Versatile Reports Third Quarter Results
May 30 2014 - 7:30AM
Marketwired
Versatile Reports Third Quarter Results
MECHANICSBURG, PENNSYLVANIA--(Marketwired - May 30, 2014) -
Versatile Systems Inc. (TSX-VENTURE:VV) announces its results for
the third quarter of the 2014 fiscal year.
Revenue for the
three months ended March 31, 2014 was $11,386,580, generating a
gross profit of $1,974,726 or 17.3% of sales compared to
$10,222,371, generating a gross profit of $1,697,798 or 16.6% of
sales for the same quarter last year. The Net Loss for the quarter
amounted to $560,852 ($0.00 per share), which includes
non-recurring expenses of $27,286, compared to a Net Loss of
$780,888 ($0.00 per share) for the same quarter last year.
Highlights for the
quarter included:
- Revenue for the three months ended March 31, 2014 was
$11,386,580 compared to $10,222,371 for the same quarter last year,
an increase of $1,164,209;
- The gross profit for the three months ended March 31, 2014 was
$1,974,726 or 17.3% of sales compared to $1,697,798 or 16.6% of
sales for the same quarter last year;
- The research and development expense for the quarter amounted
to $214,976 compared to $366,890 for the same quarter last year;
and
- Deferred revenue at March 31, 2014 was $5,613,780 (of which
$4,930,662 is expected to be recognized in the next four quarters)
compared to $6,835,938 at June 30, 2013.
During this current
quarter the Company continued to actively pursue its goal of
improved financial and operational performance. "I am proud of the
management team and the improving performance is the direct result
of effectively remodeling the business," said Kenny Kahn the
Company's Chief Executive Officer. "Since assembling this
management team, Versatile has been able to improve operational
performance quarter over quarter. I feel confident we can continue
this trend and get our Company back to profitability."
Revenue for the nine
months ended March 31, 2014 was $27,883,744 generating a gross
profit of $4,941,881 or 17.7% of sales compared to $27,688,798
generating a gross profit of $5,373,205 or 19.4% of sales for the
same period last year. The Net Loss for the period amounted to
$2,762,167 ($0.02 per share) compared to $1,679,571 ($0.01 per
share) for the same period last year.
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.versatilecredit.com and 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. ©
2014 Versatile Systems Inc. All rights reserved.
|
Versatile Systems Inc. |
|
Condensed Consolidated Statements of Financial Position |
|
(Unaudited - Prepared by Management) |
|
|
| Expressed in U.S. dollars |
March 31, 2014 |
|
June 30, 2013 |
|
|
(unaudited) |
|
|
|
| ASSETS |
|
|
|
|
|
|
| Current Assets |
|
|
|
|
|
|
|
Cash
and cash equivalents |
$ |
110,904 |
|
$ |
83,724 |
|
|
Investment in Equus |
|
1,798,203 |
|
|
1,798,203 |
|
|
Accounts receivable |
|
5,078,239 |
|
|
6,379,629 |
|
|
Prepaid expenses |
|
4,262,076 |
|
|
4,588,012 |
|
|
Inventory |
|
1,988,191 |
|
|
2,406,355 |
|
|
|
13,237,613 |
|
|
15,255,923 |
|
|
|
|
|
|
|
|
| Long-term accounts receivable |
|
568 |
|
|
14,368 |
|
| Long-term prepaid expenses |
|
618,955 |
|
|
1,140,311 |
|
| Capital Assets |
|
138,113 |
|
|
189,274 |
|
| Intangible assets |
|
139,194 |
|
|
169,959 |
|
| Deferred income tax assets |
|
336,275 |
|
|
336,275 |
|
| Goodwill |
|
2,718,970 |
|
|
2,718,970 |
|
|
$ |
17,189,688 |
|
$ |
19,825,080 |
|
| LIABILITIES |
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
|
Line
of credit |
$ |
4,083,417 |
|
$ |
3,602,269 |
|
|
Accounts payable and accrued liabilities |
|
6,435,267 |
|
|
6,963,126 |
|
|
Current portion of deferred revenue |
|
4,930,662 |
|
|
5,586,738 |
|
|
|
15,449,346 |
|
|
16,152,133 |
|
|
|
|
|
|
|
|
| Deferred Revenue |
|
683,118 |
|
|
1,249,200 |
|
| Convertible Loan |
|
475,816 |
|
|
- |
|
|
|
16,608,280 |
|
|
17,401,333 |
|
| SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Share
Capital |
|
55,175,946 |
|
|
54,433,709 |
|
|
Equity Reserve |
|
4,798,636 |
|
|
4,637,968 |
|
|
Deficit |
|
(59,075,203 |
) |
|
(56,313,036 |
) |
|
Accumulated other comprehensive loss |
|
(317,972 |
) |
|
(334,894 |
) |
|
|
581,408 |
|
|
2,423,747 |
|
|
|
|
|
|
|
|
|
$ |
17,189,688 |
|
$ |
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 March 31 |
|
Nine months ended March 31 |
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| SALES |
$ |
11,386,580 |
|
$ |
10,222,371 |
|
$ |
27,883,744 |
|
$ |
27,688,798 |
|
| COST OF SALES |
|
9,411,854 |
|
|
8,524,573 |
|
|
22,941,863 |
|
|
22,315,593 |
|
|
|
1,974,726 |
|
|
1,697,798 |
|
|
4,941,881 |
|
|
5,373,205 |
|
| EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing |
|
910,969 |
|
|
1,183,700 |
|
|
2,566,195 |
|
|
3,332,192 |
|
|
General and administrative |
|
1,267,490 |
|
|
859,206 |
|
|
3,632,073 |
|
|
2,513,936 |
|
|
Research and development |
|
214,976 |
|
|
366,890 |
|
|
839,732 |
|
|
925,985 |
|
|
Non
recurring expenses |
|
27,286 |
|
|
- |
|
|
434,705 |
|
|
- |
|
|
Amortization of capital assets |
|
20,118 |
|
|
24,408 |
|
|
61,065 |
|
|
101,409 |
|
|
Share-based compensation |
|
- |
|
|
2,188 |
|
|
- |
|
|
6,561 |
|
|
Foreign exchange (gain) loss |
|
(14,679 |
) |
|
(7,348 |
) |
|
(17,348 |
) |
|
2,198 |
|
|
|
2,426,160 |
|
|
2,429,044 |
|
|
7,516,422 |
|
|
6,882,281 |
|
| LOSS FROM OPERATIONS |
|
(451,434 |
) |
|
(731,246 |
) |
|
(2,574,541 |
) |
|
(1,509,076 |
) |
|
Interest expense and financing costs |
|
(108,218 |
) |
|
(24,766 |
) |
|
(183,838 |
) |
|
(63,580 |
) |
|
Equity loss from Investment in Equus |
|
- |
|
|
(23,881 |
) |
|
- |
|
|
(102,780 |
) |
|
Loss
on sale of capital assets |
|
- |
|
|
- |
|
|
(461 |
) |
|
- |
|
| LOSS BEFORE INCOME TAXES |
|
(559,652 |
) |
|
(779,893 |
) |
|
(2,758,840 |
) |
|
(1,675,436 |
) |
| Current income tax expense |
|
(1,200 |
) |
|
(995 |
) |
|
(3,327 |
) |
|
(4,135 |
) |
| NET LOSS |
$ |
(560,852 |
) |
$ |
(780,888 |
) |
$ |
(2,762,167 |
) |
$ |
(1,679,571 |
) |
|
|
| Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation |
|
(10,657 |
) |
|
6,075 |
|
|
16,922 |
|
|
5,978 |
|
| Total comprehensive loss |
$ |
(571,509 |
) |
$ |
(774,813 |
) |
$ |
(2,745,245 |
) |
$ |
(1,673,593 |
) |
|
|
| LOSS PER SHARE (basic and diluted) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.02 |
) |
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of common shares oustanding,
basic and diluted |
|
161,654,689 |
|
|
157,285,643 |
|
|
158,362,942 |
|
|
157,285,643 |
|
|
| Versatile Systems Inc. |
| Condensed Consolidated Statements of
Changes in Shareholders' Equity |
|
(Unaudited - Prepared by Management) |
|
|
Expressed in U.S. dollars |
|
|
|
|
|
|
|
|
|
|
|
|
Share Capital |
|
Equity Reserve |
|
Deficit |
|
Accumulated other comprehensive loss |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2012 |
$ |
54,433,709 |
|
$ |
4,629,219 |
|
$ |
(52,458,434 |
) |
$ |
(337,622 |
) |
$ |
6,266,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
loss |
|
- |
|
|
- |
|
|
(1,679,571 |
) |
|
- |
|
|
(1,679,571 |
) |
|
Foreign exchange on the translation of VMS-UK |
|
- |
|
|
- |
|
|
- |
|
|
5,978 |
|
|
5,978 |
|
|
Share-based compensation expense |
|
- |
|
|
6,561 |
|
|
- |
|
|
- |
|
|
6,561 |
|
|
Balance, March 31, 2013 |
|
54,433,709 |
|
|
4,635,780 |
|
|
(54,138,005 |
) |
|
(331,644 |
) |
|
4,599,840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2013 |
|
54,433,709 |
|
|
4,637,968 |
|
|
(56,313,036 |
) |
|
(334,894 |
) |
|
2,423,747 |
|
|
Shares issued during the period |
|
742,237 |
|
|
- |
|
|
- |
|
|
- |
|
|
742,237 |
|
|
Warrants issued during the period |
|
- |
|
|
33,714 |
|
|
- |
|
|
- |
|
|
33,714 |
|
|
Conversion option with the convertible loan |
|
- |
|
|
126,954 |
|
|
- |
|
|
- |
|
|
126,954 |
|
| Net
loss |
|
- |
|
|
- |
|
|
(2,762,167 |
) |
|
- |
|
|
(2,762,167 |
) |
|
Foreign exchange on the translation of VMS-UK |
|
- |
|
|
- |
|
|
- |
|
|
16,922 |
|
|
16,922 |
|
|
Balance, March 31, 2014 |
$ |
55,175,946 |
|
$ |
4,798,636 |
|
$ |
(59,075,203 |
) |
$ |
(317,972 |
) |
$ |
581,408 |
|
|
| Versatile Systems Inc. |
| Condensed Consolidated Statements of Cash
Flows |
|
(Unaudited - Prepared by Management) |
|
| Expressed in U.S. dollars |
Three months ended March 31 |
|
Nine months ended March 31 |
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(560,852 |
) |
$ |
(780,888 |
) |
$ |
(2,762,167 |
) |
$ |
(1,679,571 |
) |
|
Items not involving cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of capital assets |
|
20,118 |
|
|
24,408 |
|
|
61,065 |
|
|
101,409 |
|
|
|
Amortization of Financing costs |
|
51,520 |
|
|
- |
|
|
51,520 |
|
|
- |
|
|
|
Share-based compensation |
|
- |
|
|
2,188 |
|
|
- |
|
|
6,561 |
|
|
|
Loss
on sale of capital assets |
|
- |
|
|
- |
|
|
461 |
|
|
- |
|
|
|
Equity loss from Investment in Equus |
|
- |
|
|
23,881 |
|
|
- |
|
|
102,780 |
|
|
|
Unrealized foreign exchange loss (gain) |
|
- |
|
|
(409 |
) |
|
991 |
|
|
683 |
|
| Cash flow used in operations before other items |
|
(489,213 |
) |
|
(730,820 |
) |
|
(2,648,129 |
) |
|
(1,468,138 |
) |
|
|
Net
change in non-cash working capital |
|
(30,740 |
) |
|
675,027 |
|
|
837,121 |
|
|
90,061 |
|
|
|
(519,953 |
) |
|
(55,793 |
) |
|
(1,811,008 |
) |
|
(1,378,077 |
) |
| INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from disposition of capital assets |
|
- |
|
|
- |
|
|
1,418 |
|
|
- |
|
|
Intangible assets - contract cost additions |
|
(30,195 |
) |
|
(52,185 |
) |
|
(140,090 |
) |
|
(190,164 |
) |
|
Intangible assets - contract cost recognized |
|
57,937 |
|
|
58,491 |
|
|
176,690 |
|
|
203,864 |
|
|
Purchase of capital assets |
|
(3,355 |
) |
|
(15,815 |
) |
|
(10,117 |
) |
|
(43,319 |
) |
|
|
24,387 |
|
|
(9,509 |
) |
|
27,901 |
|
|
(29,619 |
) |
| FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the bridge loan |
|
- |
|
|
- |
|
|
742,237 |
|
|
- |
|
|
Repayment of the bridge loan |
|
(742,237 |
) |
|
- |
|
|
(742,237 |
) |
|
- |
|
|
|
Issuance of common shares |
|
742,237 |
|
|
- |
|
|
742,237 |
|
|
- |
|
|
|
Proceeds from the convertible loan |
|
586,902 |
|
|
- |
|
|
586,902 |
|
|
- |
|
|
|
Proceeds from line of credit |
|
(43,543 |
) |
|
36,167 |
|
|
481,148 |
|
|
1,014,616 |
|
|
|
543,359 |
|
|
36,167 |
|
|
1,810,287 |
|
|
1,014,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Increase (decrease) in cash and cash equivalents |
|
47,793 |
|
|
(29,135 |
) |
|
27,180 |
|
|
(393,080 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents, beginning of period |
|
63,111 |
|
|
70,780 |
|
|
83,724 |
|
|
434,725 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents, end of period |
$ |
110,904 |
|
$ |
41,645 |
|
$ |
110,904 |
|
$ |
41,645 |
|
Versatile Systems Inc.Kenny
KahnCEO717-620-2531kkahn@versatile.comwww.versatile.comMedia
Contact: Daum Weigle Inc.Jon
Daum858-538-9755jdaum@daumweigle.com
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