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Vancouver, BC, February 25, 2008 - VendTek Systems
Inc. (TSXV: VSI) ("VendTek" or "The Company"),
a leading of provider automated transaction systems
software, is pleased to announce the Company's financial
results for the year ended October 31, 2007. VendTek
realized revenues of $90.823 million and earnings of
$769 thousand ($0.02 per share) for the year.
Key highlights of VendTek's fiscal 2007 year-end results
include:
- Revenues increased $32.805 million or 57% from
2006.
- Overall gross margins increased to 6.2% for 2007,
compared to 6.1% for 2006.
- Earnings per share of $0.02 for the year ended October
31, 2007.
- Increase in the number of terminals in Canada from
9,979 in 2006 to 12,474 in 2007.
- Increased international software license sales from
United Arab Emirates.
Key highlights of VendTek's three months ended October
31, 2007 include:
- Revenues for the fourth quarter of 2007 were $28.996
million compared to $16.827 million for the same period
in 2006. This represents an increase of $12.169 million
or 72%.
- Eighth consecutive quarter of profitability.
- Launch of electronic prepaid network into the United
States and international expansion with a license
agreement in Africa.
"We are pleased with our financial results for the
year, particularly, our revenue growth. Our business in
Canada and the United Arab Emirates continues to grow
as we continue to see a shift from traditional plastic
card sales to electronic distribution. This is happening
world-wide and we believe that we are well positioned
to benefit from this change," said Doug Buchanan,
President and Chief Executive Officer of VendTek Systems
Inc.
"We believe our technology increases efficiencies
in the supply chain for the distribution of prepaid products
and services," says Buchanan. "We are committed
to increasing our footprint for our eFresh™ automated
transaction software. To do this, we continue invest in
our technology platform, sales, marketing and business
development. The benefit of these investments are long-term,
but necessary for VendTek to remain a leader."
Nurez Khimji, VendTek's Chief Financial Officer, says
sustained profitability and continued investment in market
development have positioned VendTek for continued growth.
"We generated $1.8 million in cash flow from our
operations in 2007 compared to $1.1 million in 2006. This
64% increase in cash flow reflects the strong financial
results for the year. Our earnings, however, were affected
by many non-cash expenses that are not tax deductible.
These include stock option expenses of $739 thousand (compared
to $291 thousand in 2006). We expect that our stock option
expenses will decline significantly after the second quarter
of 2008. This will improve our earnings, " says Khimji.
Mr. Buchanan and Mr. Khimji will discuss the financial
results on Tuesday, February, 26th, at 6:45am (PST). Access
to the conference can be obtained by dialing 416-644-3420
or 1-800-732-0232.
Complete results for the year ended October 31, 2007 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 division, Now Prepay Corp. and its
subsidiaries 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.
Financial Highlights
Consolidated Balance Sheets
October 31, 2007 and 2006
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Current
Assets
|
|
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|
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$
329,431
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$
763,664
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Accounts
receivable
|
3,357,431
|
|
1,985,832
|
|
|
4,820,339
|
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1,102,654
|
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Prepaid
expenses and deposits
|
27,401
|
|
14,467
|
|
Future
income tax asset
|
91,948
|
|
170,500
|
|
|
8,626,550
|
|
4,037,117
|
|
|
|
|
|
|
Equipment
|
932,063
|
|
328,170
|
|
Intangible
Assets
|
805,753
|
|
19,689
|
|
Goodwill
|
522,349
|
|
-
|
|
|
|
|
|
|
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$ 10,886,715
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$
4,384,976
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|
|
|
|
|
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Liabilities
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|
|
|
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Current
Liabilities
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|
|
|
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Accounts
payable and accrued liabilities
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$
5,983,508
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$
1,950,831
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Income
taxes payable
|
83,800
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|
135,137
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Current
portion of capital lease obligations
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148,926
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|
272,698
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|
|
6,216,234
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|
2,358,666
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|
|
|
|
|
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Capital
lease obligations
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50,553
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|
79,325
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|
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6,266,787
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2,437,991
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|
|
|
|
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Shareholders'
Equity
|
|
|
|
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Share
Capital
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7,990,337
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6,804,081
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Contributed
Surplus
|
1,156,204
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|
438,545
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Deficit
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(4,526,613)
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(5,295,641)
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|
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4,619,928
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|
1,946,985
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|
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$
10,886,715
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$
4,384,976
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|
|
|
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Financial Highlights
Continued
Consolidated Statements of Operations and Deficit
For the years ended October 31, 2007 and 2006
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Revenues
|
|
|
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Prepaid
telecommunication
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$ 89,850,450
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$ 57,600,072
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Hardware
and equipment
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82,109
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|
171,890
|
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Software
license and services
|
890,389
|
|
246,116
|
|
|
|
|
|
|
|
90,822,948
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58,018,078
|
|
|
|
|
|
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Cost
of revenues
|
|
|
|
|
Prepaid
telecommunication
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85,140,337
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|
54,451,829
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Hardware
and equipment
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63,371
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|
31,625
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|
|
|
|
|
|
|
85,203,708
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54,483,454
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|
|
|
|
|
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5,619,240
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3,534,624
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|
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Operating
Expenses
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|
|
|
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General
and administrative
|
3,183,671
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1,806,132
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Selling and marketing
|
484,185
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|
422,790
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Research and development
|
472,995
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|
359,452
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Amortization
|
373,952
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|
175,158
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Interest on capital lease obligations
|
157,238
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|
55,521
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|
|
|
|
|
|
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4,672,041
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2,819,053
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|
|
|
|
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Earnings
before income taxes
|
947,199
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|
715,571
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Income
tax expense (recovery)
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|
|
|
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Current
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129,571
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|
135,137
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Future
|
48,600
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(170,500)
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|
|
|
|
|
| |
178,171
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(35,363)
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|
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|
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Net
earnings
|
769,028
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|
750,934
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| Basic and fully diluted net earnings
per share |
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