Not so bad !!!
VANCOUVER, CANADA--(Marketwire - Nov. 3, 2008) - Versatile Systems Inc. (TSX VENTURE:
VV -
News; AIM:VVS), today announces its results for the three months ended September 30, 2008.
Revenue for the three months ended September 30, 2008 was $14,303,851 compared to $12,615,506 for the same quarter last year, an increase of $1,688,345 or 13.4%. Cost of sales for the quarter amounted to $10,550,751 resulting in a gross profit of $3,753,100 or 26.2% of sales as compared to $9,535,389 resulting in a gross profit of $3,080,117 or 24.4% of sales for the same quarter last year. Research and Development costs for the quarter were $424,752 compared to $408,259 for the same quarter last year. The Net Earnings for the quarter amounted to $56,615 ($0.00 per share) compared to a Net Loss of $56,504 ($0.00 per share) for the same period last year.
The EBITDA for the quarter was $252,572 compared to an EBITDA of $10,791 for the same quarter last year. EBITDA is defined as net earnings before interest expense, income taxes, depreciation and amortization. The Company has included information concerning EBITDA because it believes that it may be used by certain investors as one measure of the Company's financial performance.
"The Company's operations have not been immune to the current economic crisis and we have been experiencing an overall slowdown in orders from customers which has impacted all areas of our business," said John Hardy, Chairman and CEO of Versatile. "Nevertheless, the Company enjoyed repeat business from its existing customer base, as well as new customers such as Tree of Life and generated positive cash flow from operations. We will continue to monitor our cost structure to ensure that it is in line with the overall performance of the business."
Highlights for the quarter included:
- Revenue for the three months ended September 30, 2008 was $14,303,851 compared to $12,615,506 for the same period last year, an increase of 13.4%;
- Cash flow from operations, before the non-cash working capital items, was $236,674 for the quarter ended September 30, 2008 compared to cash flow of $760 for the same period last year;
- Deferred revenue at September 30, 2008 was $7,773,787 (of which $6,516,296 is expected to be recognized in the next four quarters) compared to $7,343,606 at September 30, 2007, an increase of $430,181;
- Working capital as of September 30, 2008 of $3,938,350, an increase of $165,888 over the working capital at the year-end of June 30, 2008;
- Mobiquity Kiosk(TM) passed a milestone of generating more than $2 Billion of credit facilities since inception for 512,243 customers of retailers;
- Deploying the Mobiquity Route(TM) solution on the AT&T Data Network with Tree of Life; and
- Announcing the subscription packages for the Rockland and Madison Kiosks.
The working capital as of September 30, 2008 was $3,938,350, an increase of $165,888 over the working capital at the year-end of June 30, 2008.
"During the quarter our financial position continued to improve," said Fraser Atkinson, CFO of Versatile. "We also significantly reduced our cash outlays on investing and financing activities."
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. © 2008 Versatile Systems Inc. All rights reserved.
--------------------------------------------------------------------------Versatile Systems Inc.Consolidated Balance Sheets--------------------------------------------------------------------------Expressed in U.S. dollars September 30, 2008 June 30, 2008 ------------------ ------------- (unaudited)ASSETSCurrent Assets Cash and cash equivalents $ 1,136,432 $ 1,500,005 Accounts receivable 8,777,332 11,842,754 Current portion of deferred contract costs 4,940,787 4,918,704 Work-in-progress 156,459 80,668 Prepaid expenses 489,220 309,061 Inventory 1,748,322 1,944,100 Future income tax benefits 680,983 706,249 --------------------------- 17,929,535 21,301,541Long-term accounts receivable 38,081 26,522Deferred contract costs 1,076,692 1,050,694Capital Assets 892,106 867,771Intangible assets 604,846 695,726Future income tax benefits 4,547,393 4,672,907Goodwill 9,977,659 9,977,659 --------------------------- $ 35,066,312 $ 38,592,820 --------------------------- ---------------------------LIABILITIESCurrent Liabilities Line of credit $ - $ 74,942 Bank overdraft - 127,214 Accounts payable and accrued liabilities 7,454,889 10,704,330 Current portion of deferred revenue 6,516,296 6,582,593 Promissory Notes 20,000 40,000 --------------------------- 13,991,185 17,529,079Deferred Revenue 1,257,491 1,272,536 --------------------------- 15,248,676 18,801,615 ---------------------------SHAREHOLDERS' EQUITY Share Capital 50,713,746 51,353,054 Warrants 369,965 369,965 Contributed surplus 3,831,049 3,188,496 Deficit (35,006,481) (35,063,096) Accumulated other comprehensive income (loss) (90,643) (57,214) --------------------------- 19,817,636 19,791,205 --------------------------- $ 35,066,312 $ 38,592,820 --------------------------- -----------------------------------------------------------------------------------------------------Versatile Systems Inc.Consolidated Statements of Earnings and Deficit(unaudited - prepared by management)--------------------------------------------------------------------------Expressed in U.S. dollars Three months ended September 30 2008 2007 ---------------------------SALES $ 14,303,851 $ 12,615,506COST OF SALES 10,550,751 9,535,389 --------------------------- 3,753,100 3,080,117 ---------------------------EXPENSES General and administrative 1,323,060 1,094,919 Selling and marketing 1,769,825 1,531,330 Research and development 424,752 408,259 Foreign Exchange (gain) Loss (20,352) 8,967 Stock-based compensation 3,243 25,851 --------------------------- 3,500,528 3,069,326 ---------------------------Earnings before interest, taxes and amortization 252,572 10,791 Amortization of capital assets 69,900 57,174 Amortization of intangible assets 90,674 188,862 Interest expense 29,088 35,475 ---------------------------EARNINGS (LOSS) BEFORE INCOME TAXES 62,910 (270,720)Current income tax expense (4,500) (9,586)Future income tax (expense) benefit (1,795) 223,802 ---------------------------NET EARNINGS (LOSS) FOR THE PERIOD 56,615 (56,504) ---------------------------DEFICIT, BEGINNING OF PERIOD (35,063,096) (35,263,226) ---------------------------DEFICIT, END OF PERIOD (35,006,481) (35,319,730) --------------------------- ---------------------------EARNINGS PER SHARE (basic and fully diluted) $ 0.00 ($0.00) --------------------------- -----------------------------------------------------------------------------------------------------Versatile Systems Inc.Consolidated Statements of Comprehensive Income (Loss)(unaudited - prepared by management)--------------------------------------------------------------------------Expressed in U.S. dollars Three months ended September 30 2008 2007 ---------------------------Net earnings (loss) for the period 56,615 (56,504)Other comprehensive income (loss) Foreign currency translation adjustments (33,429) 43,078 ---------------------------Comprehensive income (loss) for the period 23,186 (13,426) --------------------------- --------------------------- Statement 4--------------------------------------------------------------------------Versatile Systems Inc.Consolidated Statements of Cash Flows(unaudited - prepared by management)--------------------------------------------------------------------------Expressed in U.S. dollars Three months ended September 30 2008 2007 ---------------------------CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Net earnings (loss) for the period $ 56,615 $ (56,504) Items not affecting cash Amortization of capital and intangible assets 166,902 246,036 Loss on disposal of capital assets - 212 Stock-based compensation 3,243 25,851 Foreign exchange loss 8,119 8,967 Future income tax expense (benefit) 1,795 (223,802) ---------------------------Cash flow from operations before other items 236,674 760 Net change in non-cash working capital items (385,172) 1,823,917 --------------------------- (148,498) 1,824,677CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES Proceeds from disposition of capital assets - 1,867 Additions to capital assets (103,478) (186,547) --------------------------- (103,478) (184,680) ---------------------------CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES Proceeds from issuance of shares, net of costs - 416,202 Repayment of line of credit (74,942) (3,383) Proceeds from (Repayment of) bank overdraft (127,214) 363,452 Repayment of the Term Loan - (175,000) Repayment of Promissory Notes (20,000) - Repayment of capital lease obligations - (2,738) --------------------------- (222,156) 598,533 ---------------------------Effect of foreign exchange rate on cash 110,559 (43,078)Increase (decrease) in cash and cash equivalents (363,573) 2,195,452CASH and cash equivalents, beginning of period 1,500,005 3,369,087 ---------------------------CASH and cash equivalents, end of period $ 1,136,432 $ 5,564,539 --------------------------- ---------------------------
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