D-BOX Technologies Inc.

D-BOX Technologies Inc.

November 28, 2008 11:43 ET

D-BOX announces its second quarter results

    LONGUEUIL, QC, Nov. 28  - D-Box Technologies Inc. "D-BOX"
(DBO.A on the TSX venture exchange) announces revenues of $1,004,910 for the
second quarter of its 2009 fiscal year, ended September 30, 2008 which
compares to revenues of $1,148,733 for the second quarter of the 2008 fiscal
year, ended September 30, 2007. The net loss for the quarter amounts to
$1,484,603 ($0.0159 per share) which compares to a net loss of $784,909
($0.0085 per share) for the corresponding quarter of the fiscal 2008 year.-------------------------------------------------------------------------
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    Selected Financial Information

    For the three month period
     ended September 30,                 Q2/2009       Q2/2008       Q1/2009
    (in dollars, except loss        September 30  September 30       June 30
     per share)                             2008          2007          2008
    -------------------------------------------------------------------------
                                    -----------------------------------------
    Revenues                           1,004,910     1,148,733     1,133,533
    Net Loss                          (1,484,603)     (784,909)   (1,061,822)
    Basic and diluted loss per
     share                              ($0.0159)     ($0.0085)     ($0.0116)
                                    -----------------------------------------
                                           As of         As of
                                    September 30,     March 31,
                                            2008          2008

    Cash and cash equivalents          3,604,747     4,376,881
    Short-term investments             4,123,376     4,074,953
                                    -----------------------------------------

                                    -----------------------------------------
    Total short-term liquidities       7,728,123     8,451,834
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
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    Additional Highlights

    - Investments made so far in business development lead after the end of
      the quarter to new licensing agreements, including a first in the video
      game sector.

      - Agreement with Black Box, an Electronic Arts studio, one of the most
        significant interactive software companies in the world (video
        games).

      - Agreement with Universal Studios Home Entertainment. D-BOX Motion
        code(TM) will be embedded to selected Blu-ray(TM) titles produced by
        this studio (home theatre).

    - D-BOX expands its Board of Directors with the election of Mr. Louis
      Brunel and Mr. Strath Goodship at its most recent annual general
      meeting.

      - Mr. Brunel, whom will act as Chairman of the Board has founded and
        managed corporations in Canada, Europe and in the United States
        mostly in the cable television and telecommunications industries and
        has participated in the implementation of approximately $2 billion
        dollars of financings.

      - Mr. Goodship currently acts as President and Chief Executive Officer
        of Miranda Technologies Inc, a Canadian corporation which develops,
        manufactures and markets high-performance hardware and software for
        the television broadcast industry.Commenting the quarterly accomplishments, Mr. Claude Mc Master, President
and Chief Executive Officer of D-BOX stated: "The recognition of the potential
and the acceptance of our technology continues to progress with key players of
the industry as witnessed by our most recent agreements with Universal Studios
Home Entertainment and Electronic Arts. Although, the negotiation of such
agreements requires significant resources, we believe these investments are
necessary to establish our technology's recognition as well as the
notoriousness of the D-BOX brand which will eventually lead to increased
sales. We can rely on a solid balance sheet, which now allows us to accelerate
the company's development while focusing on the most promising sectors."

    Three-month period ending September 30, 2008

    For the second quarter of fiscal 2009 ended September 30, 2008, revenues
totalled $1,004,910 compared with $1,148,733 for the corresponding period last
year. This 13% decline resulted from sales of home entertainment products,
which fell to $715,564 from $856,596, whereas sales to manufacturing clients
in the commercial entertainment segment held steady at $289,346 compared with
$292,137 for the same period last year.
    For the second quarter, gross profit amounted to $331,449 compared with
$502,654 for the prior year corresponding period. This change in gross profit
is mainly due to fixed production cost increases resulting from the expansion
and outfitting of our production facilities. This variance in gross profit was
mainly due to higher manufacturing overhead caused by the expansion and
outfitting of our production facilities.
    For the second quarter of fiscal 2009, net loss amounted to $1,484,603
($0.0159 per share) compared with a net loss of $784,909 ($0.0085 per share)
for the corresponding period last year. This increase in the quarterly loss is
mostly explained by lower gross profit and by an increase in sales and
marketing, administrative and research and development expenses.
    The financial information in regards to the three-month period ended
September 30, 2008 which is described above as well as the information in
regards to the six-month period ended September 30, 2008 described hereafter
should be read in conjunction with the financial statements and the interim
management and discussion analysis dated September 30, 2008. These documents
are available at www.sedar.com.

    Six-month period ended September 30, 2008

    For the six-month period ended September 30, 2008, revenues amounted to
$2,138,443, up 10% from $1,951,271 for the corresponding period last year.
This revenue growth was driven by a 32% increase in sales of home
entertainment products to $1,574,700 from $1,192,180 a year ago. This increase
resulted from the addition of new points of sale, including the expansion of
the Corporation's network of specialty stores, the positioning of resources
and sales and marketing initiatives, as well as increased market share
prompted by new product launches over the past year. Furthermore, sales to
manufacturers in the commercial entertainment segment fell 26%, totalling
$563,743 in the first six months of fiscal 2009 compared with $759,091 for the
corresponding period of 2008. While, they remained significant, the relative
importance of sales generated from the arcades market fell from 39% of total
revenues last year to 26% of total revenues for the current fiscal year.
    For the six-month period ended September 30, 2008, gross profit amounted
to $797,034 compared with $782,103 for the corresponding period of the
previous year. This gross margin decline results primarily from an increase in
fixed production costs.
    For the six-month period, net loss amounted to $2,546,425 ($0.0275 per
share) compared with $1,782,759 ($0.0238 per share) for the corresponding
period last year. The increase in net loss for the six-month period is mostly
explained by lower gross profit and by an increase in sales and marketing,
administrative and research and development expenses.

    Extension of the performance warrants held by Deluxe Digital Studios,
    Inc.

    D-Box announces that 800,000 of the 1,500,000 "bonus warrants" held by
Deluxe Digital Studios, Inc. have been amended by extending their expiry date
from August 25, 2009 to September 30, 2009. The bonus warrants were issued by
D-Box on August 25, 2006 in connection with services provided to D-Box by
Deluxe Digital Studios, Inc."

    Outlook

    Generally speaking, D-BOX will focus on three main areas of development;
video games, traditional movie theatres and home theatre.
    Following the signature, shortly after the end of the quarter of a first
licensing agreement with a video game development studio, D-BOX aims over the
course of the next few quarters to negotiate other such agreements while
pursuing its discussions with gaming device manufacturers to make the D-BOX
technology compatible with their equipment. The conclusion of such a step
would allow D-BOX to access a significant number of players. For the
manufacturers, the D-BOX technology could prove a significant differentiation
factor in a highly competitive market where the gain or the loss of a few
market share points can represent significant amounts of money.
    In regards to commercial entertainment, the Company is pursuing its
discussions with theatre owners in a few major North-American cities as well
as with movie studios with the intent of presenting a first feature
presentation incorporating audio, video and motion (AVM). Eventual penetration
of this new market could contribute increasing the visibility of the D-BOX
technology and in the mid-term could translate into a significant source of
income either through the sale of systems, royalties on tickets sold or the
execution of service contracts.
    Current economic conditions may create challenging markets for the sale
of D-BOX products and have an impact on the Company's future profitability.

    About D-BOX

    D-BOX Technologies designs and manufactures high-technology motion
systems destined mainly for the entertainment industry. Its unique, patented
technology uses D-BOX Motion Code(TM) specifically programmed for each film,
TV program or video game, resulting in motion that is perfectly synchronised
with on-screen action. By forming strong industry alliances, D-BOX's
award-winning motion technology is creating a global standard in the
entertainment world. For more information, please visit www.d-box.com.
    D-BOX is a registered trademark and D-BOX Motion Code is a trademark of
D-BOX Technologies Inc. Other names are for informational purposes only and
may be trademarks of their respective owners.

    Disclaimer in regards to Forward-Looking Statements

    Certain statements included herein, including those that express
management's expectations or estimates of our future performance, constitute
"forward-looking statements" within the meaning of applicable securities laws.
Forward-looking statements are necessarily based upon a number of estimates
and assumptions that, while considered reasonable by management at this time,
are inherently subject to significant business, economic and competitive
uncertainties and contingencies. Investors are cautioned not to put undue
reliance on forward-looking statements. We disclaim any intent or obligation
to update publicly these forward looking statements, whether as a result of
new information, future events or otherwise.

    The TSX Venture Stock Exchange does not assume any responsibility as to
    the relevance or the accuracy of this press release.
    %SEDAR: 00012304EF



Contact Information

  • Mr. Luc Audet, Chief Financial Officer, D-Box
    Technologies Inc., (450) 442-3003, extension: 296, laudet@d-box.com; Mr. Marc
    Jasmin CMA, Partner, Jasmin-Dumais Financial Communications Inc., Investor
    Relations, (514) 231-2360, marc@comjamais.com, mjasmin@d-box.com