LEVIS, QUEBEC--(Marketwire - Oct. 20, 2011) - DEQ Systems Corp. (TSX VENTURE:DEQ) ("DEQ" or the "Company") announces the filing of its third quarter financial results for the period ended August 31, 2011. The Consolidated Financial Statements are available on SEDAR ([ www.sedar.com ]) and DEQ's website. A conference call will be held on Friday, October 21, 2011 at 11am EST to present and discuss these results. Those interested in participating in the call should dial toll free 1 (800) 736-4594 or (416) 981-9000. A presentation will be available on DEQ's website in the Invest/Financial Reports/PowerPoint section to support the call content.

2011 THIRD QUARTER RESULTS HIGHLIGHTS:

Financial Metrics

Revenue

164 new units installed during the Q3-2011 compared to 115 new installations in Q3-2010 for a net increase of 43% at an average annual lease of $3,900 per unit.
96% increase in new units installed for the nine-month period of 2011. 488 new units installed for the nine-month period in 2011, compared to 249 in 2010 for an increase of 96%.
104% increase in Q3-2011 direct leasing revenue to $708,000 in 2011 from $347,000 in 2010.
84% increase in direct leasing revenue for the nine-month period to $1,750,000 in 2011 from $952,000 in 2010.
The termination of Severn Agreement at the end of the first quarter of 2011 has reduced our third quarter royalties by $245,000 compared with the same period last year.

Operating Costs

Reduction in quarterly operating and R&D expenses of $143,000 in Q3 when compared to Q2-2011. This is explained by the results yielded from the cost reduction plan that was announced in March 2011.

EBITDA

Positive EBITDA of $102,000 in Q3-2011 compared to a loss of $(193,000) in Q2-2011. This is explained by the increase in the number of units installed during the quarter and the operating cost reduction program that was completed in Q2 2011.

Cash Flow

During the third quarter of 2011, the cash position decreased by $321,000. This is mostly explained by the change in non-cash working capital of $246,000 as well as the investment in leased equipment for new units installed during the quarter for an amount of $190,000. As of August 31, 2011, DEQ had a cash position of $2,045,000.

Operational Highlights

In the third quarter of 2011, DEQ directly installed 164 new units worldwide. (488 units for the nine-month period ended August 31, 2011)
DEQ has obtained more than 40 jurisdictional licenses worldwide in less than three years.
As of August 31, 2011, DEQ has directly installed 868 units in North America, 108 products installed in Asia for a grand total of 976 units in less than three years.
Distributors have installed 392 units; and
DEQ has a grand total of 1,368 units in operation worldwide.

"While the loss of the Severn contract earlier this year was a hard blow to our revenue base, cost structure and key financial metrics, the DEQ team has brilliantly reduced expenses while accelerating product placement," stated Earle G. Hall, President & CEO. "DEQ's products are internationally recognized and growing in placements, penetration and geographical presence and we are excited to the prospects of 2012 to further increase our revenue, units in the field and shareholder value."

Statement of Earnings
(unaudited)	Third Quarter				Nine-Month Period
	Aug. 31, 2010		Aug. 31, 2011		Aug. 31, 2010		Aug. 31, 2011
	(unaudited)		(unaudited)		(unaudited)		(unaudited)

Direct leasing	347,000		708,000		952,000		1,750,000
Royalties (excluding Severn)⁽¹⁾	298,000		376,000		1,137,000		1,017,000
Royalties (Severn Enterprises)⁽¹⁾	245,000		-		689,000		218,000
Total recurring revenue	890,000		1,084,000		2,778,000		2,985,000
Non recurring revenue	252,000		90,000		873,000		393,000
Total Revenue	1,142,000		1,174,000		3,651,000		3,378,000

Gross Profit	1,048,000		1,041,000		3,177,000		2,764,000
% Gross margin	92	%	89	%	87	%	82	%

Operating Costs	964,000		939,000		2,884,000		3,165,000

EBITDA ⁽²⁾	84,000		102,000		293,000		(401,000	)

Stock based compensation	54,000		26,000		197,000		319,000
Amortization expenses	585,000		629,000		1,724,000		1,844,000
Interest expenses	23,000		1,000		63,000		13,000
Foreign exchange (gain) loss	(29,000	)	(30,000	)	(62,000	)	57,000
Future income taxes	(69,000	)	(21,000	)	(207,000	)	(65,000	)
Other items	(210,000	)	-		(210,000	)	(170,000	)
Net Income (Loss)	(270,000	)	(503,000	)	(1,212,000	)	(2,399,000	)
Net Income (Loss) per share	$(0.004	)	$(0.007	)	$(0.017	)	$(0.035	)

Note 1: On March 3, 2011, the Company entered into a settlement agreement with DEK International on the Severn Project and the royalty from Severn Enterprises was terminated as of February 28, 2011.

Note 2: We use EBITDA (Earnings before Stock option based compensation, Interest, Taxes, Depreciation, Amortization and Foreign exchange) as performance measurements in our financial disclosure. This measure is not recognized under generally accepted accounting principles. The reconciliations above demonstrate how we calculate such measurements from our financial statements.

Balance Sheet
	August 31, 2010	Nov. 30, 2010	August 31, 2011
	(unaudited)	(audited)	(unaudited)

Cash and cash equivalents	4,080,000	3,933,000	2,046,000
Current assets (other than cash)	2,145,000	2,001,000	1,991,000
Long-term assets	13,618,000	12,700,000	11,786,000
Total Assets	$19,843,000	$18,634,000	$15,823,000

Current liabilities	1,885,000	1,852,000	1,121,000
Long-term liabilities	254,000	-	-
Shareholders' equity	17,704,000	16,782,000	14,702,000
Total Liabilities and Equity	$19,843,000	$18,634,000	$15,823,000

Number of shares outstanding	69,302,000	69,182,000	69,182,000

ABOUT DEQ

DEQ Systems Corp. (TSX VENTURE:DEQ) is a customer centric company that delivers best of breed table game technology related products to the global gaming industry that add value and increase 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.

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.

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

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DEQ Reports Q3 2011 Financial Results

DEQ Reports Q3 2011 Financial Results