EXHIBIT 99.01
[VENDINGDATA CORPORATION LOGO]
Contact: John Spina or Yvonne L. Zappulla
Chief Financial Officer Managing Director
VendingData(TM) Corporation Wall Street Investor Relations Corp.
702-733-7195 845-680-0300
spina@vendingdata.com Yvonne@WallStreetIR.com
VENDINGDATA(TM) CORPORATION REPORTS
FULL YEAR AND FOURTH QUARTER 2003 FINANCIAL RESULTS
LAS VEGAS, NEVADA- (PRNews Wire)-March 25, 2003-VendingData(TM) Corporation (OTC
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 over 2002), 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.
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, 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 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 primarily due 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 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 book value increased to $0.85 per share at December 31,
2003 from $(1.32) per share at on 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 off 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 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 $500,000 per 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
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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 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, but are 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.
# # #
VENDINGDATA CORPORATION
STATEMENTS OF OPERATIONS
THREE MONTHS TWELVE MONTHS
ENDED ENDED
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DECEMBER 31,
------------------------------------------------
2003 2003 2002
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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
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389,912 6,710,919 3,480,299
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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
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Total operating expenses ......... 2,909,858 11,489,906 7,806,698
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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
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Loss on disposition of assets ........ 141,460 141,369 --
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Total interest expense, net .... 910,204 3,033,102 1,866,387
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Net loss ............................. $ (3,430,150) $ (7,812,089) $ (6,192,786)
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Basic loss per share ................. $ (0.36) $ (0.96) $ (0.81)
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Weighted average shares outstanding 9,547,291 8,134,173 7,625,814
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VENDINGDATA CORPORATION
BALANCE SHEET
DECEMBER 31, DECEMBER 31,
2003 2002
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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
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Total Current Assets 18,144,798 4,041,616
Equipment rented to customers, net of accumulated
deprediation 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
$288,203 and 191,520 1,282,088 352,603
Due from affiliate 118,800 118,800
Accounts receivable, trade, net of current portion,
less unamortized discount 1,140,984 --
Deferred expenses 250,697 100,000
Deposits 1,284,827 868,520
Other assets 265,478 638,029
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$ 24,160,178 $ 8,066,746
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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
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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
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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)
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Total stockholders' equity deficiency 14,245,225 (10,042,652)
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Total liabilities and stockholders' equity deficiency $ 24,160,178 $ 8,066,746
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