DEQ Systems : Reports Revenue of $2.3 Million and EBITDA of $273,000 for the 2015 Second Quarter

LEVIS,QC and LAS VEGAS, NV, July 30, 2015 /PRNewswire/ - DEQ Systems Corp. (TSX-V: DEQ) ("DEQ" or the "Company") announces the filing of its second quarter financial results for the period ended May 31, 2015. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ's website. A conference call will be held on Friday, July 31, 2015 at 8:30 am ET to present and discuss these results. Those interested in participating in the call should dial toll free 1 [phone] or [phone]. Please note that the conference call replay will be available until August 14, 2015 by dialing 1 [phone] or 1 [phone]. The passcode for the replay is 93819011.

2015 SECOND QUARTER RESULTS HIGHLIGHTS:

Financial Metrics

    --  Revenue
        --  11% increase in table systems revenue from $1,327,000 in Q2-2014 to
            $1,467,000 in Q2-2015.
        --  14% increase in proprietary table games revenue from $561,000 in
            Q2-2014 to $641,000 in Q2-2015.
        --  20% increase in total revenues from $1,926,000 in Q2-2014 to
            $2,304,000 in Q2-2015.
        --  11% increase in gross profit, before non-cash items, from $1,709,000
            in Q2-2014 to $1,898,000 in Q2-2015.

    --  Operating Costs
        --  Operating costs excluding amortization and stock option expenses
            increased from $1,355,000 in Q2-2014 to $1,625,000 in Q2-2015,
            mostly due to increased professional fees related to the Talisman
            litigation and from costs related to increasing the depth of our R&D
            and operational resources.

    --  EBITDA
        --  EBITDA of $273,000 in Q2-2015 compared to $354,000 in Q2-2014 and
            $199,000 in Q1-2015.

    --  Liquidity and Cash Flow
        --  DEQ had a cash position of $2,221,000 as of May 31, 2015 compared to
            $1,654,000 as of November 30, 2014.
        --  Positive cash flow from operating activities before changes in
            non-cash working capital items of $675,000 in the first 6 months of
            2015 compared to $535,000 in the same 6-month period of 2014.

Operational Highlights

    --  As of May 31, 2015, DEQ had 2,348 units worldwide (1,980 units installed
        directly and 368 units installed by our distributors) compared to 2,065
        units worldwide as of May 31, 2014.
    --  During the second quarter of 2015, a total of 97 net units were
        installed compared to a net decline in installations of 24 units in the
        prior year second quarter. The Company is generating an average
        recurring net lease of $3,580 per unit per year on its worldwide
        installed base of 2,348 units.

"DEQ made meaningful progress in executing our strategic plan in the second quarter," stated Joe Bertolone, President and Chief Executive Officer of DEQ. "The Company continued to build on its operating momentum and invest in our human resources wisely. I am confident that we will continue to make progress in strategically positioning our company for continued growth."

    Statement of
     Earnings
    ------------

                       Second Quarter         Six-Month Period

                                      May 31,                  May 31,      May 31,       May 31,

                                         2014                      2015          2014           2015

                                  (unaudited)              (unaudited)  (unaudited)   (unaudited)
                                   ==========               ==========   ==========    ==========


    Table Systems                   1,327,000                 1,467,000     2,649,000      2,845,000

    Proprietary Table
     Games                            561,000                   642,000     1,090,000      1,247,000
                                      -------                   -------     ---------      ---------

    Total recurring
     revenue                        1,888,000                 2,109,000     3,739,000      4,092,000

    Non recurring
     revenue                           38,000                   195,000        64,000        334,000
                                       ------                   -------        ------        -------

    Total Revenue                   1,926,000                 2,304,000     3,803,000      4,426,000


    Gross Profit (1)                1,709,000                 1,898,000     3,338,000      3,786,000

     % Gross margin                       89%                      88%          88%           86%


    Operating expenses
     (1)                           1,355,000                 1,625,000     2,783,000      3,314,000
                                    ---------                 ---------     ---------      ---------


    EBITDA (2)                        354,000                   273,000       555,000        472,000


    Stock based
     compensation                       6,000                    45,000        13,000         53,000

    Depreciation &
     Amortization
     expenses                         671,000                   635,000     1,331,000      1,288,000

    Financial expenses
     (revenue)                          3,000                     1,000         5,000          3,000

    Foreign exchange
     (gain) loss                      110,000                   155,000        78,000      (154,000)
                                      -------                   -------        ------       --------

    Net Income (Loss)               (436,000)                (563,000)    (872,000)     (718,000)
                                     ========                  ========      ========       ========

    Net Income (Loss )
     per share                       $(0.006)                 $(0.008)     $(0.012)      $(0.010)

    Note 1:                  Gross profit and operating expenses
                             excluding non-cash items such as
                             depreciation, amortization and
                             stock-based compensation.


    Note 2:                  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.

     Financial
     Position
     ---------

                   May 31, 2014              November 30, 2014            May 31, 2015
                                
    (unaudited)                              
    (unaudited)
                                                               (audited)
                                                                ========


     Cash
     and
     cash
     equivalents                  $1,332,000                   $1,654,000     $2,221,000

     Current
     assets
     (other
     than
     cash)                         2,612,000                    1,571,000      1,964,000

     Long-
     term
     assets                        5,448,000                    5,479,000      4,132,000
                                   ---------                    ---------      ---------

     Total
     Assets                       $9,391,000                   $8,704,000     $8,317,000
                                  ==========                   ==========     ==========


     Current
     liabilities                   1,100,000                    1,275,000      1,490,000

     Shareholders'
     equity                        8,291,000                    7,429,000      6,827,000
                                   ---------                    ---------      ---------

     Total
     Liabilities
     and
     Equity                       $9,391,000                   $8,704,000     $8,317,000
                                  ==========                   ==========     ==========


     Number
     of
     shares
     outstanding                  71,682,000                   71,682,000     71,682,000
                                  ==========                   ==========     ==========

ABOUT DEQ

DEQ Systems Corp. (TSXV: DEQ) is a customer-centric company that delivers best of breed table game technology related products to the global gaming industry that adds value and increases client revenue. DEQ provides table game bonusing technology, table games, table game results tracking and jackpot connectivity solutions to more than 300 casinos in 30 countries. DEQ is an intellectual property focused company that has an extensive patent portfolio of more than 20 patents recognized in 50 countries. 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.