Versatile Systems Inc.
TSX VENTURE : VV

Versatile Systems Inc.

November 13, 2013 19:11 ET

Versatile Reports First Quarter Results

VANCOUVER, CANADA--(Marketwired - Nov. 13, 2013) - Versatile Systems Inc. (TSX VENTURE:VV) announces its results for the first quarter of the 2014 fiscal year.

Revenue for the three months ended September 30, 2013 was $6,639,475, generating a gross profit of $1,280,857 or 19.3% of sales compared to $7,915,848, generating a gross profit of $1,832,779 or 22.3% of sales for the same quarter last year. The Net Loss for the quarter amounted to $1,249,421 ($0.01 per share) compared to Net Loss of $404,294 ($0.00 per share) for the same quarter last year.

Highlights for the quarter included:

  • Revenue for the three months ended September 30, 2013 was $6,639,475 compared to $7,915,848 for the same quarter last year;

  • The gross profit for the three months ended September 30, 2013 was $1,280,857 or 19.3% of sales compared to $1,832,779 or 23.2% of sales for the same quarter last year;

  • The research and development expense for the quarter amounted to $384,775 compared to $236,246 for the same quarter last year; and

  • Deferred revenue at September 30, 2013 was $6,277,307 (of which $5,298,503 is expected to be recognized in the next four quarters) compared to $6,835,938 at June 30, 2013.

During the first quarter the Company made a number of changes in senior management and has undertaken a restructuring of the U.S. Eastern operations with the objective of returning to profitability.

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 go to 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.

Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. All amounts are expressed in U.S. dollars unless otherwise stated. © 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 September 30, 2013 June 30, 2013
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 156,283 $ 83,724
Investment in Equus 1,798,203 $ 1,798,203
Accounts receivable 3,017,827 6,379,629
Prepaid expenses 4,573,425 4,588,012
Inventory 2,271,741 2,406,355
11,817,479 15,255,923
Long-term accounts receivable 3,255 14,368
Long-term prepaid expenses 894,865 1,140,311
Capital Assets 174,458 189,274
Intangible assets 160,954 169,959
Deferred income tax assets 336,275 336,275
Goodwill 2,718,970 2,718,970
$ 16,106,256 $ 19,825,080
LIABILITIES
Current Liabilities
Line of credit and bank overdraft $ 3,966,792 $ 3,602,269
Accounts payable and accrued liabilities 4,678,337 6,963,126
Current portion of deferred revenue 5,298,503 5,586,738
13,943,632 16,152,133
Deferred Revenue 978,804 1,249,200
14,922,436 17,401,333
SHAREHOLDERS' EQUITY
Share Capital 54,433,709 54,433,709
Equity Reserve 4,637,968 4,637,968
Deficit (57,562,457 ) (56,313,036 )
Accumulated other comprehensive loss (325,400 ) (334,894 )
1,183,820 2,423,747
$ 16,106,256 $ 19,825,080
Versatile Systems Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited - Prepared by Management)
Expressed in U.S. dollars Three months ended September 30
2013 2012
SALES $ 6,639,475 $ 7,915,848
COST OF SALES 5,358,618 6,083,069
1,280,857 1,832,779
EXPENSES
Selling and marketing 870,789 1,062,543
General and administrative 1,216,388 809,016
Research and development 384,775 236,246
Amortization of capital assets 21,002 40,248
Share-based compensation - 2,186
Foreign exchange loss 2,624 12,134
2,495,578 2,162,373
LOSS FROM OPERATIONS (1,214,721 ) (329,594 )
Interest expense (33,244 ) (18,915 )
Equity loss from Investment in Equus - (53,640 )
Loss on sale of capital assets (461 ) -
LOSS BEFORE INCOME TAXES (1,248,426 ) (402,149 )
Current income tax expense (995 ) (2,145 )
NET LOSS $ (1,249,421 ) $ (404,294 )
Other comprehensive income (loss)
Foreign exchange translation 9,494 (918 )
Total comprehensive loss $ (1,239,927 ) $ (405,212 )
LOSS PER SHARE (basic and diluted) ($0.01 ) $0.00
Weighted average number of common shares oustanding,
basic and diluted 157,285,643 157,285,643
Versatile Systems Inc.
Condensed Consolidated Statements of Changes in Shareholders' Equity
(Unaudited - Prepared by Management)
Expressed in U.S. dollars
Accumulated
other
Share Equity comprehensive
Capital Reserve Deficit loss Total
Balance, June 30, 2012 $ 54,433,709 $ 4,629,219 $ (52,458,434 ) $ (337,622 ) $ 6,266,872
Net loss - - (404,294 ) - (404,294 )
Foreign exchange on the translation of VMS- - - - (918 ) (918 )
Share-based compensation expense - 2,186 - - 2,186
Balance, September 30, 2012 54,433,709 4,631,405 (52,862,728 ) (338,540 ) 5,863,846
Balance, June 30, 2013 54,433,709 4,637,968 (56,313,036 ) (334,894 ) 2,423,747
Net loss - - (1,249,421 ) - (1,249,421 )
Foreign exchange on the translation of VMS- - - - 9,494 9,494
Balance, September 30, 2013 $ 54,433,709 $ 4,637,968 $ (57,562,457 ) $ (325,400 ) $ 1,183,820
Versatile Systems Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited - Prepared by Management)
Expressed in U.S. dollars Three months ended September 30
2013 2012
OPERATING ACTIVITIES
Net loss $ (1,249,421 ) $ (404,294 )
Items not involving cash
Amortization of capital assets 21,002 40,248
Share-based compensation - 2,186
Loss on sale of capital assets 461 -
Equity loss from Investment in Equus - 53,640
Cash flow used in operations before other items (1,227,958 ) (308,220 )
Net change in non-cash working capital 924,030 (122,701 )
(303,928 ) (430,921 )
INVESTING ACTIVITIES
Proceeds from disposition of capital assets 1,418 -
Intangible assets - contract cost additions (42,862 ) (78,405 )
Intangible assets - contract cost recognized 57,712 84,576
Purchase of capital assets (4,304 ) (19,566 )
11,964 (13,395 )
FINANCING ACTIVITIES
Proceeds from line of credit and bank overdraft 364,523 275,275
364,523 275,275
Increase (Decrease) in cash and cash equivalents 72,559 (169,041 )
Cash and cash equivalents, beginning of period 83,724 434,725
Cash and cash equivalents, end of period $ 156,283 $ 265,684

Contact Information

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

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