational
Cash Flow(2) $(15,091) $(122,731) $695,386 $930,329
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Note 1: Operating Cost is excluding stock-option based compensation.
Note 2: We use EBITDA (Earnings before interest, taxes, depreciation and
amortization) and Adjusted Operational Cash Flow as performance
measurements in our financial disclosure. These measurements are
not recognized under generally accepted accounting principles.
The reconciliations above demonstrate how we calculate such
measurements from our financial statements
Statement of Earnings
Third Quarter Nine Month Period
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
2007 2008 2007 2008
(unaudited) (unaudited) (unaudited) (unaudited)
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$ $ $ $
Revenue
Royalties 467,231 680,070 1,547,932 1,906,626
Sale of equipment 63,047 158,194 743,367 608,902
Equipment rental 62,712 86,004 228,328 245,197
Patent rights 107,160 - 107,160 -
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700,150 924,268 2,626,787 2,760,725
Gross Profit 598,164 755,682 2,288,469 2,199,135
% Gross margin 85% 82% 87% 80%
Net Loss $(321,834) $360,326 $(838,119) $(91,848)
Net Loss per share $(0.006) $0.005 $(0.016) $(0.005)
ABOUT DEQ
Founded in 1998, DEQ Systems Corp. (TSX VENTURE: DEQ) is a leader in the table game bonusing technology field. DEQ's patents, products and features include side bet bonusing games with progressive and random jackpot prizes, slot machine style mystery bonusing, multiple credit and denomination betting flexibility, dealer hand betting, electronic credit bank, electronic rake, baccarat hand tracking, multimedia animation and sound effects. DEQ has an extensive patent portfolio that is recognized in more than 50 countries such as the USA, Macau, Australia and Canada. DEQ's bonusing solutions and products are present in more that 200 casinos in over 30 countries.
DEQ Systems Corp. has been selected in the TSX Venture 50 in 2008. "2008 Venture 50" is a trademark of TSX inc. and is used under license.
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.
TSX Venture does not accept any responsibility regarding the accuracy of the information contained in this press release.
For more information, please contact
DEQ Systems Corp.Earle G. Hall
President & CEO
earle.hall@deq.com
or
DEQ Systems Corp.
Francois Proulx
Chief Financial Officer
francois.proulx@deq.com