|
Vancouver, BC, February 16, 2006 - VendTek Systems
Inc. (TSXV: VSI) ("VendTek" or "The Company"),
a leading provider of software for prepaid service distribution,
is pleased to announce the Company's audited financial
statements for the year ended October 31, 2005. VendTek
realized record revenues of $38,354,035 for the year
ended October 31, 2004 and net loss decreased by 72%
from ($1,308,700) to ($365,501).
Key highlights of VendTek's fiscal 2005 year-end results
include:
- Revenue growth of 77% during 2005; 2004's revenue
growth was 88%.
- The consolidated gross profit for 2005 increased
approximately 100% to $1,547,445 compared to $771,840
in 2004.
- G&A expenses were $1,504,720 or 4% of revenues during
2005 compared to approximately 7% of revenues in 2004.
- Net loss decreased by 72% for the year ended 2005.
- Net loss per share for fiscal 2005 decreased by
75% to ($0.01) compared to ($0.04) for fiscal 2004.
"We have continued the trend of increasing revenues
through expansion of our Canadian subsidiary (Now Prepay)
and we expect that trend to continue. The addition of
new products and services to the Canadian market as well
as the launch of business in foreign markets is expected
to fuel additional growth in 2006." said Paul Brock,
president of VendTek.
Complete results for the year ended October 31, 2005 may
be accessed via the Company's web site at www.vendteksys.com
via the SEDAR web site at www.sedar.com or by e-mailing
shaynes@vendteksys.com and having them sent directly to
you.
For more information please contact Samantha Haynes at
1-800-806-4958 or 604.805.4653 or via e-mail investment@vendteksystems.com.
About VendTek
VendTek develops and licenses automated transaction
system software and supporting technologies that improve
the efficiency of product delivery, reduce costs to
clients and offer superior safety measures. 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 by completely eliminating
physical cards and vouchers. For further information
please visit the Company's websites www.vendteksys.com
and www.nowprepay.com.
| The TSX Venture Exchange has
not reviewed and does not accept responsibility
for the adequacy or accuracy of this release.
|
VendTek Systems Inc.
Consolidated Balance Sheets
As at October 31, 2005 and 2004
|
|
2005
$
|
|
2004
$
|
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
246,616
|
|
508,443
|
|
Accounts
receivable
|
1,198,892
|
|
621,333
|
|
Inventory
[Note 3]
|
763,409
|
|
373,898
|
|
Prepaid
expenses and deposits
|
4,722
|
|
4,604
|
|
|
|
|
|
|
|
2,213,639
|
|
1,508,278
|
|
|
|
|
|
|
Property,
Plant and Equipment [Note 4]
|
204,495
|
|
230,802
|
|
|
|
|
|
|
Intangible
Assets [Note 4]
|
21,491
|
|
26,863
|
|
|
|
|
|
|
Deferred
Finance Fees [Note 5]
|
17,166
|
|
33,022
|
|
|
|
|
|
|
|
2,456,791
|
|
1,798,965
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable and accrued liabilities
|
2,665,120
|
|
2,131,375
|
|
Current
portion of long-term debt [Note 5]
|
495,811
|
|
6,486
|
|
|
|
|
|
|
|
3,161,902
|
|
2,137,861
|
|
|
|
|
|
|
Long-term
Debt [Note 5]
|
7,523
|
|
486,400
|
|
|
|
|
|
|
|
3,168,454
|
|
2,624,261
|
|
|
|
|
|
|
Shareholders'
Deficit
|
|
|
|
|
Share
Capital [Note 6]
|
5,153,012
|
|
4,802,923
|
|
|
|
|
|
|
Contributed
Surplus
|
147,900
|
|
-
|
|
Equity
Portion of Convertible Debt[Note 5]
|
34,000
|
|
34,000
|
|
|
|
|
|
|
Deficit
|
(6,046,575)
|
|
(5,662,219)
|
|
|
|
|
|
|
|
(711,663)
|
|
(825,296)
|
|
|
|
|
|
|
|
2,456,791
|
|
1,798,965
|
|
|
|
|
|
(See accompanying notes to the consolidated financial
statements)
Approved on Behalf of the
Board:
|
"Paul
Brock"
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|
"Stuart
Wooldridge"
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Paul
Brock, President and Chief Executive Officer
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|
Stuart
Wooldridge, Director and Audit Committee
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VendTek Systems Inc.
Consolidated Statements of Operations and Deficit
For the Years Ended October 31, 2005 and 2004
|
|
2005
$
|
|
2004
$
|
|
|
|
|
|
|
Revenues
[Schedule]
|
38,354,035
|
|
21,741,821
|
|
|
|
|
|
|
Direct
Costs [Schedule]
|
36,806,590
|
|
20,969,981
|
|
|
|
|
|
|
Gross
Profit
|
1,547,445
|
|
771,840
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
[Schedule]
|
|
|
|
|
|
1,504,720
|
|
1,441,106
|
|
Product
development
|
267,175
|
|
274,733
|
|
Selling
and marketing
|
141,051
|
|
186,232
|
|
|
|
|
|
|
|
1,912,946
|
|
1,902,071
|
|
|
|
|
|
|
Loss
Before Undernoted Item
|
(365,501)
|
|
(1,130,231)
|
|
Other
Item
|
|
|
|
|
Write-down
of inventory
|
-
|
|
(178,469)
|
|
|
|
|
|
|
Net
Loss for the Year
|
(365,501)
|
|
(1,308,700)
|
|
|
|
|
|
|
Deficit
- Beginning of Year, as previously reported
|
(5,662,219)
|
|
(4,353,519)
|
|
Adjustment
to reflect change in accounting for employee
stock options (Note2(m))
|
(18,855)
|
|
|
|
Deficit
- Beginning of Year, restated
|
(5,681,074)
|
|
|
|
|
|
|
|
|
Deficit
- End of Year
|
(6,046,575)
|
|
(5,662,219)
|
|
|
|
|
|
|
Net
Loss Per Share-Basic and Diluted
|
(0.01)
|
|
(0.04)
|
|
|
|
|
|
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Weighted
Average Shares Outstanding
|
34,151,496
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|
29,914,000
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(See accompanying notes to the consolidated financial
statements)
VendTek Systems Inc.
Consolidated Statements of Operations Schedules
For the Years Ended October 31, 2005 and 2004
|
|
2005
$
|
|
2004
$
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
Sale
of prepaid telecommunication services
|
38,249,136
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|
21,295,350
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|
Systems
and parts sales
|
76,109
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|
322,983
|
|
License
and engineering
|
28,790
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|
123,488
|
|
|
|
|
|
|
|
38,354,035
|
|
21,741,821
|
|
|
|
|
|
|
Direct
Costs
|
|
|
|
|
Commissions
|
603,827
|
|
350,242
|
|
Direct
labour
|
176,745
|
|
167,003
|
|
Foreign
exchange loss (gain)
|
10,280
|
|
(3,321)
|
|
Freight,
shipping, customs and postage
|
53,148
|
|
20,754
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|
Prepaid
telecommunication purchases, net rebates
|
35,906,287
|
|
20,407,835
|
|
Subcontract
and miscellaneous
|
56,303
|
|
27,468
|
|
|
|
|
|
|
|
36,806,590
|
|
20,969,981
|
|
|
|
|
|
|
General
and Administrative Expenses
|
|
|
|
|
Accounting,
legal and regulatory fees
|
68,266
|
|
106,791
|
|
Amortization
of deferred finance charges
|
15,856
|
|
15,856
|
|
Amortization
of property, plant and equipment
|
131,461
|
|
93,054
|
|
Bad
debts
|
10,526
|
|
2,173
|
|
Bank
charges and interest
|
19,482
|
|
22,086
|
|
Computer
|
17,883
|
|
24,224
|
|
Interest
on long-term debt
|
56,061
|
|
62,260
|
|
Investor
relations
|
40,010
|
|
36,522
|
|
Office
and miscellaneous
|
105,175
|
|
124,905
|
|
Rent
and utilities [Note 7]
|
102,086
|
|
147,687
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|
Salaries
and benefits
|
666,786
|
|
684,059
|
|
Salaries
and benefits-stock based compensation [Note 6]
|
108,259
|
|
-
|
|
Directors
Fees- stock based compensation [Note 6]
|
18,181
|
|
-
|
|
Telecommunications
|
107,017
|
|
102,044
|
|
Travel
and promotion
|
37,671
|
|
21,892
|
|
|
-
|
|
(2,447)
|
|
|
|
|
|
|
|
1,504,720
|
|
1,441,106
|
|
|
|
|
|
|
Product
Development Expenses
|
|
|
|
|
Wages
and benefits
|
267,175
|
|
274,733
|
|
|
|
|
|
|
|
267,175
|
|
274,733
|
|
|
|
|
|
|
Selling
and Marketing Expenses
|
|
|
|
|
|
24,438
|
|
27,053
|
|
Travel
|
107,351
|
|
143,371
|
|
Wages
and benefits
|
9,262
|
|
11,958
|
|
Write-down
of demonstration inventory
|
-
|
|
3,850
|
|
|
|
|
|
|
|
141,051
|
|
186,232
|
|
|
|
|
|
(See accompanying notes to the consolidated financial
statements)
VendTek Systems Inc.
Consolidated Statements of Cash Flows
For the Years Ended October 31, 2005 and 2004
|
|
2005
$
|
|
2004
$
|
|
Operating
Activities
|
|
|
|
|
|
(365,501)
|
|
(1,308,700)
|
|
Items
not involving cash
|
|
|
|
|
Accretion
of convertible debenture to face value
|
6,800
|
|
6,800
|
|
Amortization
of deferred finance charges
|
15,856
|
|
15,856
|
|
Amortization
of property, plant and equipment
|
131,461
|
|
93,054
|
|
Stock-based
compensation
|
126,440
|
|
-
|
|
Gain
on disposal of property, plant and equipment
|
-
|
|
(2,447)
|
|
Write-down
of inventory
|
-
|
|
178,469
|
|
|
|
|
|
|
|
(84,944)
|
|
(1,016,968)
|
|
|
|
|
|
|
|
(433,443)
|
|
350,954
|
|
|
|
|
|
|
Net
Cash Provided by (Used In) Operating Activities
|
(518,387)
|
|
(666,014)
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Issuance
of convertible promissory note
|
-
|
|
193,500
|
|
Repayment
of convertible promissory note
|
-
|
|
(193,500)
|
|
Repayment
of long-term debt
|
(7,818)
|
|
(11,901)
|
|
Shares
issued
|
-
|
|
1,224,032
|
|
Cost
of issuance of shares
|
-
|
|
(9,548)
|
|
Warrants
exercised
|
350,089
|
|
-
|
|
|
|
|
|
|
Net
Cash Provided By Financing Activities
|
342,271
|
|
1,202,583
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Proceeds
on disposal of property, plant and equipment
|
|
|
7,905
|
|
Purchase
of property, plant and equipment
|
(85,710)
|
|
(175,248)
|
|
|
|
|
|
|
Net
Cash Used In Investing Activities
|
(85,710)
|
|
(167,343)
|
|
|
|
|
|
|
Net
Increase (Decrease) in Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents - Beginning of Year
|
508,443
|
|
139,217
|
|
|
|
|
|
|
Cash
and Cash Equivalents - End of Year
|
246,617
|
|
508,443
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash
Financing Activities
|
|
|
|
|
|
-
|
|
79,432
|
|
|
|
|
|
|
Supplemental
Disclosures
|
|
|
|
|
Interest
paid
|
56,061
|
|
55,460
|
|
Income
taxes paid
|
-
|
|
-
|
(See accompanying notes to the consolidated financial
statements) |
|
