Levis (Quebec), February 2, 2012. DEQ Systems Corp. (TSX-V: DEQ) (“DEQ” or the “Company”) announces today the filing of its annual financial results for the year ended November 30, 2011. The Consolidated Financial Statements are available on SEDAR (www.sedar.com) and DEQ’s website. A conference call will be held on Friday, February 3, 2012 at 11am EST to present and discuss these results. Those interested in participating should dial toll free 1 (800) 736-4594 or (416) 981-9000. A PowerPoint presentation will be available on DEQ’s website in the Investors/Financial Reports/Presentation section to support the call content.

2011 ANNUAL RESULTS HIGHLIGHTS:

Financial Metrics

• Revenue
  • 82% increase in direct leasing revenue from $1,436,000 in 2010 to 2,615,000 in 2011.
  • 92% compound annual growth rate of direct leasing revenue over the last three years.
  • 4% decrease in total revenue from $4,854,000 in 2010 to $4,647,000 in 2011 which includes the $704,000 loss of royalties from the end of the Severn Contract.
  • 81% gross margin in 2011 which was comparable to previous year.
     
• Operating Costs
  • 12% increase in operating costs from $3,840,000 in 2010 to $4,317,000 in 2011 explained by the Asian commercialization as well as the important increase in direct leasing in North America.
     
• EBITDA
  • Negative EBITDA of $536,000 in 2011 compared to a positive $191,000 in 2010. This is explained mostly by the loss of $704,000 of royalties in 2011 from Severn Enterprises following the settlement on the Severn project on March 3, 2011.
     
• Cash Flow
  • During the fiscal year, our cash position decreased by $2,090,000 explained mostly by the investment activites in tangible and intangible assets for a total of $1,143,000 to continue our growth, the cash flow loss from operating activities of $532,000 as well as the change in non-cash working capital items of $416,000.
  • DEQ had a cash position of $1,842,000 as of November 30, 2011.

Operational Highlights

• Product Installations
  • In 2011 DEQ increased its installation base by 573 units and 84 units were either removed during the year or were on free trials yielding 489 net units worldwide. These net units generated an average annual recurring revenue of $3,500 per unit for a total estimated amount of $1,700,000 additional revenue. 
  • As of November 30, 2011, DEQ had 1,117 directly installed products worldwide and 375 products installed through distributors worldwide for a total of 1,492 products in operation worldwide.
     
• Operating Costs
  • DEQ’s operating costs have increased by 12% explained by the following items:
    • Over 500 new installations in North America.
    • Two majors installations completed in Malaysia and Macau.
    • Increase of 22 new jurisdictional licenses going from 28 licenses to 50 licenses.
       

“With more than 1,500 units installed worldwide, DEQ’s products have proven their acceptance and viability”, stated Earle G. Hall, President & CEO of DEQ. “With 573 new units installed in 2011 and two major installations completed in Asia, we are very confident in the potential growth of all of our product lines in 2012. While the loss of royalties from the Severn Project negatively affected our cash position in 2011, our accelerated growth has largely compensated for this and we look to the future with great excitement as we see the growth in the USA, Macau and other key markets.”

ABOUT DEQ

DEQ Systems Corp. (TSXV: DEQ) is a customer centric company that delivers best of breed table game technology related products to the global gaming industry that adds value and increases client revenue. DEQ provides table game bonusing technology, table games, table game results tracking and jackpot connectivity solutions to more than 275 casinos in 30 countries. DEQ is an intellectual property focused company that has an extensive patent portfolio of more than 20 patents recognized in 50 countries.  For further information, please visit www.deq.com.

For more information, please contact:

Earle G. Hall
President & CEO
DEQ Systems Corp.
p. (418) 839-3012
e. earle.hall@deq.com

Francois Proulx
Chief Financial Officer
DEQ Systems Corp.
p. (418) 839-3012
e. francois.proulx@deq.com

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TSX Venture does not accept any responsibility regarding the accuracy of the information contained in this press release.

Forward-looking statements contained in this Press Release involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements.