Versatile Systems Inc. (Trading symbol on the TSX Venture
Exchange: VV), announces its results for the fourth quarter and the
2014 fiscal year.
Revenue for the three months ended June 30, 2014 was $8,485,599,
generating a gross profit of $1,027,270 or 12.1% of sales compared
to $8,584,095, generating a gross profit of $1,050,994 or 12.2% of
sales for the same quarter last year. The Net Loss for the quarter
amounted to $3,675,953 ($0.02 per share) compared to a Net Loss of
$2,172,843 ($0.01 per share) for the same period last year.
Highlights for the Fourth quarter:
- Revenue for the three months ended June
30, 2014 was $8,485,599 compared to $8,584,095 for the same quarter
last year;
- The gross profit for the three months
ended June 30 2014 was $1,027,270 or 12.1% of sales compared to
$1,050,994 or 12.2% of sales for the same quarter last year;
- Net Loss for the quarter amounted to
$3,675,953 ($0.02 per share) compared to Net Loss of $2,172,843
($0.01 per share) for the same quarter last year; Excluding the
non-cash items of $2,718,970 for goodwill impairment, write down of
deferred income tax assets in the amount of $336,275 the loss was
$620,708.
- The research and development expense
for the quarter amounted to $266,049 compared to $339,273 for the
same quarter last year;
- Deferred revenue at June 30, 2014 was
$6,542,049 (of which $5,986,803 is expected to be recognized in the
next four quarters) compared to $6,835,938 at June 30, 2013;
- The Company sold 960,087 shares of
their investment in Equus, which consisted of 970,087 shares of
Equus Total Return, Inc., a public company trading on the NYSE
under the symbol EQS, for proceeds of $2,340,422 which resulted in
a gain on disposal of $567,019. The carrying value of the remaining
Equus investment at June 30, 2014 was $24,800 (2013:
$1,798,203).
Revenue for the year ended June 30, 2014 was $36,369,343
generating a gross profit of $5,969,151 or 16.4% of sales compared
to $36,272,893 generating a gross profit of $6,424,199 or 17.7% of
sales for the same period last year. The Net Loss for the year
amounted to $6,438,120 ($0.04 per share) compared to $3,854,602
($0.02 per share) for the same period last year. The total
comprehensive loss for the year amounted to $6,434,487 compared to
a comprehensive loss of $3,851,874 for last year. The significant
components of the loss in the prior year, relates to the $2,718,970
for the Goodwill impairment for the U.S. Western operations and a
write-down of the Deferred income tax assets in the amount of
$336,275.
During this current quarter the Company continued to actively
pursue its goal of improved financial and operational performance.
"I am optimistic about the improving performance of the company as
a result of our focusing on operating cost reduction and an
emphasis on our higher growth business segments,” said Bertrand des
Pallieres the Company’s Executive Chairman.
About Versatile
Versatile is a multi-disciplinary technology company with
solutions across the mobile, digital signage, IT infrastructure,
software and hardware landscape. The company’s products are
utilized by Fortune 500 companies, leading financial institutions
and large and small retail organizations. For more information,
please visit 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.
Versatile Systems Inc. Consolidated Statements of Financial
Position Expressed
in U.S. dollars June 30, 2014 June 30, 2013 ASSETS
Current Assets Cash and cash equivalents $ 2,439,635 $ 83,724
Investment in Equus 24,800 1,798,203 Accounts receivable 4,593,075
6,379,629 Prepaid expenses 5,100,642 4,588,012 Inventory
1,153,376 2,406,355 13,311,528
15,255,923 Long-term Accounts Receivable 187 14,368
Long-term Prepaid Expenses 502,488 1,140,311 Capital Assets 184,260
189,274 Intangible Assets 112,867 169,959 Deferred Income Tax
Assets - 336,275 Goodwill - 2,718,970
$ 14,111,330 $ 19,825,080
LIABILITIES Current Liabilities Line of credit and bank overdraft $
4,492,062 $ 3,602,269 Accounts payable and accrued liabilities
5,957,226 6,963,126 Current portion of deferred revenue 5,986,802
5,586,738 Derivative liability 57,814 -
16,493,904 16,152,133 Deferred Revenue 555,246
1,249,200 Convertible Loan 386,353 -
17,435,503 17,401,333
SHAREHOLDERS’ EQUITY (DEFICIENCY) Share capital 55,120,276
54,433,709 Equity reserve 4,637,968 4,637,968 Accumulated deficit
(62,751,156 ) (56,313,036 ) Accumulated other comprehensive loss
(331,261 ) (334,894 ) (3,324,173 ) 2,423,747
$ 14,111,330 $ 19,825,080
Versatile Systems Inc. Consolidated Statements of
Comprehensive Loss
Expressed in U.S. dollars Year ended June 30 2014
2013 SALES $
36,369,343 $ 36,272,893 COST OF SALES 30,400,192
29,848,694 5,969,151
6,424,199 EXPENSES Selling and
marketing 3,419,190 4,445,260 General and administrative 5,330,648
3,485,107 Research and development 1,105,781 1,265,258 Amortization
of capital assets 77,237 119,709 Share-based compensation - 8,749
Foreign exchange (gain)/loss (41,997 ) 4,402
9,890,859 9,328,485 LOSS
FROM OPERATIONS (3,921,708 ) (2,904,286 ) Interest expense
(268,098 ) (93,784 ) Goodwill impairment (2,718,970 ) - Gain on
sale of investment 567,019 Equity gain (loss) from Investment in
Equus - (307,270 ) Loss on sale of capital assets (110 ) - Gain on
derivatives 244,549 - LOSS BEFORE INCOME TAXES
(6,097,318 ) (3,305,340 ) Current income tax expense (4,527
) (5,130 ) Deferred income taxes (336,275 )
(544,132 ) NET LOSS $ (6,438,120 ) $ (3,854,602 )
Other comprehensive income (loss) Foreign exchange
translation 3,633 2,728 Total
comprehensive loss $ (6,434,487 ) $ (3,851,874 ) LOSS
PER SHARE (basic and diluted) ($0.04 ) ($0.02
)
Weighted average number of common shares
outstanding, basic and diluted
168,198,052 157,285,643
Versatile Systems Inc. Consolidated Statements of Changes in
Shareholders' Equity (Deficit)
Expressed in U.S. dollars Share Equity
Accumulated other Capital Reserve Deficit
comprehensive loss Total Balance, June 30,
2012 $ 54,433,709 $ 4,629,219 $ (52,458,434 ) $ (337,622 ) $
6,266,872 Net loss - - (3,854,602 ) - (3,854,602 ) Foreign
exchange translation of subsidiary - - - 2,728 2,728 Share-based
compensation expense - 8,749 - - 8,749
Balance, June 30, 2013
54,433,709 4,637,968 (56,313,036 )
(334,894 ) 2,423,747
Balance, June 30, 2013 54,433,709 4,637,968 (56,313,036 )
(334,894 ) 2,423,747 Net loss - - (6,438,120 ) - (6,438,120
)
Shares Issued, net of share issuance
costs
686,567 - - - 686,567 Foreign exchange translation of subsidiary -
- - 3,633 3,633
Balance, June 30, 2014 55,120,276
4,637,968 (62,751,156 ) (331,261
) (3,324,173 )
Versatile Systems Inc.
Consolidated Statements of Cash Flows
Expressed in U.S. dollars
Year ended June 30
2014 2013
OPERATING ACTIVITIES Net loss $ (6,438,120 ) $ (3,854,602 ) Items
not involving cash Amortization of capital assets 77,237 119,709
Amortization of financing fees 68,100 - Inventory Write-down
738,892 - Fair value gain on investment in Equus
(567,019
)
- Share-based compensation - 8,749 Equity (gain) loss from
Investment in Equus - 307,270 Fair value gain on derivative
liabilities
(210,835
)
- Unrealized foreign exchange loss (gain) -
(2,045
)
Goodwill impairment 2,718,970
-
Deferred income taxes 336,275 544,132
Cash flow generated from (used in) operations before other
items
(3,276,500
)
(2,876,787
)
Net change in non-cash working capital 1,140,225
972,692
(2,136,275
)
(1,904,095
)
INVESTING ACTIVITIES Proceeds from disposition of capital
assets - - Intangible assets - contract cost additions (170,812 )
(261,361 ) Intangible assets - contract cost recognized 227,904
258,608 Purchase of capital assets
(68,590
)
(57,747
)
Sale of investment in Equus 2,340,422 -
2,328,924
(60,500
)
FINANCING ACTIVITIES Proceeds from line of credit and bank
overdraft 889,793 1,613,594 Proceeds from bridge loan 742,237 -
Repayment of bridge loan (244,952 ) - Issuance of common shares
189,282 - Proceeds - convertible loan 586,902
- 2,163,262 1,613,594
Effect of Foreign exchange rate on cash
- Increase (decrease) in cash and cash equivalents 2,355,911
(351,001
)
Cash and cash equivalents, beginning of year 83,724 434,725
Cash and cash equivalents, end of year $
2,439,635 $ 83,724
Versatile Systems Inc.Bertrand des PallieresExecutive
Chairman800-851-1281orVicki TurjanCFO800-851-1281