D-BOX Technologies Inc.

D-BOX Technologies Inc.

June 24, 2008 03:00 ET

D-BOX releases its 2008 Annual Financial Results and reviews its highlights

    LONGUEUIL, QC, June 24  - D-BOX Technologies Inc. - (TSX-V:
DBO.A), announces today its results for the fiscal year ended March 31, 2008
and takes advantage of this opportunity to review the main highlights
impacting on its last fiscal year.Operational Highlights

    - Completion of an $11.5 M financing during the second and third quarter

      - Helped strengthening the sales team, speeding-up marketing and
        business development efforts towards movie studios, game producers
        and entertainment equipment manufacturers.

    - Increased business development efforts leading in particular to the
      completion of license agreements with the following movie studios:
      Walt Disney Home Entertainment, Sony Picture Home Entertainment and
      Lions Gate.

      - Strengthening of the credibility of the D-BOX motion technology
        before its resellers and retailers networks as well as in the general
      - Better positioning for the potential introduction of the D-BOX
        Technology in the movie theatre market.

    - Acceleration of the marketing of the SRP product range (Screening Room

      - Lower cost product, allowing the targeting of a larger potential
      - Better adapted product for the developing specialised electronic
        retailers' network which complements the traditional network of
        specialty installers.

    - Technology integration in a specifically designed movie theatre product

      - Well received demonstration at an important trade show in March 2008.
      - Current discussions with owners of movie theatres as well as with
        studios, targeting at the introduction of D-BOX chairs in movie
        theatres during the course of the next year.

    Commenting the performance of the year, Claude Mc Master, President and
Chief Executive Officer declared: "Over the past twelve months, we have
reached several important strategic goals. The completion of new licence
agreements with renowned movie studios has allowed for an increase of the
recognition and visibility of our technology, which in turn has helped the
expansion of our distribution network. This enlarged network combined with the
introduction of more affordable products and increased business development
efforts in the movie theatre and video game sectors make us foresee a
promising future, which should translate into increased revenues and the
completion of new license agreements over the next quarters."

    Fiscal Year ended March 31, 2008

    For the fiscal year ended March 31, 2008, D-BOX announces revenues of
$3.625 M and a net loss of $4.9 M ($0.060 per share) compared to revenues of
$4.088 M and a net loss of $2.1 M ($0.037 per share) for the previous year.
    The Corporation presents a sound balance sheet with cash and cash
equivalent value close to $8.5 M as of March 31, 2008.

    Financial highlights
    (in thousands of dollars,      Fiscal Year ended      Three months ended
     except for per-share amounts)      March 31                March 31
                                    2008        2007        2008        2007
    Information from the
     Consolidated Statements
     of Operations and Deficit

    Revenues                       3,625       4,088         725       1,121
    Gross profit                   1,321       1,768         236         462
    Net loss and comprehensive
     results                      (4,917)     (2,119)     (1,603)       (460)
    Loss per share -
     basic and diluted            (0,060)    (0,0368)     (0,022)    (0,0072)

    Information from the
     Consolidated Statements
     of Cash Flows

    Cash flows relating to
     operating activities         (4,648)     (2,263)       (797)       (305)
    Additions to property,
     plant and equipment            (407)       (312)       (136)        (50)
    Additions to intangible assets  (114)        (87)        (31)        (12)

    Information from the
     Consolidated Balance Sheet
     as of March 31

    Cash, cash equivalent and
     short-term investments        8,452       2,731       8,452       2,731
    Working capital                9,401       3,717       9,671       3,717
    Total assets                  11,790       5,543      11,790       5,543
    Long-term debt,
     including current portion        37         772          37         772
    Total liabilities              1,195       1,940       1,195       1,940
    Shareholders' equity          10,594       3,603      10,594       3,603

    For the year ended March 31, 2008, revenues amounted to $3,625,434
compared to $4,088,140 the previous year, an 11% reduction. This decrease
results from the reduction in the arcade sector deliveries, from $2,237,437 to
$1,459,841, a 36% drop. On the other hand, revenues of the home theatre D-BOX
products increased from $1,815,703 to $2,165,590, a 19% increase. The relative
impact of the arcade sector revenues over total revenues should decrease since
D-BOX will going forward, emphasize its sales efforts on the home and theatre
entertainment products.
    The variation in exchange rate had a negative impact on revenues. Sales
invoiced in US dollars represent 79% of the 2008 total revenues and the
increase of the Canadian dollar had a negative impact of $326,000 on total
revenues, when compared to the previous fiscal year results.
    For fiscal 2008, gross profit amount to $1,320,634 compared to $1,768,353
the previous year. This reduction in gross profit resulted primarily from the
negative impact of the exchange rate variation and the reduction in sales in
comparison with the corresponding period.
    In 2008, marketing and sales expenses amounted to $3,496,863 compared to
$1,885,774 the previous year. This important increase stemmed from several
factors, including an increase in sales resources and development costs
related to new markets, in particular the business development before the
movie theatre owners as well as our increased efforts to penetrate the home
video game and the movie theatre markets. In the fourth quarter, in accordance
with an agreement with a film exhibition print distribution firm, the
Corporation has also accrued a charge of $280,514, equivalent to the value of
the warrants issued following the completion of the agreement with Disney Home
entertainment and to the marketing of several movies incorporating the D-BOX
motion code.
    Finally, the research and development costs amounted to $1,039,082 for the
fiscal year ended March 31, 2008 compared to $413,870 the previous year. This
increase results primarily from a higher payroll and from costs related to the
development of new products launched during the year or to be launched during
the next quarters. Additional resources have been hired in order to build a
video game library compatible with our technology.

    Three month period ended March 31, 2008

    For the fourth quarter ended March, 31, 2008, revenues amounted to
$725,046, a 35% decrease in comparison with the $1,120,738 comparative figure
the previous year. This reduction is mainly attributable to the reduction of
"OEM" revenues in the arcade sector, which amounted to $262,745 for the
quarter, in comparison to $731,876 in the corresponding quarter of the
previous year. Sales of D-BOX products rose from $388,863 to $462,301. For the
last quarter, the exchange rate variation had a negative impact of $88,000 on
revenues when compared to the corresponding period the previous year.
    For the last quarter of fiscal 2008, the gross profit amounted to $236,213
compared to $461,070 for the corresponding quarter of the previous year. This
decrease of gross profit resulted primarily from reduced revenues. For the
quarter ended March 31, 2008, marketing and sales expenses amounted to $1,279,
503 compared to $555,413 for the fourth quarter 2007.
    For the fourth quarter ended March, 31, 2008, the net loss amounts to $1.9
M ($0.022 per share) compared to a net loss of $0.460 M ($0.007 par share) for
the fourth quarter ended March 31, 2007.


    On the short and midterm, the D-BOX strategy aims at two targets:
increased revenues and technology recognition confirming it as a new worldwide
motion standard in the entertainment industry.
    These goals will generate specific actions to enlarge the North-American
distribution network of the corporation, especially through new specialized
electronic stores where D-BOX was not present at the beginning of fiscal 2008.
At the same time, D-BOX will put in place resellers training programs and
increase investments in marketing.
    With already completed licence agreements with five movie studios, three
of which amongst the largest in the industry, D-BOX intends to pursue its
actions primarily before the movie studios considering adopting the new high
definition Blu-ray(R) standard, thus increasing the number of studios
supporting its technology.
    To reach the double objective of revenue growth and technology
recognition, D-BOX also targets the completion, during the next year, of an
agreement with at least one movie theatre owner in order to have one theatre
equipped with its technology. D-BOX believes this strategy will enhance its
visibility and induce an increased interest for its products in the home
entertainment market. On a longer term, this new market could generate
recurrent revenues by way, as an example, of royalty fees on ticket sales in
addition to the revenues resulting from the sale of equipment to initially
build the theatres.
    Finally, D-BOX also intends to speed-up the development of the home video
game sector. To this end, D-Box intends to introduce a less expensive game
chair, targeting a market segment wider than the actual one. D-BOX foresees
the completion of an agreement with a console manufacturer, and at least one
of the largest game producers, while still adding new compatible games in the
actual library.

    About D-BOX

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

    Forward-Looking Statements

    Certain statements included herein, including those that express
management's expectations or estimates of D-BOX 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. We caution that such forward-looking
statements involve known and unknown risks, uncertainties and other risks that
may cause our actual financial results, performance, or achievements to be
materially different from our estimated future results, performance or
achievements expressed or implied by those forward-looking statements.
Numerous factors could cause actual results to differ materially from those in
the forward-looking statements, including without limitation, D-BOX ability to
achieve increased market acceptance for its product offerings and penetrate
new markets; the existence of undetected errors or similar problems in the
Corporation products; D-BOX ability to manage its growth; D-BOX ability to
compete successfully; potential liabilities; maintaining D-BOX intellectual
property rights and litigation involving intellectual property rights; D-BOX
dependence on the expertise of its key personnel; and D-BOX access to
sufficient capital to fund its future requirements. This list is not
exhaustive of the factors that may affect any of D-BOX forward-looking
statements. Investors are cautioned not to put undue reliance on
forward-looking statements. All subsequent written and oral forward-looking
statements attributable to D-BOX or persons acting on its behalf are expressly
qualified in their entirety by this notice. These forward looking statements
are made on their respective dates and D-BOX disclaim any intent or obligation
to update publicly these forward-looking statements, whether as a result of
new information, future events or otherwise, unless required by applicable
laws. Risks and uncertainties about the Corporation business are more fully
discussed in our Annual Report.

    The TSX Venture Exchange does not accept any responsibility for the
    adequacy or accuracy of this release.%SEDAR: 00012304EF

Contact Information

  • Normand Chartrand, Chief Financial Officer,
    D-BOX Technologies Inc., (450) 442-3003, ext 258, nchartrand@d-box.com; Marc
    Jasmin, President, Jasmin Financial Communications Inc., (514) 231-2360,