Versatile Systems Inc.
LSE : VVS

Versatile Systems Inc.

October 26, 2009 03:00 ET

Versatile Reports First Quarter Results

FOR:  VERSATILE SYSTEMS INC.

TSX VENTURE SYMBOL:  VV
AIM SYMBOL:  VVS

October 26, 2009

Versatile Reports First Quarter Results

Cash flow from operations of $149,408 for the quarter

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 26, 2009) - Versatile Systems Inc. (TSX
VENTURE:VV)(AIM:VVS) announces its results for the first quarter of the 2010 fiscal year.

Revenue for the three months ended September 30, 2009 was $11,616,225 generating a gross profit of
$2,655,304 or 22.9% of sales compared to $14,303,851 generating a gross profit of $3,753,100 or 26.2%
of sales for the same quarter last year. The Net Loss for the quarter amounted to $46,775 ($0.00 per
share) compared to a Net Earnings of $56,615 ($0.00 per share) for the same period last year.

"Economic conditions remained challenging throughout the first quarter," said John Hardy, Chairman and
CEO of Versatile. "Nevertheless, we made enhancements to our product set, spending $246,670 on
research and development which will help drive future growth. In addition, we secured major orders
from customers in the telecommunications, cable, manufacturing and education verticals, which enabled
the Company to generate positive cash flow from operations."

Highlights for the quarter included:

- Cash and cash equivalents and short term investments at September 30, 2009 was $2,999,104 compared
to $2,002,530 at June 30, 2009, an increase of $996,574;

- Revenue for the three months ended September 30, 2009 was $11,616,225 compared to $10,877,354 for
the last quarter, an increase of $738,871;

- Earnings before interest, taxes and amortization (EBITDA) of $115,795 for the three months ended
September 30, 2009 compared to $252,572 for the same period last year;

- The Net Loss for the quarter amounted to $46,775 ($0.00 per share) compared to Net Earnings of
$56,615 ($0.00 per share) for the same period last year, a decrease of $103,390;

- The cash flow generated from operations, before non-cash working capital items amounted to $149,408
for the three months ended September 30, 2009 compared to cash flow generated from operations of
$236,674 for the same period last year;

- The research and development expense for the quarter amounted to $246,670 compared to $424,752 for
the same quarter last year;

- Deferred revenue at September 30, 2009 was $8,260,060 (of which $7,375,423 is expected to be
recognized in the next four quarters) compared to $7,773,787 at September 30, 2008, an increase of
$486,273;

- The Company acquired 531,680 shares of Equus Total Return, Inc., which is a public company trading
on the NYSE under the symbol EQS;

- Completing development and certification of an Electronic Credit Application of Mobiquity Kiosk(TM)
for a major Canadian bank to be deployed in a leading Canadian retailer and Canadian sports arena; and

- Completing development and certification testing for a new Electronic Credit Application of
Mobiquity Kiosk(TM) for a major United States healthcare financing lender.

The working capital as of September 30, 2009 was $2,593,260, an increase of $22,839 compared to the
working capital of $2,570,421 at June 30, 2009. The cash flow generated from operations, before non-
cash working capital items amounted to $149,408 for the three months ended September 30, 2009 compared
to cash flow generated from operations of $236,674 for the same period last year.

During the current quarter, the Company incurred $134,655 for research and development activities
related to Mobiquity Route(TM), DEX and related mobile software products and $106,139 related to
Mobiquity Transaction Engine 3.0(TM), Mobiquity Kiosk(TM) and research on Virtualization.

"The Company's cost structure in the current quarter is at its lowest level in four years," said
Fraser Atkinson, CFO of Versatile. "Consequently, the Company was able to generate positive EBITDA and
cash flow from operations."

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) 2009 Versatile Systems Inc. All rights reserved.


-30-

FOR FURTHER INFORMATION PLEASE CONTACT:

Versatile Systems Inc.
John Hardy
Chairman and CEO
1-800-262-1633 or International: 001-206-979-6760

OR

Versatile Systems Inc.
Fraser Atkinson
CFO
1-800-262-1633
www.versatile.com

OR

NCB Stockbrokers Limited (Nominated Adviser)
Christopher Caldwell or Barclay Clibborn
+44 (0) 20 7071 5200

The TSX Venture Exchange and the AIM market of the London Stock Exchange have not reviewed and do not
accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Versatile Systems Inc.