VendingData(TM) Corporation Reports Full Year and Fourth Quarter
2003 Financial Results LAS VEGAS, March 25 /PRNewswire-FirstCall/
-- VendingData(TM) Corporation (BULLETIN BOARD: VNDC) today
reported financial results for its fiscal year and fourth quarter
ended December 31, 2003. Revenues for the full year 2003 totaled
$6.7 million, a 93 percent increase from the prior year level of
$3.5 million. Revenues in 2003 consisted of SecureDrop(R) sales of
$2.2 million (an increase of 30 percent over2002), shuffler rentals
of $1.0 million, shuffler sales of $2.1 million, an increase of
approximately $1.95 million over 2002, and Deck Checker(TM) sales
(a new product line launched in 2003) of $1.4 million. (Logo:
http://www.newscom.com/cgi-bin/prnh/20020325/LAM034LOGO ) The
Company reported a net loss of $7.8 million or $0.96 per share
compared to a net loss of $6.2 million or $0.81 per share in 2002.
Factors contributing to the net loss for 2003 were consulting,
finance and legal fees attributable to capital raises of
approximately $850,000, and legal costs of approximately $400,000
related to the Shuffle Master lawsuit. VendingData's(TM) gross
margin for 2003 was 38 percent, an improvement from the 27 percent
gross margin for 2002. As VendingData(TM) transitions from a
development stage company to an operating company, management
believes that gross margin will improve further due to more
efficient purchasing and manufacturing and the cost benefits of its
decision to manufacture products in China. Selling, general and
administrative expenses (SG&A) increased to $6.3 million in
2003, compared to $4.5 million in the previous year, while as a
percentage of revenue, SG&A fell by 34 percent compared to
2002. The increase was primarily due to expenses related to the
private placement of debt, the public offering of common stock,
legal expenses associated with the Shuffle Master lawsuit, and
transitional costs associated with establishing manufacturing in
China. Research and development costs for new shuffler and
SecureDrop(R) products were $1.0 million, an increase of $200,000
or 25 percent. VendingData(TM) expects this trend of increasing
cost to continue as it accelerates the introduction of new products
into 2004. Interest expenses in 2003 increased by $1.0 million to
$2.9 million, reflecting the additional debt incurred by the
Company to fund its expansion. The retirement of a significant
portion of debt and the conversion to common shares in 2003 and
early 2004 will eliminate approximately $2.0 million of interest
expense, annually. Cash and equivalents on December 31, 2003 were
$11.5 million or $0.69 per share compared to $1.8 million at
December 31, 2002. Accounts receivable (trade) increased to $2.4
million primarilydue to the installation of the SecureDrop(R)
System at Paris Las Vegas and Bally's Las Vegas, the conversion of
shuffler rentals to purchases, and the sale of Deck Checkers(TM)
through the use of long-term sales contracts. Inventories increased
to $4.2 million from $1.9 million reflecting the purchase of Deck
Checkers(TM) and related components and SecureDrop(R) components.
Inventory levels will be reduced to fulfill early 2004 demand.
Total liabilities have decreased from $18.1 million at December 31,
2002 to $9.9 million at December 31, 2003 primarily mainly due to
the retirement of $17.9 million in convertible debt through a
combination of cash payments and conversion to common stock.
VendingData's(TM) book value increased to $0.85 per shareat
December 31, 2003 from $(1.32) per share at December 31, 2002, and
its current ratio is a solid 2.4 to 1. Revenues for the fourth
quarter were $390,000, a reduction from the pre-announced (February
19, 2004) guidance of $600,000 and compares to third quarter
revenues of $2.46 million. Company management cited factors
influencing its fourth quarter revenue as (1) the Company's focus
on the successful completion of its public common stock offering in
December 2003 absorbed valuable resources, (2) the nearly
four-month delay in the public offering resulted in production
delays, (3) the delay in receiving final regulatory approval by the
State of Washington for the Deck Checker(TM) until January 2004
caused deliveries to be delayed, and (4) the seasonality of the
fourth quarter, which is typically weak due to scheduling and
training issues during the holiday season. The event subsequent to
the fourth quarter guidance that caused a further reduction was a
contract reversal requested by the new management of the Harrah's
New Orleans Casino resulting in the removal of Random Ejection
Shufflers(TM) installed in September of 2003. The reduction of
revenue at year-end 2003 arising our of the contract reversal
amounted to $139,000. The Company reported a net loss applicable to
common stockholders of $3.4 million or $0.36 per share for the
fourth quarter of 2003. VendingData's(TM) gross profit during the
fourth quarter totaled ($215,084) reflecting the fixed costs that
were charged to cost of goods sold and the low revenue. The Company
expects its gross margin to improve as it benefits from lower costs
associated with the transfer of its manufacturing operations to
China and as economies of scale are achieved through increased unit
production. The Company's SG&A for the fourth quarter increased
$680,000 over the previous quarter to $2.0 million. The increase
primarily reflects $899,000 of non-reoccurring items associated
with financing costs of $658,000, disposition of assets (shufflers)
of $141,000, and bad debt reserves of $100,000. Interest expense in
the quarter totaled $769,000 and is expected to be reduced by
$500,000 per quarter going forward as a result of the $17.9 million
pay down in 2003 of debt following the December 2003 equity
offering. Steven J. Blad, Vending Data's(TM) CEO, commented, "We
spent the year transitioning from a development stage company to a
commercial entity with operations in both the U.S. and China. While
our company has demonstrated reasonable year-over-year growth, our
interrupted progress in the fourth quarter is unacceptable.
Consequently, we determined that it was imperative that we bring in
a highly experienced chief operating officer to assist in the
management and development of our company in the U.S. while I work
towards building a strong foundation for manufacturing and
international sales in China. Mike Jahnke and I, together with our
board of directors, have laid out a plan that should enable our
company to grow revenue by a factor of two, year-over-year, gain
market share and achieve cash flow breakeven during the second half
of 2004." QUARTER HIGHLIGHTS AND RECENT DEVELOPMENTS Effective
February 17, 2004 H. Michael Jahnke assumes the position of Chief
Operating Officer of VendingData(TM) Corporation Mr. Jahnke has
spent the past 15 years in senior operating positions of
leading-edge technology companies. He most recently served as vice
president of operations, corporate secretary and (acting) CFO for
WireCACHE, Inc., a designer and builder of application accelerator
network appliances; vice president of sales and marketing for Fios,
Inc., a leading provider of electronic discovery services to the
legal community; and, vice president of worldwide sales operations
for Sequent Computer Systems, a worldwide leader in large-scale
multiprocessor open systems enterprise solutions. VendingData(TM)
installed five PokerOne(TM) Shufflers for field trial in Macau,
China. Two Random Ejection Shufflers(TM) were also installed in
STDM's Lisboa Casino on February 20, 2004 VendingData(TM) signed a
field trial contract that provides for a direct sale option with
Sociedade de Turismo e Diversoes de Macau (STDM) -- The Macau
Gaming Company founded by Stanley Ho in 1962 -- to install five
PokerOne(TM) units in the poker pit of the Pharaoh Palace Casino.
Installation will begin in early May 2004. In addition,
VendingData(TM) installed two Random Ejection Shufflers(TM) in the
baccarat card pit of the Crystal Palace at the Lisboa Casino, the
flagship property of STDM VendingData(TM) Corporation's Deck
Checker(TM) received product approval from the Washington State
Gaming Commission In February 2004, Deck Checker(TM) received
product approval from the Washington State Gaming Commission.
VendingData(TM) has already received purchase orders from 22 of
approximately 50 potential targeted casinos in the state of
Washington. VendingData(TM) Corporation awarded official licenses
to operate in China as an independent enterprise VendingData(TM)
was awarded the Registration Certificate of Foreign Enterprises for
Permanent Office and Manufacturing in China with the authorization
to establish a permanent office in China as an enterprise with
foreign investment, business licenses, and certificate of taxation
registrations, most of which have effective durations of 11 to 14
years. The certification process involved applications for six
licenses in Guangdong province and local Chinese government
authorities, including the Director General of State Administration
for Industry and Commerce of the People's Republic of China.
VendingData(TM) Corporation retires $17.9 million of debt As a
result of the debt reduction, the Company's interest expense will
decline by approximately $500,000per quarter. On December 18, 2003,
VendingData(TM) Corporation completed its common stock offering of
5,500,000 shares priced at $5.00 per share All shares were offered
by the Company, which raised total net proceeds of approximately
$25 million, after commissions and expenses. The proceeds were used
to retire a substantial portion of the Company's long and
short-term debt and will be used to increase product inventory and
for general corporate purposes. As of January 8, 2004, the Company
had approximately $2.4 million of long-term lease debt, $3.9
million short-term debt, approximately 17,127,799 million shares
outstanding, of which insiders own approximately 48.13 percent
excluding derivatives. The fully diluted share count as of January
8, 2004 was approximately 21,753,392 million shares. CONFERENCE
CALL VendingData(TM) has scheduled a conference call to discuss
fourth quarter and full year 2003 financial results with the
investment community for 4:30 p.m. (ET) today. Conference Call
Details: Date/Time: Thursday, March 25, 2004 -- 4:30 p.m. (ET)
Telephone Number: 800-901-5217 International Dial-In Number:
617-786-2964 Participant Passcode: 26709463 It is recommended that
participants phone-in at least 10 minutes before the call is
scheduled to begin. The conference call can also be accessed on the
Internet through CCBN at http://www.fulldisclosure.com/. A replay
of the conference call in its entirety will be available
approximately one hour after its completion for 7 days by dialing
888-286-8010 (U.S.), 617-801-6888 (International) and entering the
passcode 40535482. About VendingData(TM) Corporation
VendingData(TM) Corporation is a manufacturer and distributor of
products for the gaming industry including the SecureDrop(R)
System, Deck Checker(TM) and Random Ejection Shuffler(TM) line. The
Company's products are currently installed in casinos throughout
the world, including Caesars Palace, Circus Circus, Harrah's
Entertainment, Luxor, Oneida Bingo & Casino, Sunset Station and
the Venetian in the United States, and in casinos in Argentina,
China, Columbia, Korea, Malaysia, Peru, United Kingdom and Uruguay.
Visit the VendingData(TM) website at http://www.vendingdata.com/ .
This release contains forward-looking statements. Such statements
reflect and are subject to risks and uncertainties that could cause
actual results to differ materially from expectations. Factors that
could cause actual results to differ materially from expectations
include, butare not limited to, the following; the success of the
transition of our manufacturing and assembly to China, changes in
the level of consumer or commercial acceptance of the Company's
existing products and new products as introduced; competitive
advances; acceleration and/or deceleration of various product
development and roll out schedules; higher than expected
manufacturing, service, selling, administrative, product
development and/or roll out costs; current and/or unanticipated
future litigation; regulatory and jurisdictional issues involving
VendingData(TM) Corporation or its products specifically, and for
the gaming industry in general; general and casino industry
economic conditions; the financial health of the Company's casino
and distributor customers both nationally and internationally; and
the risks and factors described from time to time in the Company's
reports filed with the Securities and Exchange Commission,
including, but not limited to the company's Form 10-QSB for the
quarter ended September 30, 2003, and, once filed, the Company's
Annual Report on form 10-KSB for the year ended December 31, 2003.
For further information, please contact John Spina, Chief Financial
Officer of VendingData(TM) Corporation, +1-702-733-7195, ; orYvonne
L. Zappulla, Managing Director of Wall Street Investor Relations
Corp., +1-845-680-0300, , for VendingData(TM) Corporation.
VENDINGDATA CORPORATION Statements of Operations Three Months
Twelve Months Ended Ended December 31, 2003 2003 2002 Sales
$203,332 $5,667,247 $2,063,709 Rental 175,983 1,023,544 1,399,968
Other 10,597 20,128 16,622 389,912 6,710,919 3,480,299 Operating
expenses: Cost of sales 604,996 4,171,687 2,541,130 Selling,
general and administrative 2,004,074 6,307,661 4,455,241 Research
and development 300,788 1,010,558 810,327 Total operating expenses
2,909,858 11,489,906 7,806,698 Loss from operations (2,519,946)
(4,778,987) (4,326,399) Interest expense, unrelated parties 652,561
2,361,991 1,477,765 Interest expense, related parties 116,183
529,742 388,622 Loss on disposition of assets 141,460 141,369 --
Total interest expense, net 910,204 3,033,102 1,866,387 Net loss
$(3,430,150) $(7,812,089) $(6,192,786) Basic loss per share $(0.36)
$(0.96) $(0.81) Weighted average shares outstanding 9,547,291
8,134,1737,625,814 VENDINGDATA CORPORATION Balance Sheet December
31, December 31, 2003 2002 ASSETS Current assets: Cash and cash
equivalents $11,526,664 $1,778,297 Current portion of accounts
receivable, trade, net of allowance for uncollectables of $125,530
and $25,530 2,354,054 106,791 Due from affiliate 31,802 30,593
Other receivables 29,836 39,305 Inventories 4,150,414 1,850,051
Prepaid expenses 52,028 236,579 Total Current Assets 18,144,798
4,041,616 Equipment rented to customers, net of accumulated
depreciation of $316,245 and $1,406,574 608,555 1,353,925 Property
& equipment, net of accumulated depreciation of $1,859,206 and
$1,422,313 1,063,951 593,253 Intangible assets, net of accumulated
amortization of $288,203 and $191,520 1,282,088 352,603 Due from
affiliate 118,800 118,800 Accounts receivable, trade, net of
current portion, less unamortized discount 1,140,984 -- Deferred
expenses 250,697 100,000 Deposits 1,284,827 868,520 Other assets
265,478 638,029 $24,160,178 $8,066,746 LIABILITIES AND
STOCKHOLDERS' EQUITY DEFICIENCY Current liabilities: Leases
payable, current portion $2,237,073 $2,286,243 Accounts payable
1,727,460 1,084,637 Accrued expenses 135,859 385,570 Accrued wages
343,697 249,147 Accrued interest 344,751 461,308 Deferred revenues,
current portion 171,875 Short-term debt 270,743 904,743 Convertible
debt, current portion 2,368,077 -- Customer deposits 178,805
386,819 Total current liabilities 7,778,340 5,758,467 Deferred
revenues, net of current portion 219,890 Convertible debt, net of
current portion -- 8,853,072 Leases payable, net of current portion
1,916,723 3,497,859 9,914,953 18,109,398 Stockholders' equity
deficiency: Preferred stock, $.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding -- -- Common stock,
$.001 par value, 25,000,000 shares authorized, 16,765,580 And
7,625,814 shares issued and outstanding 16,766 7,626 Additional
paid-in capital 58,810,806 26,719,980 Deficit (44,582,347)
(36,770,258) Total stockholders' equity deficiency 14,245,225
(10,042,652) Total liabilities and stockholders' equity deficiency
$24,160,178 $8,066,746
http://www.newscom.com/cgi-bin/prnh/20020325/LAM034LOGO
http://photoarchive.ap.org/ DATASOURCE: VendingData Corporation
CONTACT: John Spina, Chief Financial Officer of VendingData(TM)
Corporation, +1-702-733-7195, ; or Yvonne L. Zappulla, Managing
Director of Wall Street Investor Relations Corp., +1-845-680-0300,
, for VendingData Corporation Web site: http://www.vendingdata.com/
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