September 22, 2005 - VendTek Systems
Inc. (TSX-V: VSI) ("VendTek" or "The Company"),
a leading provider of software for prepaid service distribution,
is pleased to announce revenues for the nine month period
ended July 31, 2005 of $26,604,000 compared to $14,708,000
for the same period in 2004. VendTek has achieved earnings
of $77,265 for the quarter ended July 31, 2005 compared
to a loss of ($221,882) for the same period in 2004. The
revenues are comprised of prepaid PIN revenues of $26,524,000
(2004 - $14,324,000), license and engineering revenues
of $10,000 (2004 - $49,000), and systems and parts sales
of $70,000 (2004 - $336,000).
The consolidated gross profit for the nine-month period
ending July 31, 2005 increased by 61% to $1,025,000 compared
to $637,000 for the same period of 2004.
"We are very proud to report our first profitable
quarter since the change in our business focus, a momentous
result for VendTek. We have reached and now surpassed
the critical mass needed to produce profitability."
said Paul Brock, President of VendTek Systems Inc. "This
new stage for VendTek will increase our competitiveness
and allow us to build value much faster for our investors.
We appreciate the patience our shareholders have shown
us and we will continue to work hard at improving our
future financial results in the same way that we demonstrated
with this memorable third quarter of 2005."
Purchases of product for sale costs increased by $12,200,000
in the nine-month period ended July 31, 2005 to $26,524,000
when compared to $14,324,000 in the same period of 2004,
an increase of 85%. This expense increases proportionately
with the increase in revenues as do commission payments
to Independent Sales Partners, which have increased by
$267,000 (173%) in 2005 to $422,000 compared to $155,000
in 2004. However, these increased expenses are partially
offset by an $18,000 (11%) reduction in labour, subcontracting
and miscellaneous costs.
General and administrative ("G&A") expenses
have remained virtually constant, increasing by $5,000
or less than one percent, to $1,047,000 for the nine months
ended July 31, 2005 compared to $1,042,000 for the same
period of 2004. Salaries and employee benefits increased
by $17,000 (3%) and office expenses went up by $6,000
(6%). Telecommunications costs remained steady, increasing
by less than 1%. Amortization, banking charges and bad
debt expenses increased $65,000 (120%) primarily as a
result of an increase in amortization costs due to new
terminal purchases. Travel and promotional expenses were
up $3,000 (22%) as a result of increased non-sales related
travel and automotive expenses as well as meals and other
marketing expenses. These increases were offset by reductions
in every other category; accounting and legal fees were
reduced by $28,000 (32%), computer expenses declined by
$10,000 (47%), interest on long-term debt decreased by
$6,000 (13%), rent costs were reduced by $37,000 (32%),
and investor relations expenses decreased by $7,000 (24%).
This is accredited to spending reductions.
Selling and marketing expenditures decreased by $56,000
(42%) to $78,000 for the nine-month period ended July
31, 2005 compared to $134,000 for the same period of 2004.
The decrease is principally due to reduced sales travel
and the reduction of wage expenses.
Net loss from continuing operations for the nine months
ended July 31, 2005 totaled ($300,000) representing a
$433,000 improvement from the results in the same period
of 2004 which produced a net loss of ($733,000). The loss
per share was decreased to $(0.00) per share compared
to the loss of $(0.01) for the same period in 2004. This
was attributed to higher systems revenues, increased virtual
telecommunication sales and new discount payment options
offered by a few suppliers.
The complete statements are available at www.sedar.com.
For further information, please contact Samantha Haynes
at 604.805.4653 or 1-800-806-4958.
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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The TSX Venture Exchange has
not reviewed and does not accept responsibility
for the adequacy or accuracy of this release.
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