Versatile Systems Inc. (TSX VENTURE:VV) announces its results for the second
quarter of the 2013 fiscal year.
Revenue for the three months ended December 31, 2012 was $9,550,579, generating
a gross profit of $1,842,628 or 19.3% of sales compared to $9,147,552,
generating a gross profit of $1,951,833 or 21.3% of sales for the same quarter
last year. The Net Loss for the quarter amounted to $494,389 ($0.00 per share)
compared to the Net Loss of $263,695 ($0.00 per share) for the same period last
year.
Highlights for the quarter included:
-- Revenue for the three months ended December 31, 2012 was $9,550,579
compared to $9,147,552 for the same quarter last year, an increase of
$403,027;
-- The gross profit for the three months ended December 31, 2012 was
$1,842,628 or 19.3% of sales compared to $1,951,833 or 21.3% of sales
for the same quarter last year;
-- The research and development expense for the quarter amounted to
$322,849 compared to $275,847 for the same quarter last year. The
Company incurred $105,277 for research and development activities
related to an iPad application for Mobiquity Route(TM) and $176,317
primarily related to Smart Sign TM; and
-- Deferred revenue at December 31, 2012 was $5,969,441 (of which
$4,924,276 is expected to be recognized in the next four quarters)
compared to $6,712,216 at June 30, 2012, a decrease of $742,775.
Revenue for the six months ended December 31, 2012 was $17,466,427 generating a
gross profit of $3,675,407 or 21.0% of sales compared to $18,186,764 generating
a gross profit of $3,742,211 or 20.6% of sales for the same period last year.
The Net Loss for the period amounted to $898,683 ($0.01 per share) compared to
$677,522 ($0.00 per share) for the same period last year.
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) 2013
Versatile Systems Inc. All rights reserved.
Versatile Systems Inc.
Condensed Consolidated Statements of Financial Position
(Unaudited - Prepared by Management)
Expressed in U.S. dollars December 31, 2012 June 30, 2012
------------------------------------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 70,780 $ 434,725
Accounts receivable 5,585,111 5,994,377
Prepaid expenses 4,443,223 4,152,994
Inventory 2,272,065 2,347,110
------------------------------------
12,371,179 12,929,206
Long-term accounts receivable 88,673 181,366
Long-term prepaid expenses 938,983 1,278,432
Investment in Equus 2,026,574 2,105,473
Capital Assets 200,905 251,591
Intangible assets 159,812 167,206
Deferred income tax assets 880,407 880,407
Goodwill 2,718,970 2,718,970
------------------------------------
$ 19,385,503 $ 20,512,651
------------------------------------
------------------------------------
LIABILITIES
Current Liabilities
Line of credit $ 2,967,124 $ 1,988,675
Accounts payable and accrued
liabilities 5,076,473 5,544,888
Current portion of deferred revenue 4,924,276 5,292,359
------------------------------------
12,967,873 12,825,922
Deferred Revenue 1,045,165 1,419,857
------------------------------------
14,013,038 14,245,779
------------------------------------
SHAREHOLDERS' EQUITY
Share Capital 54,433,709 54,433,709
Equity Reserve 4,633,592 4,629,219
Deficit (53,357,117) (52,458,434)
Accumulated other comprehensive loss (337,719) (337,622)
------------------------------------
5,372,465 6,266,872
------------------------------------
$ 19,385,503 $ 20,512,651
------------------------------------
------------------------------------
Versatile Systems Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited - Prepared by Management)
Expressed in U.S. Three months ended Six months ended
dollars December 31 December 31
2012 2011 2012 2011
----------------------------------------------------
(Restated) (Restated)
SALES $ 9,550,579 $ 9,147,552 $17,466,427 $18,186,764
COST OF SALES 7,707,951 7,195,719 13,791,020 14,444,553
----------------------------------------------------
1,842,628 1,951,833 3,675,407 3,742,211
----------------------------------------------------
EXPENSES
Selling and marketing 1,085,949 1,098,187 2,148,492 2,118,118
General and
administrative 845,714 827,851 1,654,730 1,788,978
Research and
development 322,849 275,847 559,095 519,957
Amortization of
capital assets 36,753 38,092 77,001 86,511
Share-based
compensation 2,187 4,279 4,373 8,749
Foreign exchange loss
(gain) (2,588) 21,287 9,546 22,111
----------------------------------------------------
2,290,864 2,265,543 4,453,237 4,544,424
----------------------------------------------------
LOSS FROM OPERATIONS (448,236) (313,710) (777,830) (802,213)
Interest expense (19,899) (7,594) (38,814) (12,817)
Equity loss from
Investment in Equus (25,259) (25,534) (78,899) (79,450)
Loss on sale of
capital assets and
investments - (1,534) - (1,534)
----------------------------------------------------
LOSS BEFORE INCOME TAXES (493,394) (348,372) (895,543) (896,014)
Current income tax
expense (995) (995) (3,140) (2,340)
Deferred income tax
recovery - 85,672 - 220,832
----------------------------------------------------
NET LOSS $ (494,389) $ (263,695) $ (898,683) $ (677,522)
----------------------------------------------------
----------------------------------------------------
Other comprehensive loss
Foreign exchange
translation (1,015) (6,670) (97) (6,670)
----------------------------------------------------
Total comprehensive loss $ (495,404) $ (270,365) $ (898,780) $ (684,192)
----------------------------------------------------
----------------------------------------------------
LOSS PER SHARE (basic
and diluted) ($0.00) ($0.00) ($0.01) ($0.00)
----------------------------------------------------
----------------------------------------------------
Versatile Systems Inc.
Condensed Consolidated Statements of Changes in Shareholders' Equity
(Unaudited - Prepared by Management)
Warrant Equity
Expressed in U.S. dollars Share Capital Reserve Reserve
---------------------------------------------------
Balance, June 30, 2011 $ 54,433,709 $ 42,000 $ 4,578,470
Net loss - - -
Foreign exchange on the
translation of VMS-UK - - -
Expiration of warrants - -
Share-based compensation
expense - - 8,749
---------------------------------------------------
Balance, December 31,
2011 54,433,709 42,000 4,587,219
---------------------------------------------------
---------------------------------------------------
Balance, June 30, 2012 54,433,709 - 4,629,219
Net loss - - -
Foreign exchange on the
translation of VMS-UK - - -
Share-based compensation
expense - - 4,373
---------------------------------------------------
Balance, December 31,
2012 $ 54,433,709 $ - $ 4,633,592
---------------------------------------------------
---------------------------------------------------
Accumulated
other
comprehensive
Expressed in U.S. dollars Deficit loss Total
---------------------------------------------------
(Restated) (Restated) (Restated)
Balance, June 30, 2011 $ (37,741,276) $ (326,261) $ 20,986,642
Net loss (677,522) - (677,522)
Foreign exchange on the
translation of VMS-UK - (6,670) (6,670)
Expiration of warrants - - -
Share-based compensation
expense - - 8,749
---------------------------------------------------
Balance, December 31,
2011 (38,418,798) (332,931) 20,311,199
---------------------------------------------------
---------------------------------------------------
Balance, June 30, 2012 (52,458,434) (337,622) 6,266,872
Net loss (898,683) - (898,683)
Foreign exchange on the
translation of VMS-UK - (97) (97)
Share-based compensation
expense - - 4,373
---------------------------------------------------
Balance, December 31,
2012 $ (53,357,117) $ (337,719) $ 5,372,465
---------------------------------------------------
---------------------------------------------------
Versatile Systems Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited - Prepared by Management)
Expressed in U.S. Three months ended Six months ended
dollars December 31 December 31
2012 2011 2012 2011
----------------------------------------------------
(Restated) (Restated)
OPERATING ACTIVITIES
Net loss $ (494,389) $ (263,695) $ (898,683) $ (677,522)
Items not involving
cash
Amortization of
capital assets 36,753 42,491 77,001 95,000
Share-based
compensation 2,187 4,279 4,373 8,749
Loss on sale of
capital assets and
investments - 1,534 - 1,534
Equity loss from
Investment in Equus 25,259 25,534 78,899 79,450
Unrealized foreign
exchange loss
(gain) 1,092 (16,712) 1,092 (16,712)
Deferred income
taxes - (85,672) - (220,832)
----------------------------------------------------
Cash flow used in
operations before other
items (429,098) (292,241) (737,318) (730,333)
Net change in non-
cash working
capital (462,265) (194,553) (584,966) 139,438
----------------------------------------------------
(891,363) (486,794) (1,322,284) (590,895)
INVESTING ACTIVITIES
Short term investments - (14,776) - (14,776)
Proceeds from
disposition of
capital assets - 19,089 - 20,430
Intangible assets -
contract cost
additions (59,574) (69,639) (137,979) (172,786)
Intangible assets -
contract cost
recognized 60,797 62,200 145,373 143,445
Purchase of capital
assets (7,938) (102,095) (27,504) (109,304)
----------------------------------------------------
(6,715) (105,221) (20,110) (132,991)
----------------------------------------------------
FINANCING ACTIVITIES
Proceeds from
(Repayment of) line
of credit 703,174 160,144 978,449 (122,642)
----------------------------------------------------
703,174 160,144 978,449 (122,642)
----------------------------------------------------
Decrease in cash and
cash equivalents (194,904) (431,871) (363,945) (846,528)
Cash and cash
equivalents, beginning
of period 265,684 563,999 434,725 978,656
----------------------------------------------------
Cash and cash
equivalents, end of
period $ 70,780 $ 132,128 $ 70,780 $ 132,128
----------------------------------------------------
----------------------------------------------------
FOR FURTHER INFORMATION PLEASE CONTACT:
Versatile Systems Inc.
John Hardy
CEO
1-800-262-1633
Versatile Systems Inc.
Fraser Atkinson
CFO
1-800-262-1633
Versatile Systems Inc.
International: 001-206-979-6760
www.versatile.com
