VANCOUVER, B.C., August 12, 2003 (PRIMEZONE) -- DataWave (TSX Venture Exchange:DTV) (OTCBB:DWVSF) announces earnings for the first quarter in fiscal 2004 of US$116,854 compared with $102,249 for the same period last year.
Mr. Emanuel, Chairman and CEO, reports, "We have had eight consecutive quarters with positive earnings which show our continued commitment to developing and growing the Company on a profitable basis. Our POS technology has established a dominant position in the Canadian market place and is driving the change in our business from being a seller of prepaid long distance cards to becoming the market leader in adding value to all point of sale stored value telecom and financial products."
A complete analysis of our quarterly results ending June 30, 2003 is provided on our Form-10QSB quarterly report filed on Edgar and will be available on the U.S. Securities and Exchange Commission's web site (www.sec.gov) under DataWave's Central Index Number (CIK) 0001000157.
Fiscal 2004 First Quarter Consolidated Financial Statements:
These financial statements have been prepared by Management in accordance with generally accepted accounting principles in the United States and are reported in U.S. dollars.
DATAWAVE SYSTEMS INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars and presented in accordance
with US GAAP)
(Unaudited)
June 30 March 31
Assets 2003 2003
--------------- --------------
Current
Cash and cash equivalents $ 1,228,115 $ 2,139,063
Accounts receivable and
other 3,834,453 2,031,895
Inventories 1,601,478 1,225,391
Prepaid expenses and deposits 565,792 482,549
Deferred income taxes 79,000 79,000
--------------- --------------
Total current assets 7,308,838 5,957,898
Restricted cash 54,000 54,000
Machinery and equipment, net 1,985,435 1,488,682
Goodwill 1,926,550 1,750,639
Other intangible assets 451,637 442,510
--------------- --------------
Total assets $ 11,726,460 $ 9,693,729
--------------- --------------
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Liabilities
Current
Accounts payable and
accrued liabilities $ 7,637,001 $ 6,092,828
Deferred revenue 96,100 146,420
--------------- --------------
Total liabilities 7,733,101 6,239,248
--------------- --------------
Shareholders' equity
Common shares
Authorized
100,000,000 common shares, no par value
Issued
43,889,334 and 43,889,334 shares issued and
outstanding at June 30, 2003 and
March 31,2003 respectively 15,006,743 15,006,743
Additional paid-in capital 2,725,492 2,725,492
Accumulated other comprehensive
income 467,869 45,845
Accumulated deficit (14,206,745) (14,323,599)
--------------- --------------
Total shareholders' equity 3,993,359 3,454,481
--------------- --------------
Total liabilities and
shareholders' equity $ 11,726,460 $ 9,693,729
--------------- --------------
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DATAWAVE SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in United States dollars and presented in accordance
with US GAAP)
(Unaudited)
For the Three Months ended June 30
2003 2002
--------------- --------------
Revenue
Sales $ 2,366,988 $ 2,692,960
Net agency sales 1,756,870 1,744,190
--------------- --------------
Total revenue 4,123,858 4,437,150
--------------- --------------
Operating costs and expenses
Cost of revenues (Note 2 (k)) 2,449,952 2,917,209
General and administrative 638,329 731,721
Selling and marketing 411,265 365,527
Product development 375,158 259,054
Depreciation and amortization 163,545 57,029
--------------- --------------
Total operating costs and expenses 4,038,249 4,330,540
--------------- --------------
Operating income 85,609 106,610
Other income 9,408 3,675
Gain (loss) on foreign exchange 21,837 (8,036)
--------------- --------------
Net income before income taxes 116,854 102,249
Income taxes - -
--------------- --------------
Net income for the period $ 116,854 $ 102,249
--------------- --------------
--------------- --------------
Net income per share
Basic and diluted $ 0.003 $ 0.002
--------------- --------------
--------------- --------------
Weighted-average number of
common shares outstanding
Basic 43,889,334 43,889,334
--------------- --------------
--------------- --------------
Diluted 43,889,334 43,958,317
--------------- --------------
--------------- --------------
DATAWAVE SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States dollars and presented in accordance
with US GAAP)
(Unaudited)
For the Three Months ended June 30
2003 2002
--------------- --------------
Operating activities
Net income for the year $ 116,854 $ 102,249
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation and amortization 163,545 57,029
Net change in non-cash operating
assets and liabilities
Accounts receivable and other (1,802,558) (221,463)
Inventories (376,087) (78,998)
Prepaid expenses and deposits (83,243) 60,259
Accounts payable and other
accrued liabilities 1,544,173 451,997
Deferred revenue (50,320) (167,798)
--------------- --------------
Net cash provided by operating
activities (487,636) 203,275
--------------- --------------
Investing activities
Restricted cash - (30,000)
Purchase of machinery
and equipment (477,312) (116,890)
--------------- --------------
Net cash (used in)
investing activities (477,312) (146,890)
--------------- --------------
Increase (decrease) in cash (964,948) 56,385
Cash and cash equivalents,
beginning of year 2,193,063 1,911,888
--------------- --------------
Cash and cash equivalents,
end of year $ 1,228,115 $ 1,968,273
--------------- --------------
--------------- --------------
About DataWave (http://www.datawave.ca)
DataWave has been an innovator and developer of prepaid and stored-value programs since it was founded in 1994. DataWave pioneered a system that allows for point-of-sale authorization and reload of high value, high shrinkage products, such as cash cards and phone cards. The System works equally well over the Internet, through intelligent free-standing vending machines or with various POS devices, including cash registers.
DataWave Systems Inc.
John Gunn General Manager, CFO
Legal Notice Regarding Forward-Looking Statements:
Statements in this news release which are not purely historical are forward-looking statements, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this release include, but are not limited, references to: the potential for our Point of Sale (POS) systems capabilities to significantly increase our volume and market share; our belief that initiatives could bear fruit in fiscal 2004 and positively impact our bottom line; and our belief that we are on the fast track to become an international leader in point of sale stored value products.
It is important to note that the company's actual results and outcomes may differ materially from those contained in the forward-looking statements contained in this release. Factors that could cause actual results to differ materially include, but are not limited to, risks and uncertainties such as: continued market acceptance of our existing products and whether we will achieve broad acceptance of our new products -- particularly our Point of Sale (POS) systems -- in the new markets that we have identified; and the overall success of our company in general.
Although we believe that the beliefs, plans, expectations and intentions contained in this letter are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Readers should refer to the risk disclosures outlined in our annual report on Form 10-KSB for the year ended March 31, 2003, filed with the United States Securities and Exchange Commission.
"DataWave" is a registered trademark of the Company. All other trademarks and trade names referred to are the property of their respective owners.
"The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release."