Business & Finance
Thu, June 3, 2010Wed, June 2, 2010Tue, June 1, 2010Mon, May 31, 2010Fri, May 28, 2010Thu, May 27, 2010Wed, May 26, 2010Tue, May 25, 2010Versatile Reports Third Quarter Results
//business-finance.news-articles.net/content/201 .. /31/versatile-reports-third-quarter-results.html
Published in Business and Finance on Monday, May 31st 2010 at 1:01 GMT by Market Wire🞛 This publication is a summary or evaluation of another publication
VANCOUVER, CANADA--(Marketwire - May 31, 2010) - Versatile Systems Inc. (TSX VENTURE:VV)(AIM:VVS), announces its results for the third quarter of the 2010 fiscal year. All amounts are expressed in U.S. dollars unless otherwise stated.
Revenue for the three months ended March 31, 2010 was $9,795,481 generating a gross profit of $2,301,779 or 23.5% of sales compared to $10,877,354 generating a gross profit of $2,323,987 or 21.4% of sales for the same quarter last year. The EBITDA loss for the quarter amounted to $405,837 excluding the Non-recurring expense of $525,656 compared to an EBITDA loss of $372,057 excluding the Nonrecurring expense of $160,158 for the same period last year.
"Oracle's acquisition of Sun Microsystems was completed during the quarter. The acquisition created uncertainty amongst our customer base, and had a negative effect on both our pipeline and top line revenue which continued throughout the quarter," said John Hardy, Chairman and CEO of Versatile. "Nevertheless, we generated substantially the same gross profit dollars, used less cash to fund operations, and had an operational loss less than the comparable quarter last year."
Highlights for the quarter included:
- Cash and cash equivalents at March 31, 2010 was $1,929,538 compared to $2,002,530 at June 30, 2009;
- Short term investment of 822,031 shares of Equus Total Return, Inc. which is a public company trading on the NYSE under the symbol EQS;
- Revenue for the three months ended March 31, 2010 was $9,795,481 compared to $10,877,354 for the same quarter last year, a decrease of $1,081,873;
- Gross profit of $2,301,779 or 23.5% of sales as compared to a gross profit of $2,323,987 or 21.4% of sales for the same quarter last year;
- Non-recurring expense of $525,656 (March 31, 2009 - $160,158) primarily for legal costs, incurred in the prosecution of an Arbitration matter, the trial of which lasted three weeks and was completed in March. The Arbitration dealt with a transaction that occurred in a prior period;
- Cash flow used in operations (before working capital items and the Non recurring expense) was $316,576 compared to $413,962 for the same quarter last year;
- EBITDA loss for the quarter amounted to $405,837 excluding the Non-recurring expense of $525,656 compared to an EBITDA loss of $372,057 excluding Non-recurring expense of $160,158 for the same period last year;
- Deferred revenue at March 31, 2010 was $6,557,618 (of which $5,767,807 is expected to be recognized in the next four quarters) compared to $7,515,600 for the same quarter last year;
- Net Loss for the quarter amounted to $816,850 ($0.01 per share) compared to a Net Loss of $572,955 ($0.00 per share) for the same period last year;
- Working capital as of March 31, 2010 was $5,195,084, compared to the working capital of $2,570,421 at June 30, 2009, an increase of $2,624,663; and
- Research and development expense for the quarter amounted to $185,289 compared to $278,701 for the same quarter last year.
The working capital as of March 31, 2010 was $5,195,084, an increase of $2,624,663 compared to the working capital of $2,570,421 at June 30, 2009.
Revenue for the nine months ended March 31, 2010 was $32,670,998 generating a gross profit of $7,617,163 or 23.3% of sales compared to $37,508,269 generating a gross profit of $9,116,482 or 24.3% of sales for the same period last year. The Net Loss before interest, taxes and amortization for the period amounted to $510,494 excluding the Non-recurring expense of $573,735 compared to $393,255 excluding the Non-recurring expense of $532,335 for the same period last year.
"While other companies in similar sectors have experienced a drop in quarterly revenue of more than a third over the previous year, the Company has managed to maintain its customer base during these difficult economic times," said Fraser Atkinson, CFO of Versatile.
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. (C) 2010 Versatile Systems Inc. All rights reserved.
---------------------------------------------------------------------------
Versatile Systems Inc.
Consolidated Balance Sheets
(unaudited - prepared by management)
---------------------------------------------------------------------------
Expressed in U.S. dollars March 31, 2010 June 30, 2009
-------------- -------------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 1,929,538 $ 2,002,530
Short term investments 2,726,160 -
Accounts receivable 4,817,366 8,408,093
Current portion of deferred
contract costs 4,154,312 5,745,493
Work-in-progress 92,630 92,145
Prepaid expenses 353,596 286,709
Inventory 1,705,666 1,376,746
Future income tax benefits 944,843 944,843
-----------------------------
16,724,111 18,856,559
Long-term accounts receivable 281,060 112,781
Deferred contract costs 652,947 803,246
Capital Assets 587,230 794,008
Intangible assets 60,719 332,953
Future income tax benefits 5,907,510 5,283,896
Goodwill 9,977,659 9,977,659
-----------------------------
$ 34,191,236 $ 36,161,102
-----------------------------
-----------------------------
LIABILITIES
Current Liabilities
Line of credit and bank overdraft $ 768,336 $ -
Accounts payable and accrued liabilities 4,992,884 8,530,987
Current portion of deferred revenue 5,767,807 7,755,151
-----------------------------
11,529,027 16,286,138
Deferred Revenue 789,811 977,411
-----------------------------
12,318,838 17,263,549
-----------------------------
SHAREHOLDERS' EQUITY
Share Capital 54,433,709 50,583,743
Warrants 186,367 186,367
Contributed surplus 4,207,602 4,138,437
Deficit (36,673,501) (35,729,215)
Accumulated other comprehensive loss (281,779) (281,779)
-----------------------------
21,872,398 18,897,553
-----------------------------
$ 34,191,236 $ 36,161,102
-----------------------------
-----------------------------
---------------------------------------------------------------------------
Versatile Systems Inc.
Consolidated Statements of Earnings (Loss) and Deficit
(unaudited - prepared by management)
---------------------------------------------------------------------------
Expressed in Three Months ended Nine Months ended
U.S. dollars March 31 March 31
2010 2009 2010 2009
---------------------------------------------------
SALES $ 9,795,481 $ 10,877,354 $ 32,670,998 $ 37,508,269
COST OF SALES 7,493,702 8,553,367 25,053,835 28,391,787
---------------------------------------------------
2,301,779 2,323,987 7,617,163 9,116,482
---------------------------------------------------
EXPENSES
General and
administrative 944,266 899,421 2,918,759 3,500,901
Selling and
marketing 1,490,778 1,515,711 4,471,554 5,002,847
Research and
development 185,289 278,701 679,043 1,094,541
Non recurring
expenses 525,656 160,158 573,735 532,335
Foreign exchange
(gain) loss 63,698 (485) (10,914) (97,244)
Stock-based
compensation 23,585 2,696 69,215 8,692
---------------------------------------------------
3,233,272 2,856,202 8,701,392 10,042,072
---------------------------------------------------
Earnings (loss)
before interest,
taxes and
amortization (931,493) (532,215) (1,084,229) (925,590)
Amortization of
capital assets 61,957 91,598 190,868 248,904
Amortization of
intangible assets 90,674 90,675 272,023 272,024
Interest expense 7,781 (1,648) 21,991 27,794
Gain on sale of
investments - - (4,952) -
---------------------------------------------------
EARNINGS (LOSS)
BEFORE INCOME TAXES (1,091,905) (712,840) (1,564,159) (1,474,312)
Current income
tax expense (993) (43,748) (3,741) (64,292)
Future income
tax benefit 276,048 183,633 623,614 489,093
---------------------------------------------------
NET EARNINGS (LOSS) (816,850) (572,955) (944,286) (1,049,511)
---------------------------------------------------
DEFICIT, BEGINNING
OF PERIOD (35,856,651) (35,539,652) (35,729,215) (35,063,096)
---------------------------------------------------
DEFICIT, END OF PERIOD (36,673,501) (36,112,607) (36,673,501) (36,112,607)
---------------------------------------------------
---------------------------------------------------
EARNINGS (LOSS) PER
SHARE
(basic and diluted) ($0.01) ($0.00) ($0.01) ($0.01)
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------------------------------
Versatile Systems Inc.
Consolidated Statements of Comprehensive (Loss) Income
(unaudited - prepared by management)
---------------------------------------------------------------------------
Three Months ended Nine Months ended
Expressed in U.S. dollars March 31 March 31
2010 2009 2010 2009
---------------------------------------------
Net earnings (loss) (816,850) (572,955) (944,286) (1,049,511)
Other comprehensive
(loss) income
Foreign currency
translation
adjustments 0 (24,608) 0 (400,500)
---------------------------------------------
Comprehensive
(loss) income (816,850) (597,563) (944,286) (1,450,011)
---------------------------------------------
---------------------------------------------
---------------------------------------------------------------------------
Versatile Systems Inc.
Consolidated Statements of Cash Flows
(unaudited - prepared by management)
---------------------------------------------------------------------------
Three Months ended Nine Months ended
Expressed in March 31 March 31
U.S. dollars 2010 2009 2010 2009
--------------------------------------------------
CASH FLOWS FROM (USED IN)
OPERATING ACTIVITIES
Net earnings (loss) $ (816,850) $ (572,955) $ (944,286) $(1,049,511)
Items not affecting
cash
Amortization of
capital and
intangible assets 171,385 182,273 520,372 527,256
Stock-based
compensation 23,585 2,696 69,215 8,692
Gain on sale of
investments - - (4,952) -
Unrealized foreign
exchange loss
(gain) 55,696 (2,501) 13,157 33,531
Future income tax
benefit (276,048) (183,633) (623,614) (489,093)
--------------------------------------------------
Cash flow from
(used in) operations
before other items (842,232) (574,120) (970,108) (969,125)
Net change in non-cash
working capital items 1,211,698 309,926 (945,544) 2,138,591
--------------------------------------------------
369,466 (264,194) (1,915,652) 1,169,466
CASH FLOWS FROM (USED IN)
INVESTING ACTIVITIES
Short term investments (425,325) - (2,726,160) -
Proceeds from
disposition of capital
assets 16,033 1,820 23,734 1,820
Additions to capital
assets (35,950) (24,472) (73,216) (234,461)
--------------------------------------------------
(445,242) (22,652) (2,775,642) (232,641)
--------------------------------------------------
CASH FLOWS FROM (USED IN)
FINANCING ACTIVITIES
Proceeds from issuance
of shares - - 3,876,257 -
Share issue costs - - (26,291) -
Purchase of company
shares - 709 - (24,379)
Proceeds from
(Repayment of)
line of credit (1,790,109) - 768,336 (74,942)
Repayment of bank
overdraft - - - (127,214)
Repayment of
Promissory Notes - - - (40,000)
--------------------------------------------------
(1,790,109) 709 4,618,302 (266,535)
--------------------------------------------------
Effect of foreign
exchange rate on cash - 15,269 - (69,650)
Increase in cash and
cash equivalents (1,865,885) (270,868) (72,992) 600,640
CASH and cash
equivalents,
beginning of period 3,795,423 2,371,513 2,002,530 1,500,005
--------------------------------------------------
CASH and cash
equivalents, end of
period $ 1,929,538 $2,100,645 $ 1,929,538 $ 2,100,645
--------------------------------------------------
--------------------------------------------------
Supplementary information
Cash paid for interest
expense $ 11,170 $ 757 $ 25,842 $ 26,558
Cash paid for income
taxes 440 54,089 3,403 84,694
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.