March 31, 2005 - VendTek Systems
Inc. (TSX-V: VSI) ("VendTek" or "The Company"),
a leading provider of software for prepaid service distribution,
announces $7,569,908 in revenues for the three months
ended January 31, 2005. Revenues increased $3,818,798
or 101% for the three month period ended January 31, 2005
compared to $3,751,110 in the same period of 2004.
The revenues are comprised of prepaid PIN revenues of
$7,541,098 compared to prepaid PIN revenues of $3,562,370
for the same period of 2004, license and engineering revenues
of $3,846 compared to $26,550 in the same period of 2004,
and systems and parts sales of $24,964 compared to $162,190
in the same period of 2004.
License and engineering revenues were down $22,704 (85.5%)
due to a reduction of engineering service services supplied.
Systems and parts revenues also decreased in the period
by $137,000 (84.6%) due to fewer orders.
The consolidated gross profit for the first quarter of
2005 was $230,023 compared to $188,367 in the same period
in 2004, an increase of 22%. The high revenues generated
by Now Prepay accounted for the majority of consolidated
gross profits that remain indicative of the low margin
virtual prepaid telecommunications industry in which Now
Prepay conducts its business. The margin increase is positively
correlated to revenue increase.
For the eighth consecutive quarter, revenues have continued
to grow. The increase is a result of the continued growth
of VendTek's wholly owned subsidiary Now Prepay Corp.
As at January 31, 2005, there were 6,012 terminals deployed
and this number reflects a growth of 108% compared to
the 2,879 terminals that were active at the same time
last year.
The ongoing installation of POS terminals across Canada
for the sale of virtual prepaid telecommunications vouchers
provides meaningful revenues which are augmented by the
wholesale portion of Now prepay's prepaid cellular business.
Paul Brock, President of VendTek Systems Inc. said, "We
have been focused on improving our financial strength
to benefit our shareholders. These first quarter results
are demonstrating our sincerity in doing so. We have achieved
positive cash flow from activities of $324,251 for the
first quarter of 2005 compared to using cash of ($297,939)
in the same period of 2004. As our sites continue to increase
through Now Prepay, and the revenues continue with double
digit growth, our margins will keep getting better and
better. Our customer growth speaks to the satisfaction
of our technology and we want to dominate the prepaid
distribution network in Canada and other markets through
licensing our technology to as many terminals as there
are in the marketplace."
General and administrative expenses decreased by $29,944
or (8%) to $337,068 compared to $367,012 in the same period
in 2004. Telecommunications, amortization and bad debt
expenses rose by $26,165 (104%) due to increased costs
associated with Now Prepay telecommunication lines as
well as an increase in amortization costs due to new terminal
purchases.
The increases were offset by reductions in almost every
other category; accounting and legal fees decreased by
$21,393 (59%), computer expenses decreased by $3,649 (58%),
banking charges decreased by $2,037 (38%), office expenses
decreased by $7,733 (20%), rent decreased by $10,299 (26%)
and salary expenses were reduced by $19,242 (10%); all
due to decreased spending. Long term interest and investor
relations expenses increased by $2,744 (17%) and $2,285
(65%) respectively. Travel and promotional expenses were
up $5,367 (190%) due to increased travel and automotive
expenses as well as meals and other marketing expenses.
Selling and marketing expenses decreased by $15,826 (51%)
to $15,090 for the first quarter of 2005 compared to $30,916
for the same quarter of 2004. The decrease is due to reduced
sales travel, advertising and trade show expenses. The
reduction of expenses was offset slightly by wages paid
on contract of $2,703.
Net loss for the quarter was ($182,882) or ($0.01) per
share compared to ($258,342) or $(0.01) per share for
the same quarter of 2004. This decrease in loss was due
to higher systems revenues and increased virtual telecommunication
sales.
The complete statements are available at www.sedar.com.
For more information, or to receive news and updates as
they become available, please contact Samantha Haynes
at 604.805.4653 or 1-800-806-4958 or investment@vendteksys.com.
About VendTek and Now Prepay (
www.vendteksys.com / www.nowprepay.com)
VendTek Systems Inc. develops and licenses eFresh™
software and related technologies, which provides electronic
distribution of prepaid telecommunication and financial
services. VendTek is commercializing the eFresh™
software under license to create sustainable and recurring
revenues. VendTek's customers and its subsidiaries,
Now Prepay Corp. (in Canada) and VendTek Systems Technologies
(in China), are using eFresh™
software to build electronic, prepaid services networks
which enable consumers to purchase prepaid services
via POS and self-serve terminals connected to a central
eFresh™
server. This system creates significant value through
improved efficiencies compared to the traditional distribution
paradigm. eFresh™
reduces shrinkage and inventory requirements while improving
consumer access to prepaid services since it is completely
electronic and eliminates physical cards and vouchers.
This release contains forward-looking statements within
the meaning of the "safe harbor'' provisions of
the U.S. Private Securities Litigation Reform Act of
1995. These statements are based on management's current
expectations and beliefs and are subject to a number
of risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements. The Company assumes no obligation to update
any forward-looking information contained in this news
release.
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not reviewed and does not accept responsibility
for the adequacy or accuracy of this release.
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