DEQ Systems Corp.

DEQ Systems Corp.

February 25, 2010 16:28 ET

DEQ Releases its 2009 Annual Results

LEVIS, QUEBEC--(Marketwire - Feb. 25, 2010) - DEQ Systems Corp. (TSX VENTURE:DEQ) announced today the filing of its annual financial results for the year ended November 30, 2009. The Consolidated Financial Statements are available on SEDAR ( and DEQ's website. A conference call will be held on Friday, February 26, 2010 at 11am EST to present and discuss these results. Those interested in participating should dial toll free 1 (888) 612-1047 or (416) 359-1270. A visual presentation (Powerpoint) will be available on DEQ's website ( in the Invest/Financial Reports/PowerPoint section to support the call content.


Financial Metrics

  • Revenue
    • 42% growth in recurring revenue from $2.62 M in 2008 to $3.71 M in 2009
    • 15% increase in gross profit from $3.29 M in 2008 to $3.80 M
    • 86% gross margin compared to 81% in 2008 due to increase in recurring revenue
    • Positive EBITDA of $533,000 in 2009 compared to a loss of $241,000 in 2008
    • This is a net increase of $774,000 when compared to year 2008
  • Operating Costs
    • 8% decrease in annual operating costs from $3.54 M in 2008 to $3.26 M in 2009

Operational Highlights

  • LTE
    • LTE for Q4 was 1,238 in 2009 compared to 1,029 in Q4 2008
      LTE (lease table equivalent) is calculated using the quarterly recurring revenue divided by $3,000.
  • Product Installations
    • During the fourth quarter, DEQ had 67 new installations for a total of new installs in 2009 in the USA and Canada of 207 new installations
    • The fourth quarter installations were done across North America and included major installations completed in September at Chukchansi Casino (20 G3 tables) and Treasure Island (11 G3 tables)
  • Recent News Releases and Information of Interest
    • Commerce Casino installs 15 EZ Baccarat and 15 EZ Trak
    • Monte Carlo in Las Vegas goes G3 on its poker derivative games with the installation of 5 tables
    • Chukchansi Casino installs 20 G3 Systems
    • Treasure Island installs 11 G3 on its poker games
    • Pala Casino installs 10 EZ units
    • MGM Grand installs 8 G3 on its poker games

"2009 was DEQ's first year of North American commercialization and we are more than confident in saying that our products are accepted by the industry and penetrating the market at an encouraging pace", stated Earle G. Hall, President & CEO of DEQ. In mid 2008 we received our first product certification in Nevada and began precommercialization of several product lines. At the same time we began applying for the jurisdictional licenses that are mandatory to commercialize in the targeted jurisdictions. We are very proud to say that we now have 23 jurisdictional licenses in North America with more than 325 products installed in 65 casinos in our first year of commercialization."

Statement of Earnings
    Nov. 30, 2007 Nov. 30, 2008 Nov. 30, 2009
  (Audited) (Audited) (Audited)
  Recurring revenue (1) 2,250,104 2,615,144 3,712,453
  Non recurring revenue 1,331,046 1,471,610 706,612
    3,581,150 4,086,754 4,419,065
Gross Profit 2,754,610 3,296,126 3,795,561
% Gross Margin 77% 81% 86%
Operational Costs (2) (3,204,744) (3,537,478) (3,262,915)
EBITDA (3) (450,134) (241,352) 532,646
Amortization and depreciation (4) (562,754) (1,132,695) (2,228,494)
Other items (693,553) (135,570) 127,705
Net income (loss) (1,706,441) (1,509,617) (1,568,143)
Net income (loss) per share $(0.030) $(0.022) $(0.023)
Additional information      
Recurring Revenue  2,250,104 2,615,144 3,712,453
% Annual Growth 27% 16% 42%
Note 1: Recurring revenue is comprised of Royalties and Equipment rental.
Note 2: Operating costs exclude stock option based compensation.
Note 3: We use EBITDA (Earnings before Stock option based compensation, Interest, Taxes, Depreciation and Amortization) as performance measurements in our financial disclosure. This measure is not recognized under generally accepted accounting principles. The reconciliations above demonstrate how we calculate such measurements from our financial statements.
Note 4: Amortization expense has significantly increased in 2009 explained by the amortization of the licensing rights acquired in July 2008 for an amount of $12 M. These licensing rights are amortized over seven years at a rate of $422,000 per quarter or $1,687,000 per year. In 2008, the Company had recognized only four months of amortization on the licensing rights which represents $564,000 compared with $1,692,000 in 2009 which explains the increased.
Balance Sheets Nov. 30, 2007 Nov. 30, 2008 Nov. 30, 2009
          (Audited) (Audited) (Audited)
Cash and cash equivalents 11,364,112 6,593,357 5,828,981
Current assets (other than cash) 2,180,534 1,860,176 1,696,490
Long-term assets 9,187,762 17,139,836 14,816,416
Total Assets $22,732,408 $25,593,369 $22,341,887
Current liabilities 1,716,162 2,734,291 2,175,579
Long-term liabilities 577,073 2,725,668 1,348,101
Shareholders' equity 20,439,173 20,133,410 18,818,207
Total Liabilities and Equity $22,732,408 $25,593,369 $22,341,887
Number of shares outstanding 69,350,794 70,416,315 69,589,815


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 40 countries such as the USA, Macau, Australia and Canada. DEQ's bonusing solutions and products are present in more than 200 casinos in over 30 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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