|
September 28, 2006 - VendTek Systems
Inc. (TSX-V: VSI) ("VendTek" or "The
Company"), a leading provider of software for prepaid
service distribution, today announces the Company's
financial results for the third quarter ended July 31,
2006.
For the nine month period ended July 31, 2006:
- Revenue was $41,191,000 compared to $26,604,000 for
the same period in 2005, an increase of $14,587,000
or 55%.
- Net income was $519,567 compared to a loss of ($300,009)
for the same nine month period of 2005.
Revenues are mostly comprised of prepaid PIN revenue,
which totaled $40,940,000 in the first nine months of
2006 compared to $26,524,000 in the same period of 2005,
an increase of 54%. License and engineering revenues increased
by $128,000 to $138,000 in Q3 2006 compared to $10,000
in Q3 2005. This increase was due to specialized engineering
services being required by a customer as well as software
licenses issued for a new customer. Systems and parts
sales of $114,000 in the first nine months of 2006, compared
to $70,000 in the same period of 2005, are up by 63% as
a result of increased parts orders from VendTek's legacy
vending machine customers and increased server sales.
Cost of Goods was $38,660,000, or 94% of revenues for
the nine months ended July 31, 2006, compared to $25,579,000,
or 96% of revenues for the nine months ended July 31,
2005. The low margin is indicative of the virtual prepaid
telecommunications industry in which Now Prepay conducts
its business. However, increased sales volumes and supplier
discount options are expected to continue to improve the
margin.
For the three month period ended July 31, 2006:
- Revenue was $14,899,228 compared to $10,718,345 for
the same three month period ended July 31, 2005.
- Net income was $320,033 compared to $77,265 for the
same three month period ended July 31, 2005.
"The third quarter of 2006 is VendTek's best quarter
ever and represents a major turning point in our financial
performance. Our top line growth is continuing to increase
and our net income is improving significantly while our
costs are remaining relatively stable. The statements
represent the ongoing growth of Now Prepay in the Canadian
market and our international business, specifically the
United Arab Emirates, starting to contribute to the bottom
line results. As the president of VendTek and Now Prepay
I am pleased to present these financial statements and
am committed to building shareholder value through the
ongoing growth of the business." Said Doug Buchanan,
President of VendTek Systems Inc.
Partial statements are included below and 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 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.
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.
|
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
|
July
31,
2006
$
(unaudited)
|
|
October
31,
2005
$
|
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash
and cash equivalents
|
1,559,388
|
|
246,616
|
|
Accounts
receivable
|
303,110
|
|
1,198,892
|
|
Inventory
( Note 3)
|
822,117
|
|
763,409
|
|
Prepaid
expenses and deposits
|
25,207
|
|
4,722
|
|
|
|
|
|
2,709,822
|
|
2,213,639
|
|
|
|
|
|
Property
and Equipment ( Note 4)
|
377,445
|
|
204,495
|
|
Intangible
Assets ( Note4)
|
21,133
|
|
21,491
|
|
Deferred
Financing Costs ( Note 5)
|
-
|
|
17,166
|
|
|
|
|
|
3,108,400
|
|
2,456,791
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable and accrued liabilities
|
1,617,642
|
|
2,665,120
|
|
Current
portion of long-term debt ( Note 5)
|
1,868
|
|
495,811
|
|
|
|
|
|
1,619,510
|
|
3,161,902
|
|
|
|
|
|
Long-term
Debt ( Note 5)
|
6,386
|
|
7,523
|
|
|
|
|
|
1,625,896
|
|
3,168,454
|
|
|
|
|
|
Shareholders’ Equity
(Deficit)
|
|
|
|
|
Share
Capital ( Note 6)
|
6,605,181
|
|
5,153,012
|
|
Contributed
Surplus
|
370,334
|
|
147,900
|
|
Equity
Portion of Convertible Debt ( Note 5)
|
34,000
|
|
34,000
|
|
Deficit
|
(5,527,011)
|
|
(6,046,575)
|
|
|
|
|
|
1,482,504
|
|
(711,663)
|
|
|
|
|
|
3,108,400
|
|
2,456,791
|
|
|
|
|
(See accompanying notes to the consolidated financial
statements available at www.sedar.com )
Approved on behalf of the Board:
|
"Doug
Buchanan"
|
|
"Sherri
Macdonald"
|
|
Doug
Buchanan, President and CEO
|
|
Sherri
Macdonald, Director
|
VendTek Systems Inc.
Consolidated Statements of Operations and Deficit
For the Three Months and Nine Months Ended July 31, 2006
and 2005
(unaudited)
|
Three months ended
July 31,
|
|
Nine months ended
July 31,
|
|
2006
$
|
2005
$
|
|
2006
$
|
2005
$
|
|
|
|
|
|
|
|
Revenue ( Schedule)
|
14,899,228
|
10,718,345
|
|
41,191,428
|
26,603,975
|
|
|
|
|
|
|
|
Direct Costs ( Schedule)
|
13,835,641
|
10,196,483
|
|
38,660,342
|
25,579,259
|
|
|
|
|
|
|
|
Gross Profit
|
1,063,587
|
521,862
|
|
2,531,086
|
1,024,716
|
|
|
|
|
|
|
|
Expenses ( Schedule)
|
|
|
|
|
|
|
General and administrative
|
531,727
|
335,775
|
|
1,491,369
|
1,046,784
|
|
Engineering
|
96,922
|
71,922
|
|
261,077
|
200,074
|
|
Selling and marketing
|
114,905
|
36,900
|
|
259,073
|
77,866
|
|
|
|
|
|
|
|
743,554
|
444,597
|
|
2,011,519
|
1,324,724
|
|
|
|
|
|
|
|
Net Income (Loss) For the Period
|
320,033
|
77,265
|
|
519,567
|
(300,009)
|
|
|
|
|
|
|
|
Deficit - Beginning of Period
|
(5,847,041)
|
(6,039,493)
|
|
(6,046,575)
|
(5,662,219)
|
|
|
|
|
|
|
|
Deficit - End of Period
|
(5,527,008)
|
(5,962,228)
|
|
(5,527,008)
|
(5,962,228)
|
|
|
|
|
|
|
|
Net Income (Loss) Per Share – Basic and Diluted
|
0.01
|
-
|
|
0.01
|
(0.01)
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding
|
37,748,044
|
32,401,000
|
|
37,748,044
|
32,401,000
|
|
|
|
|
|
|
(See
accompanying notes to the consolidated financial statements
available at www.sedar.com)
VendTek Systems Inc.
Consolidated Statements of Operations Schedules
For the Three Months and Nine Months Ended July 31,
2006 and 2005
(unaudited)
|
Three
months ended
July
31,
|
|
Nine
months ended
July
31,
|
|
2006
$
|
2005
$
|
|
2006
$
|
2005
$
|
|
Revenue
|
|
|
|
|
|
|
License
and engineering
|
36,232
|
374
|
|
137,992
|
9,942
|
|
Prepaid
PIN
|
14,837,548
|
10,692,249
|
|
40,939,882
|
26,523,678
|
|
Systems
and parts sales
|
25,448
|
25,722
|
|
113,554
|
70,355
|
|
|
|
|
|
|
|
14,899,228
|
10,718,345
|
|
41,191,428
|
26,603,975
|
|
|
|
|
|
|
|
Direct
Costs
|
|
|
|
|
|
|
Commissions
|
263,991
|
182,468
|
|
703,718
|
422,159
|
|
Direct
labour
|
35,510
|
33,424
|
|
199,704
|
109,183
|
|
Foreign
exchange
|
(7,536)
|
4,143
|
|
6,895
|
8,706
|
|
Freight,
shipping and customs
|
13,686
|
4,920
|
|
51,282
|
10,972
|
|
Purchases,
net of rebates
|
13,477,598
|
9,938,589
|
|
37,562,691
|
24,997,033
|
|
Subcontract
and miscellaneous
|
52,393
|
32,939
|
|
136,054
|
31,206
|
|
|
|
|
|
|
|
13,835,642
|
10,196,483
|
|
38,660,342
|
25,579,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative Expenses
|
|
|
|
|
|
|
Accounting,
legal and regulatory fees
|
29,145
|
9,984
|
|
62,995
|
59,142
|
|
Amortization
of deferred financing costs
|
9,238
|
3,964
|
|
17,166
|
11,892
|
|
Amortization
of intangible assets
|
1,632
|
1,321
|
|
4,889
|
3,962
|
|
Amortization
of property, plant and equipment
|
47,294
|
29,596
|
|
120,517
|
82,087
|
|
Bad
debts
|
7,666
|
(10)
|
|
8,636
|
6,622
|
|
Bank
charges and interest
|
6,786
|
5,161
|
|
15,008
|
14,842
|
|
Computer
|
2,787
|
2,516
|
|
12,700
|
11,055
|
|
Interest
on long-term debt
|
26,599
|
14,391
|
|
54,616
|
42,269
|
|
Investor
relations
|
17,308
|
7,640
|
|
48,211
|
22,247
|
|
Office
and miscellaneous
|
45,515
|
43,694
|
|
110,049
|
112,192
|
|
Rent
and utilities (Note 9)
|
24,756
|
23,212
|
|
80,535
|
77,160
|
|
Salaries
and benefits
|
181,154
|
163,018
|
|
590,349
|
499,152
|
|
Stock-based
compensation
|
82,273
|
3,336
|
|
222,432
|
10,008
|
|
Telecommunications
|
39,941
|
26,943
|
|
108,162
|
75,332
|
|
Travel
and promotion
|
9,633
|
1,009
|
|
35,104
|
18,822
|
|
|
|
|
|
|
|
531,727
|
335,775
|
|
1,491,369
|
1,046,784
|
|
|
|
|
|
|
|
Engineering
Expenses
|
|
|
|
|
|
|
Wages
and benefits
|
96,922
|
71,922
|
|
261,077
|
200,074
|
|
|
|
|
|
|
|
Selling
and Marketing Expenses
|
|
|
|
|
|
|
Advertising,
promotion and trade shows
|
9,227
|
1,993
|
|
17,581
|
18,477
|
|
Travel
|
56,366
|
34,907
|
|
134,791
|
56,321
|
|
Wages
and benefits
|
49,312
|
-
|
|
106,701
|
3,068
|
|
|
|
|
|
|
|
114,905
|
36,900
|
|
259,073
|
77,866
|
|
|
|
|
|
|
(See accompanying notes to the consolidated financial
statements available at www.sedar.com)
VendTek Systems Inc.
Consolidated Statements of Cash Flows
For the Three Months and Nine Months Ended July 31,
2006 and 2005
(unaudited)
|
Three
months ended
July
31,
|
|
Nine
months ended
July
31,
|
|
2006
$
|
|
2005
$
|
|
2006
$
|
|
2005
$
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net
Income (Loss) for the period
|
320,033
|
|
77,265
|
|
519,567
|
|
(300,009)
|
|
|
|
|
|
|
|
|
|
Items
not involving cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion
of convertible debenture to face value
|
3,400
|
|
1,700
|
|
6,800
|
|
5,100
|
|
Amortization
of deferred finance charges
|
9,238
|
|
3,964
|
|
17,166
|
|
11,892
|
|
Amortization
of intangible assets
|
1,632
|
|
1,321
|
|
4,889
|
|
3,962
|
|
Amortization
of property and equipment
|
47,294
|
|
29,596
|
|
120,517
|
|
82,087
|
|
Stock-based
compensation
|
82,273
|
|
3,336
|
|
222,432
|
|
10,008
|
|
|
|
|
|
|
|
|
|
Changes
in non-cash operating working capital items
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
1,030,183
|
|
(307,246)
|
|
895,782
|
|
(348,950)
|
|
Inventory
|
16,285
|
|
(108,091)
|
|
(58,708)
|
|
(277,751)
|
|
Prepaid
expenses and deposits
|
(12,520)
|
|
183
|
|
(20,485)
|
|
(1,041)
|
|
Accounts
payable and accrued liabilities
|
(265,003)
|
|
287,567
|
|
(1,047,478)
|
|
556,727
|
|
|
|
|
|
|
|
|
|
Net
Cash Used in Operating Activities
|
1,232,815
|
|
(10,405)
|
|
660,482
|
|
(257,975)
|
|
|
|
|
|
|
|
|
|
| |
