RE: Shareholders and Insiders., Are we allMan, looking over the last Q2/04 report, this is starting to look like
a screaming buy at this price. Insiders buying at $0.35, you know where this is going
Versatile Mobile Systems Continues Growth Trend in Q2 2004 and Reports Profitable First Six Months
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03:01 EST Tuesday, January 20, 2004
VANCOUVER, BRITISH COLUMBIA--Versatile Mobile Systems (Canada) Inc. (TSX Venture Exchange symbol: VMS), a leading mobile commerce solutions provider, today announced its second quarter results for the period ended December 31, 2003.
"During the quarter, we were able to maintain profitable operations, increase our working capital position and continue to generate positive cash flow from operations," said John Hardy, Chairman and CEO of Versatile Mobile Systems. "We increased revenues by 30 % over the comparable quarter last year, managed our expenses and achieved profitability ahead of our 2004 fiscal plan. We will continue to cautiously invest in our initiatives for the balance of the year with the objective of maintaining profitable operations."
Revenue for the six months ended December 31, 2003 was $10,265,242 compared to $8,590,490 for the same period last year. The Net Earnings for the six-month period were $148,744 ($0.00 per share) compared to a loss of $1,850,196 ($0.02 per share) in the same period last year. The Net Earnings are after non-cash charges for amortization of capital assets and intangible assets of $167,933 compared to $234,634 for the same period last year.
Revenue for the quarter ended December 31, 2003 was $5,039,522 compared to $3,861,544 for the same quarter last year. The Net Earnings for the quarter were $4,780 compared to a loss of $1,068,604 ($0.01 per share) in the same quarter last year.
Revenue increased 19.5% over the comparable six-month period last year as a result of a general increase in activity in our market. In the quarter ended December 31, 2003 revenue increased 30.5% over the comparable quarter last year as a result of the completion of several key projects.
The year to date gross margin increased slightly to 32.6% as compared to a gross margin of 30.1% in the same period last year. However, the second quarter gross margin was 30.2% as compared to the 2003 second quarter gross margin of 25.7%.
General and administrative costs were $1,293,211 for the six-month period ended December 31, 2003 compared to $1,786,746 for the same period last year. General and administrative costs were $575,201 for the quarter as compared to $995,813 for the same quarter last year. Salary costs were lower in the current period due to the staff reductions that have been made over the past year, which along with reductions in investor relation costs, professional fees and premise costs have resulted in a significant reduction in the general and administrative expenses.
Research and development costs were $547,785 for the six-month period ended December 31, 2003 as compared to $1,194,339 for the same period last year. Research and development costs were $303,995 for the quarter as compared to $372,130 for the same quarter last year. The level of in house activity in research and development has decreased as the company had substantially completed its research and development initiatives by the end of the previous fiscal year. Staffing levels were reduced over the course of the prior year and the company expects these costs to continue at these levels for the remainder of this fiscal year.
Working capital at December 31, 2003 was $2,186,856 compared to working capital of $1,157,591 at June 30, 2003, an increase of $1,029,265. The ability of the Company to continue operations on an ongoing basis will be dependent on its ability to continue to generate sales, maintain profitable operations, maintain margins and control operating expenses. The company has cash on hand and accounts receivable sufficient for the company to meet all of its current obligations as they become due.
Cash generated from continuing operations for the six month period ended December 31, 2003 was $237,217 compared to cash flow required to fund operations of $1,610,559 for the same period last year.
Highlights of the Company's operations for the first six months included:
- Strengthening of the balance sheet with a non-brokered private placement of $870,000, of which the Directors put in $370,000 at a price of $0.35 per unit.
- Microsoft certification.
- Versatile named to Deloitte and Touche Fast 500 List, a ranking of the fastest growing 500 technology companies in North America.
- Cadbury, Ireland was upgraded to the current version of Versatile's Sales Supervisor product, which upgrade included integration with Cadbury's SAP system.
- Guinness, Ireland licensed Versatile's Shelf Space Planner, which enables their salespeople to create a unique Planogram for each pub or retailer they visit, resulting in the optimum product display.
About Versatile Mobile Systems
Versatile Mobile Systems provides mobile business solutions that enable companies to improve sales, marketing and distribution of their products. By using Versatile Mobile's technology, over 300 companies in the consumer packaged goods, and transportation industries have gained the benefits of supply chain visibility, shortened fulfillment cycles and improved customer satisfaction. Versatile's international customer list includes Cadbury Schweppes, Ocado, Albertsons, Michaels, Nordstrom, Publix Supermarkets, K&L Distributors, Rug Doctor and Keebler. Additional information is available at www.versatilemobile.com.
Forward-Looking Statements
This document may contain forward-looking statements relating to Versatile Mobile Systems' operations or to the environment in which it operates, which are based on Versatile Mobile Systems' 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 Mobile Systems' 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 Mobile Systems disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
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