VANCOUVER, B.C., March 20, 2003 (PRIMEZONE) -- VendTek Systems Inc. (TSX Venture Exchange:VSI) ("VendTek" or "The Company"), a leading provider of automated transaction technology, announces a record $2,207,833 in revenues for the three months ended January 31, 2003. Revenues increased $1,841,427 or 503% compared to $366,406 in the same period of 2002.
Paul Brock, President of VendTek Systems Inc. said: "These first quarter financial statements represent a completely different revenue source from the past. They demonstrate that our new business model is working and we are beginning to see the results in top line revenues."
Almost 100% of revenues are now derived from VendTek's new business, the e-Fresh(tm) software system. The e-Fresh(tm) system utilizes a proprietary network of terminals or POS devices and a central server, to provide a secure electronic distribution network for prepaid goods and services to consumers in real time. For additional information visit our newly designed website www.vendteksys.com. Gross margin for the quarter totaled $60,289 or 2.8% compared to $89,925 or 24% reported in the same period last year.
The change is attributable to the change of business and specifically to the fact that the margins on prepaid cellular and prepaid long distance vouchers are small -- direct costs are significant because VendTek has to purchase the voucher inventory from the cellular companies to store on the Now Prepay Corp server. The new transaction revenue model represents a base of ongoing revenues that will generally be more consistent than revenues that the legacy business provided in the past. Under the new model, and with a larger market for its new business, VendTek can now focus on and expect to aggressively expand its business and grow its revenues and gross profit.
Expenses increased by $49,853 or 16% when compared to the same period in 2002 due to product rollout and costs associated with marketing, selling, and distributing the new e-Fresh( system. Travel expenses increased as the products were rolled out in international markets. Additional information about these markets will be announced shortly.
As the Company experienced staffing changes and an increase in expenses, the net loss per share is ($0.01) or ($306,984) compared to ($0.02) or ($227,495) for the same period last year.
The complete statements are available at www.sedar.com.
Management is committed to aggressively growing the e-Fresh(tm) system and product rollout. Management believes that the new business focus will have a positive impact on shareholder value. Please contact the Company or our Communications and Investor Relations department with comments or questions, 604.940.2239. The
e-Fresh(tm) enabled POS terminals distribute prepaid cellular airtime and long distance from Canada's national service providers. The electronic inventory is stored on a central server and distribution is through a secure network. The usage is similar to paying by a debit card where a keypad is used to select airtime minutes or dollar values. A receipt is printed containing a unique PIN number that is then dialed into a cell phone or telephone. The PIN number is downloaded in real time, is single use, and doesn't need to be inventoried by the retailer. Consumers using e-Fresh terminals benefit from improved convenience and product selection.
In Canada, the market for cellular phone time recharges is expected to reach $800 million annually by 2004. Similarly, the market for prepaid long distance is expected to increase to $500 million by 2004. According to the Canadian Wireless Telecommunications Association there are 10.5 million Canadian cellular subscribers of which 2.6 million are prepaid users. Please visit our newly designed website www.vendteksys.com For more information, or to receive news and updates as they become available, please contact Samantha Haynes at 604.940.2239.
About VendTek and Now Prepay (www.vendteksys.com / www.nowprepay.com)
VendTek Systems Inc. develops, markets, and sells e-Fresh(tm), which is a suite of software applications use to electronically distribute prepaid telecommunication products and financial services. Commercialization of e-Fresh(tm) under license is VendTek's strategy to create sustainable and recurring revenues.
VendTek's customers and its subsidiaries, Now Prepay Corp. and VendTek Systems Technologies (Beijing), are using e-Fresh(tm) software to build electronic, prepaid services networks which enable consumers to purchase prepaid services via POS and self-serve terminals connected to a central server. This system creates significant value through improved efficiencies compared to the traditional distribution paradigm. e-Fresh(tm) 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.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.