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D-Box's Q1 sales jump 90%, losses widen as it expands commercial theatre unit

Published: 18:12 24 Aug 2011 BST

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D-Box Technologies (TSE:DBO) announced Wednesday it nearly doubled its first quarter sales as it expands into the commercial theatre industry, despite widening its losses on higher marketing costs.

For the three months ending June 30, the technology motion systems manufacturer posted a net loss of $1.79 million, or $0.011 loss per share, compared to a $1.44 million loss, or $0.0116 loss per share a year ago.

D-Box, which focuses on the entertainment and simulation industries, said the larger loss is from higher marketing and sales expenses stemming from the development of its commercial theatre segment.

Revenues, however, which include the sale of motion generation systems to original equipment manufacturers (OEM), movie theatre system sales and revenues in regards to admission tickets sold in commercial theatres, rose to $2.41 million, up 90% from a year earlier.

The company said the growth was due to recurring revenues from utilization rights, and rentals and maintenance fees based on the use of its MFX, or commercial theatre motion seat, systems.

"We are currently experiencing a strong progression of our revenues including an accelerated growth of recurring revenues from the commercial theatre segment," said president and CEO, Claude McMaster.

"In parallel, the OEM [original equipment manufacturers] segment continues to progress thus offering D-BOX two complementary ways to grow."

Indeed, the Longueil, Quebec-based company made $1.57 million from the sale of its motion generation systems to OEMs, up 43% from the year-ago period.

D-Box's MFX systems generated $844,000 in revenue during the quarter, nearly a five-fold increase compared to the $171,000 a year ago.

The company installed or backlogged 2,480 MFX systems during the quarter in 99 auditoriums across the globe. In the previous quarter, it had either installed or backlogged 1,901 motion seats in 78 auditoriums.

D-Box said it now expects to continue to focus on the development of its commercial theatre business, mainly by expanding to larger national chains in urban centers. It anticipates closing several deals with major North American commercial theatre chains within the next few months.

The company's stock on the Toronto Stock Exchange rose 6.12% as of 11:19 am EDT, to trade at $0.52 per share.

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