Versatile Systems Inc. (TSX VENTURE:VV) announces its results for the first
quarter of the 2013 fiscal year.
Revenue for the three months ended September 30, 2012 was $7,915,848, generating
a gross profit of $1,832,779 or 23.2% of sales compared to $9,039,212,
generating a gross profit of $1,790,378 or 19.8% of sales for the same quarter
last year. The Loss from Operations for the quarter amounted to $329,594
compared to $488,503 for the same quarter last year, an improvement of $158,909.
The Net Loss for the quarter amounted to $404,094 ($0.00 per share) compared to
the Net Loss of $413,827 ($0.00 per share) for the same period last year.
Highlights for the quarter included:
-- Revenue for the three months ended September 30, 2012 was $7,915,848
compared to $9,039,212 for the same quarter last year, a decrease of
$1,123,364;
-- The gross profit for the three months ended September 30, 2012 was
$1,832,779 or 23.2% of sales compared to $1,790,378 or 19.8% of sales
for the same quarter last year;
-- The Earnings before interest, taxes, depreciation and amortization
("EBITDA") loss for the three months ended September 30, 2012 was
$289,346 compared to an EBITDA loss of $440,084 for the same quarter
last year, an improvement of $150,738;
-- The research and development expense for the quarter amounted to
$236,246 compared to $244,110 for the same quarter last year;
-- Deferred revenue at September 30, 2012 was $6,453,971 (of which
$5,269,399 is expected to be recognized in the next four quarters)
compared to $6,047,097 at September 30, 2011, an increase of $406,874;
and
-- The expenses for the quarter were lower than any previous quarter in the
last two years.
The research and development expense for the quarter amounted to $236,246
compared to $244,110 for the same quarter last year. During the current quarter,
the Company incurred $87,728 for research and development activities related to
an iPad application for Mobiquity Sell, Mobiquity Route(TM) and $106,956
primarily related to Smart Sign(TM).
About Versatile
Versatile provides business solutions that enable companies to improve sales,
marketing and distribution of their products. Versatile also provides
information technology services for the implementation, maintenance and security
of mission-critical computer environments. Versatile has the ability to
architect solutions involving both proprietary and third party components. For
more information: www.versatile.com.
Forward-Looking Statements
This document may contain forward-looking statements relating to Versatile's
operations or to the environment in which it operates, which are based on
Versatile's operations, estimates, forecasts and projections. These statements
are not guarantees of future performance and involve risks and uncertainties
that are difficult to predict or are beyond Versatile's control. A number of
important factors including those set forth in other public filings could cause
actual outcomes and results to differ materially from those expressed in these
forward-looking statements. Consequently, readers should not place any undue
reliance on such forward-looking statements. In addition, these forward-looking
statements relate to the date on which they are made. Versatile disclaims any
intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
All amounts are expressed in U.S. dollars unless otherwise stated. (C) 2012
Versatile Systems Inc. All rights reserved.
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Versatile Systems Inc.
Condensed Consolidated Statements of Financial Position
(Unaudited - Prepared by Management)
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September 30, June 30,
Expressed in U.S. dollars 2012 2012
----------------------------------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 265,684 $ 434,725
Accounts receivable 5,523,198 5,994,377
Prepaid expenses 4,472,890 4,152,994
Inventory 2,395,005 2,347,110
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12,656,777 12,929,206
Long-term accounts receivable 135,489 181,366
Long-term prepaid expenses 1,068,012 1,278,432
Investment in Equus 2,051,833 2,105,473
Capital Assets 229,989 251,591
Intangible assets 161,035 167,206
Deferred income tax assets 880,407 880,407
Goodwill 2,718,970 2,718,970
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$ 19,902,512 $ 20,512,651
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LIABILITIES
Current Liabilities
Line of credit $ 2,263,950 $ 1,988,675
Accounts payable and accrued liabilities 5,320,745 5,544,888
Current portion of deferred revenue 5,269,399 5,292,359
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12,854,094 12,825,922
Deferred Revenue 1,184,572 1,419,857
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14,038,666 14,245,779
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SHAREHOLDERS' EQUITY
Share Capital 54,433,709 54,433,709
Equity Reserve 4,631,405 4,629,219
Deficit (52,862,728) (52,458,434)
Accumulated other comprehensive loss (338,540) (337,622)
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5,863,846 6,266,872
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$ 19,902,512 $ 20,512,651
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Versatile Systems Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited - Prepared by Management)
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Three months ended
Expressed in U.S. dollars September 30
2012 2011
------------------------
(Restated)
SALES $7,915,848 $9,039,212
COST OF SALES 6,083,069 7,248,834
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1,832,779 1,790,378
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EXPENSES
Selling and marketing 1,062,543 1,019,931
General and administrative 809,016 961,127
Research and development 236,246 244,110
Amortization of capital assets 40,248 48,419
Share-based compensation 2,186 4,470
Foreign exchange loss 12,134 824
------------------------
2,162,373 2,278,881
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LOSS FROM OPERATIONS (329,594) (488,503)
Interest expense (18,915) (5,223)
Equity loss from Investment in Equus (53,640) (53,916)
------------------------
LOSS BEFORE INCOME TAXES (402,149) (547,642)
Current income tax expense (2,145) (1,345)
Deferred income tax recovery - 135,160
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NET LOSS $ (404,294) $ (413,827)
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Other comprehensive loss
Foreign exchange translation (918) -
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Total comprehensive loss $ (405,212) $ (413,827)
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LOSS PER SHARE (basic and diluted) ($0.00) ($0.00)
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Versatile Systems Inc.
Condensed Consolidated Statements of Changes in Shareholders' Equity
(Unaudited - Prepared by Management)
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Expressed in U.S. dollars
Share Warrant Equity
Capital Reserve Reserve
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Balance, June 30, 2011 $ 54,433,709 $ 42,000 $ 4,578,470
Net loss - - -
Expiration of warrants - (42,000) 42,000
Share-based compensation expense - - 4,470
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Balance, September 30, 2011 54,433,709 - 4,624,940
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Balance, June 30, 2012 54,433,709 - 4,629,219
Net loss - - -
Foreign exchange on the
translation of VMS-UK - - -
Share-based compensation expense - - 2,186
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Balance, September 30, 2012 $ 54,433,709 $ - $ 4,631,405
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Versatile Systems Inc.
Condensed Consolidated Statements of Changes in Shareholders' Equity
(Unaudited - Prepared by Management)
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Expressed in U.S. dollars
Accumulated
other
comprehensive
Deficit loss Total
-------------------------------------------
(Restated) (Restated)
Balance, June 30, 2011 $(37,741,276) $ (326,261) $20,986,642
Net loss (413,827) - (413,827)
Expiration of warrants - - -
Share-based compensation expense - - 4,470
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Balance, September 30, 2011 (38,155,103) (326,261) 20,577,285
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Balance, June 30, 2012 (52,458,434) (337,622) 6,266,872
Net loss (404,294) - (404,294)
Foreign exchange on the
translation of VMS-UK - (918) (918)
Share-based compensation expense - - 2,186
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Balance, September 30, 2012 $(52,862,728) $ (338,540) $ 5,863,846
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Versatile Systems Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited - Prepared by Management)
Three months ended
Expressed in U.S. dollars September 30
2012 2011
--------------------------
(Restated)
OPERATING ACTIVITIES
Net loss $ (404,294) $ (413,827)
Items not involving cash
Amortization of capital assets 40,248 52,509
Share-based compensation 2,186 4,470
Equity loss from Investment in Equus 53,640 53,916
Deferred income taxes - (135,160)
--------------------------
Cash flow used in operations before other items (308,220) (438,092)
Net change in non-cash working capital (122,701) 333,991
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(430,921) ( 104,101)
INVESTING ACTIVITIES
Proceeds from disposition of capital assets - 1,341
Intangible assets - contract cost additions (78,405) (103,147)
Intangible assets - contract cost recognized 84,576 81,245
Purchase of capital assets (19,566) ( 7,209)
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(13,395) ( 27,770)
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FINANCING ACTIVITIES
Proceeds from (Repayment of) line of credit 275,275 (282,786)
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275,275 (282,786)
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Decrease in cash and cash equivalents (169,041) (414,657)
Cash and cash equivalents, beginning of period 434,725 978,656
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Cash and cash equivalents, end of period $ 265,684 $ 563,999
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FOR FURTHER INFORMATION PLEASE CONTACT:
Versatile Systems Inc.
John Hardy
Chairman and CEO
1-800-262-1633 or International: 001-206-979-6760
Versatile Systems Inc.
Fraser Atkinson
CFO
1-800-262-1633
www.versatile.com
