Versatile Systems Inc.

TSX VENTURE : VV


Versatile Systems Inc.

February 05, 2013 21:12 ET

Versatile Reports Second Quarter Results

VANCOUVER, CANADA--(Marketwire - Feb. 5, 2013) - 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™ 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. © 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. dollars Three months ended December 31 Six months ended 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)
Expressed in U.S. dollars Share Capital Warrant Reserve Equity Reserve Deficit Accumulated other comprehensive loss Total
(Restated) (Restated) (Restated)
Balance, June 30, 2011 $ 54,433,709 $ 42,000 $ 4,578,470 $ (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 - - 8,749
Balance, December 31, 2011 54,433,709 42,000 4,587,219 (38,418,798 ) (332,931 ) 20,311,199
Balance, June 30, 2012 54,433,709 - 4,629,219 (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 - - 4,373
Balance, December 31, 2012 $ 54,433,709 $ - $ 4,633,592 $ (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. dollars Three months ended December 31 Six months ended 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

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.

Contact Information

  • 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