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Versatile Reports the Results for Its Year-End
Thursday, October 2, 2008
Website | News Archive
Vancouver, BC, October 2, 2008--(T-Net)--Versatile Systems Inc. (TSX VENTURE:VV; AIM:VVS), today announced its results for the fourth quarter and the year ended June 30, 2008.
Revenue for the twelve months ended June 30, 2008 was $59,380,354 generating a gross profit of $14,852,818 or 25.0% of revenue compared to $62,230,275 generating a gross profit of $14,715,797 or 23.7% of revenue for the same period last year. The Company generated sales of higher margin products resulting in an increase in gross profit of $137,021 compared with the prior year. Net Earnings for the period amounted to $200,130 ($0.00 per share) compared to $1,379,445 ($0.01 per share) for the prior year with the significant change relating to the future income tax expense of $101,604 for the current year compared to a benefit of $951,622 for the prior year. Comprehensive income for the year amounted to $427,253 compared to $1,403,649 for the prior year.
The EBITDA for the year was $1,289,230 compared to an EBITDA of $1,992,905 for the same period 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 downturn in the U.S. economy has impacted all aspects of our business," said John Hardy, Chairman and CEO of Versatile. "Nevertheless we continued to generate significant cash flow from operations while also investing in our proprietary products and sales resources. As the economy improves we will be positioned to respond to and support growth opportunities."
The cash flow from operations, before non-cash working capital items, was $1,452,981 for the year ended June 30, 2008 compared to cash flow of $2,159,289 for the same period last year. Over the past four years the cash flow from operations, before non-cash working capital items, has been as follows:
2008 $1,452,981
2007 2,159,289
2006 1,099,233
2005 (878,482)
The Company had working capital of $3,772,462 at June 30, 2008, an improvement of $1,084,963 over the working capital at the year-end on June 30, 2007. During the current fiscal year the Company repaid two term loans in the amount of $2,924,263, which had been classified with current liabilities.
"During the year our financial position improved," said Fraser Atkinson, CFO of Versatile. "Our working capital increased by $1,084,963, and we generated $1,452,981 cash flow from operations. We repaid two term loans totaling $2,924,263. In addition our deferred revenue increased by $1,067,850."
Highlights for the year included:
- Revenue for the twelve months ended June 30, 2008 was $59,380,354 generating a gross profit of $14,852,818 or 25.0% of revenue compared to $62,230,275 generating a gross profit of $14,715,797 or 23.7% of revenue for the same period last year;
- Deferred revenue at June 30, 2008 was $7,855,129 (of which $6,582,593 is expected to be recognized in the next four quarters) compared to $6,787,279 at June 30, 2007, an increase of $1,067,850 or 15.7%;
- The working capital as of June 30, 2008 was $3,772,462, an improvement of $1,084,963 over the working capital at the year-end of June 30, 2007;
- Obtained a line of credit of $5,800,000 from the Commerce Bank, an increase from the previous line of credit of $3,000,000; and
- Mobiquity Kiosk(TM): implementation of a new HSBC-based financial services kiosk which enables electronic processing of private label credit applications, MasterCard loyalty credit card applications, credit limit checks and information on other HSBC financial products and services;
- Mobiquity Kiosk(TM) implementation of a kiosk-based electronic credit application for Citi Financial;
- Deployed a large scale virtualization solution in each of the healthcare and telecommunication sectors;
- Completed the first phase of deployment of a route accounting system for Tree of Life, a major U.S. distributor, with Versatile's Mobiquity Route(TM) 4.0 as the core driver of this system.
- Partnering with CitiFinancial in order to simplify and streamline the credit application process for Shaw flooring retailers with the Mobiquity Kiosk(TM);
- Completed large Proof of Concept deployments of Virtual Desktop Infrastructure for a leading global financial services company and a global education provider; and
- Opened the Versatile Virtual Desktop Infrastructure Center of Excellence in conjunction with Sun Microsystems at their New York City Metro headquarters in Manhattan.
Revenue for the three months ended June 30, 2008 was $13,721,812 compared to $18,193,167 for the same quarter last year, a decrease of $4,471,355. While the Company had repeat business from its existing customer base, the Company experienced a slowdown in orders from customers for routine expenditures on infrastructure. The EBITDA for the quarter was $155,206 compared to an EBITDA of $977,377 for the same quarter last year. The Net Loss for the quarter amounted to $362,043 ($0.00 per share) compared to Net Earnings of $992,566 ($0.01 per share) for the same period last year with the significant change relating to the future income tax expense of $294,213 for the current year compared to a future income tax benefit of $408,067 for the same quarter last year.
Technology Development
During the fourth quarter the Company spent $448,260 on Research and development compared to $339,369 in the same period last year. Versatile had many feature improvements to current product lines.
For the Mobiquity Route(TM) these included the following:
- Implementation of new features into Mobiquity Route(TM), including:
-- Non-APL warnings and APL filterings
-- Warehouse stock-on-hand quantities
-- Brand lookup capabilities
-- Discontinued Items warnings
-- Historical Data
-- Promotional Items
-- Suggested Product Substitutions
-- CheckSelect(TM) feature
-- Intelligent Orders(TM) feature set
- Implementation of a demonstration system for AT&T sales representatives to pre-sell Mobiquity Route(TM); and
For the Mobiquity Transaction Engine 3.0(TM) these included the following:
- Implementation of an RFID-based manufacturing solution for tracking pallets and work-in-progress in a manufacturing facility;
- Implementation of support for WiFi Location tracking using Cisco access points and Cisco's Location Appliance;
- Implementation of the Mobiquity Transaction Engine 3.0(TM) Health Care asset-tracking solution, which allows high-value assets to be tracked and intelligently monitored using Mobiquity Transaction Engine 3.0(TM) and WiFi location tags;
- Expanded device support for the Mobiquity Transaction Engine 3.0(TM), including Symbol handheld scanners, Alien RFID readers, Data Logic RFID Readers, Cisco Wifi Location data, Newbury Wifi Location data; and
- Enhancing the functionality of the Mobiquity Transaction Engine 3.0(TM) Time Tracking System.
For the Mobiquity Kiosk(TM), these included the following:
- Deployment of the hardware and operating system support for the new Madison Kiosk desktop computer;
- Implementation of the Shaw Flooring Alliance credit application in association with Citi Financial;
- Implementation of self-service conference registration kiosk application;
- Implementation of an application to allow customers to register for retailer mailings at the kiosk; and
- Enhancements to the Kiosk platform including improved networking support, better system performance, expanded device support, improved configuration, and support for new banking requirements.
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) 2008 Versatile Systems Inc. All rights reserved.
Contact:
John Hardy
Versatile Systems Inc.
Chairman and CEO
1-800-262-1633 or International: 001-206-979-6760
Fraser Atkinson
Versatile Systems Inc.
CFO
1-800-262-1633
Website: www.versatile.com
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