Versatile Systems Inc. (TSX VENTURE: VV)(AIM: VVS), announces its
results for the fourth quarter and the 2011 fiscal year.
Revenue for the year ended June 30, 2011 was $45,903,472
generating a gross profit of $10,129,378 or 22.1% of sales compared
to $44,188,021 generating a gross profit of $10,036,501 or 22.7% of
sales for the previous fiscal year. The Net Loss for the period
amounted to $98,762 ($0.00 per share) compared to a Net Loss of
$1,236,621 ($0.01 per share) for the previous fiscal year, an
improvement of $1,137,859.
The Earnings before Interest, Taxes, Depreciation and
Amortization (EBITDA) for the year ended June 30, 2011 was $112,195
compared to an EBITDA loss of $1,291,424 for the previous fiscal
year, an improvement of $1,403,619.
"While economic conditions continue to be challenging, we are
pleased with the significant turnaround from the previous fiscal
year," said John Hardy, Chairman and CEO of Versatile. "Heading
into fiscal 2012 we remain committed to improving profitability,
while carefully managing our expenses."
Revenue for the three months ended June 30, 2011 was $10,180,289
generating a gross profit of $2,381,728 or 23.4% of sales compared
to $11,517,023 generating a gross profit of $2,419,338 or 21.0% of
sales for the same quarter last year. The Net Loss for the quarter
amounted to $221,251 ($0.00 per share) compared to a Net Loss of
$292,335 ($0.01 per share) for the same period last year.
Highlights for the quarter included:
-- Revenue for the three months ended June 30, 2011 was $10,180,289
compared to $11,517,023 for the same quarter last year;
-- The normalized EBITDA for the quarter was $45,167, compared to a
normalized EBITDA loss of $398,232 for the same quarter last year.
Normalized EBITDA excludes the non- recurring expenses and the non-cash
stock based compensation charge;
-- The research and development expense for the quarter amounted to
$210,996 compared to $177,744 for the same quarter last year;
-- Deferred revenue at June 30, 2011 was $6,320,199 (of which $5,670,932 is
expected to be recognized in the next four quarters) compared to
$8,142,479 at June 30, 2010; and
-- The Investment in Equus consists of 962,962 shares of Equus Total
Return, Inc. which is a public company trading on the NYSE under the
symbol EQS. The net asset value of Equus at June 30, 2011 was $3.92 per
share.
During the current quarter, the Company incurred $116,328 for
research and development activities related to Mobiquity Route™,
DEX and related mobile software products and $53,181 related
toMobiquity Transaction Engine 3.0™ and Mobiquity Kiosk™.
Subsequent to the year-end the Company changed its banking
facilities for its U.S. based operations to a new financial
institution, which is providing a credit facility for up to
$4,500,000 on more favorable terms than the former bank.
"Versatile generated cash flow from operations before non-cash
operating balance sheet items of $319,649 for the current fiscal
year compared to cash flow used in operations before non-cash
operating balance sheet items of $1,164,160 for last year," said
Fraser Atkinson, CFO of Versatile. "This is an improvement of
$1,483,809 and has helped to strengthen the Company's financial
position."
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. © 2011 Versatile Systems Inc. All rights reserved.
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Versatile Systems Inc.
Consolidated Balance Sheets
----------------------------------------------------------------------------
June 30, June 30,
Expressed in U.S. dollars 2011 2010
------------------------------
ASSETS
Current Assets
Cash and cash equivalents $ 978,656 $ 1,738,036
Investment in Equus 2,311,109 2,203,043
Accounts receivable 7,134,328 10,580,706
Current portion of deferred contract costs 4,469,066 5,793,180
Prepaid expenses 228,062 236,993
Inventory 1,849,635 1,719,477
Future income tax benefits 546,252 721,975
------------------------------
17,517,108 22,993,410
Long-term accounts receivable 401,742 265,612
Deferred contract costs 579,710 598,366
Capital Assets 270,437 519,391
Intangible assets - 459
Future income tax benefits 6,454,904 6,243,875
Goodwill 9,914,350 9,914,350
------------------------------
$ 35,138,251 $ 40,535,463
------------------------------
------------------------------
LIABILITIES
Current Liabilities
Line of credit and bank overdraft $ 1,007,767 $ 1,353,312
Accounts payable and accrued liabilities 6,823,643 9,955,342
Current portion of deferred revenue 5,670,932 7,432,210
------------------------------
13,502,342 18,740,864
Deferred Revenue 649,267 710,269
------------------------------
14,151,609 19,451,133
------------------------------
SHAREHOLDERS' EQUITY
Share Capital 54,433,709 54,433,709
Warrants 42,000 186,367
Contributed surplus 4,578,470 4,231,539
Deficit (37,064,598) (36,965,836)
Accumulated other comprehensive loss (1,002,939) (801,449)
------------------------------
20,986,642 21,084,330
------------------------------
$ 35,138,251 $ 40,535,463
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Versatile Systems Inc.
Consolidated Statements of Operations and Deficit
(Unaudited - Prepared by Management)
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Expressed in U.S. dollars Three months ended June 30
2011 2010
----------------------------------------
----------------------------------------
(unaudited) (unaudited)
SALES $ 10,180,289 $ 11,517,023
COST OF SALES 7,798,561 9,097,685
----------------------------------------
2,381,728 2,419,338
----------------------------------------
EXPENSES
Selling and marketing 1,186,724 1,497,988
General and administrative 929,913 1,140,105
Research and development 210,996 177,744
Non recurrring expenses 199,293 (214,924)
Stock-based compensation 141,658 23,887
Foreign exchange loss (gain) 8,928 1,733
----------------------------------------
2,677,512 2,626,533
----------------------------------------
----------------------------------------
Earnings (loss) before interest,
taxes and amortization (295,784) (207,195)
Amortization of capital assets 51,473 67,874
Amortization of intangible
assets - 60,191
Interest expense 2,616 10,248
Goodwill Impairment - 63,309
Loss (Gain) on sale of capital
assets and investments 1,410 -
----------------------------------------
LOSS BEFORE INCOME TAXES (351,283) (408,817)
Current income tax recovery
(expense) (995) 2,985
Future income tax benefit 131,027 113,497
----------------------------------------
NET LOSS (221,251) (292,335)
----------------------------------------
DEFICIT, BEGINNING OF PERIOD (36,843,347) (36,673,501)
----------------------------------------
DEFICIT, END OF PERIOD (37,064,598) (36,965,836)
----------------------------------------
----------------------------------------
EARNINGS (LOSS) PER SHARE (basic
and diluted) $ (0.00) $ (0.00)
----------------------------------------
----------------------------------------
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Versatile Systems Inc.
Consolidated Statements of Operations and Deficit
(Unaudited - Prepared by Management)
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Expressed in U.S. dollars Year ended June 30
2011 2010
-----------------------------------------
-----------------------------------------
SALES $ 45,903,472 $ 44,188,021
COST OF SALES 35,774,094 34,151,520
-----------------------------------------
10,129,378 10,036,501
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EXPENSES
Selling and marketing 4,659,897 5,969,542
General and administrative 3,702,160 4,058,864
Research and development 960,399 856,787
Non recurrring expenses 492,950 358,811
Stock-based compensation 202,564 93,102
Foreign exchange loss (gain) (787) (9,181)
-----------------------------------------
10,017,183 11,327,925
-----------------------------------------
-----------------------------------------
Earnings (loss) before interest,
taxes and amortization 112,195 (1,291,424)
Amortization of capital assets 225,227 258,742
Amortization of intangible
assets - 332,214
Interest expense 16,426 32,239
Goodwill Impairment - 63,309
Loss (Gain) on sale of capital
assets and investments 4,610 (4,952)
-----------------------------------------
LOSS BEFORE INCOME TAXES (134,068) (1,972,976)
Current income tax recovery
(expense) - (756)
Future income tax benefit 35,306 737,111
-----------------------------------------
NET LOSS (98,762) (1,236,621)
-----------------------------------------
DEFICIT, BEGINNING OF PERIOD (36,965,836) (35,729,215)
-----------------------------------------
DEFICIT, END OF PERIOD (37,064,598) (36,965,836)
-----------------------------------------
-----------------------------------------
EARNINGS (LOSS) PER SHARE (basic
and diluted) $ (0.00) $ (0.01)
-----------------------------------------
-----------------------------------------
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Versatile Systems Inc.
Consolidated Statements of Comprehensive Loss
(Unaudited - Prepared by Management)
----------------------------------------------------------------------------
Expressed in U.S.
dollars Three months ended June 30 Year ended June 30
2011 2010 2011 2010
-------------------------------------------------------
(unaudited) (unaudited)
Net earnings (loss) (221,251) (292,335) (98,762) (1,236,621)
Other comprehensive
(loss) income
Net change in fair
value of
available-for-sale
investments (192,592) (519,670) (201,490) (519,670)
-------------------------------------------------------
Comprehensive (loss)
income (413,843) (812,005) (300,252) (1,756,291)
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Versatile Systems Inc.
Consolidated Statements of Cash Flows
(Unaudited - Prepared by Management)
---------------------------------------------------------------------------
Expressed in U.S.
dollars Three months ended June 30 Year ended June 30
2011 2010 2011 2010
-------------------------------------------------------
-------------------------------------------------------
(unaudited) (unaudited)
OPERATING ACTIVITIES
Net loss $ (221,251) $ (292,335) $ (98,762) $ (1,236,621)
Items not affecting
cash
Amortization of
capital and
intangible assets 56,998 144,719 256,075 665,091
Stock-based
compensation 141,658 23,887 202,564 93,102
Goodwill Impairment - 63,309 - 63,309
Loss (Gain) on sale
of capital assets
and investments 1,410 - 4,610 ( 4,952)
Unrealized foreign
exchange gain ( 10,765) ( 20,135) ( 9,532) ( 6,978)
Future income tax
benefit ( 131,027) ( 113,497) ( 35,306) ( 737,111)
-------------------------------------------------------
Cash flow used in
operations before
other items ( 162,977) ( 194,052) 319,649 ( 1,164,160)
Net change in non-
cash operating
balance sheet
items 523,092 ( 593,002) ( 418,517) ( 1,538,546)
-------------------------------------------------------
360,115 ( 787,054) ( 98,868) ( 2,702,706)
INVESTING ACTIVITIES
Purchase of
investment in
Equus - 3,447 (309,556) (2,722,713)
Proceeds from
disposition of
capital assets (30,387) 33,519 76,968 57,253
Purchase of capital
assets 26,465 ( 26,390) ( 82,379) ( 99,606)
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( 3,922) 10,576 ( 314,967) ( 2,765,066)
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FINANCING ACTIVITIES
Proceeds from
issuance of shares - - - 3,876,257
Share issue costs - - - (26,291)
Proceeds from
(repayment of)
line of credit (131,060) 584,976 (345,545) 1,353,312
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-------------------------------------------------------
( 131,060) 584,976 ( 345,545) 5,203,278
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Increase (decrease)
in cash and cash
equivalents 225,133 ( 191,502) ( 759,380) ( 264,494)
CASH and cash
equivalents,
beginning of period 753,523 1,929,538 1,738,036 2,002,530
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-------------------------------------------------------
CASH and cash
equivalents, end of
period $ 978,656 $ 1,738,036 $ 978,656 $ 1,738,036
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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. All amounts are expressed in
U.S. dollars unless otherwise stated.
Contacts: Versatile Systems Inc. John Hardy Chairman and CEO
1-800-262-1633 International: 001-206-979-6760 Versatile Systems
Inc. Fraser Atkinson CFO 1-800-262-1633 www.versatile.com