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. (C) 2013 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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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
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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
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$ 16,106,256 $ 19,825,080
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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
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13,943,632 16,152,133
Deferred Revenue 978,804 1,249,200
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14,922,436 17,401,333
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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)
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1,183,820 2,423,747
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$ 16,106,256 $ 19,825,080
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Versatile Systems Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Loss)
(Unaudited - Prepared by Management)
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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
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1,280,857 1,832,779
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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
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2,495,578 2,162,373
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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) -
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LOSS BEFORE INCOME TAXES (1,248,426) (402,149)
Current income tax expense (995) (2,145)
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NET LOSS $ (1,249,421) $ (404,294)
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----------------------------------
Other comprehensive income (loss)
Foreign exchange translation 9,494 (918)
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Total comprehensive loss $ (1,239,927) $ (405,212)
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LOSS PER SHARE (basic and diluted) ($0.01) $0.00
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----------------------------------
Weighted average number of common shares
oustanding,
basic and diluted 157,285,643 157,285,643
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Versatile Systems Inc.
Condensed Consolidated Statements of Changes in Shareholders' Equity
(Unaudited - Prepared by Management)
----------------------------------------------------------------------------
Expressed in U.S. dollars
Accumulated
other
comprehen-
Share Equity sive
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
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Balance,
September 30,
2012 54,433,709 4,631,405 (52,862,728) (338,540) 5,863,846
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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
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Balance,
September 30,
2013 $54,433,709 $4,637,968 $(57,562,457) $(325,400) $ 1,183,820
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Versatile Systems Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited - Prepared by Management)
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Expressed in U.S. dollars Three months ended September 30
2013 2012
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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
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Cash flow used in operations before other
items (1,227,958) (308,220)
Net change in non-cash working capital 924,030 (122,701)
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(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)
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11,964 (13,395)
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FINANCING ACTIVITIES
Proceeds from line of credit and bank
overdraft 364,523 275,275
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364,523 275,275
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Increase (Decrease) in cash and cash
equivalents 72,559 (169,041)
Cash and cash equivalents, beginning of
period 83,724 434,725
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Cash and cash equivalents, end of period $ 156,283 $ 265,684
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FOR FURTHER INFORMATION PLEASE CONTACT:
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
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