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Versatile Reports First Quarter Results

Thursday, November 29, 2012 5:01 PM


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VANCOUVER, CANADA -- (Marketwire) -- 11/29/12 -- Versatile Systems Inc. (TSX VENTURE:VV) announces its results for the first quarter of the 2013 fiscal year.

Revenue for the three months ended September 30, 2012 was $7,915,848, generating a gross profit of $1,832,779 or 23.2% of sales compared to $9,039,212, generating a gross profit of $1,790,378 or 19.8% of sales for the same quarter last year. The Loss from Operations for the quarter amounted to $329,594 compared to $488,503 for the same quarter last year, an improvement of $158,909. The Net Loss for the quarter amounted to $404,094 ($0.00 per share) compared to the Net Loss of $413,827 ($0.00 per share) for the same period last year.

Highlights for the quarter included:

--  Revenue for the three months ended September 30, 2012 was $7,915,848
    compared to $9,039,212 for the same quarter last year, a decrease of
    $1,123,364; 
--  The gross profit for the three months ended September 30, 2012 was
    $1,832,779 or 23.2% of sales compared to $1,790,378 or 19.8% of sales
    for the same quarter last year; 
--  The Earnings before interest, taxes, depreciation and amortization
    ("EBITDA") loss for the three months ended September 30, 2012 was
    $289,346 compared to an EBITDA loss of $440,084 for the same quarter
    last year, an improvement of $150,738; 
--  The research and development expense for the quarter amounted to
    $236,246 compared to $244,110 for the same quarter last year; 
--  Deferred revenue at September 30, 2012 was $6,453,971 (of which
    $5,269,399 is expected to be recognized in the next four quarters)
    compared to $6,047,097 at September 30, 2011, an increase of $406,874;
    and 
--  The expenses for the quarter were lower than any previous quarter in the
    last two years.

The research and development expense for the quarter amounted to $236,246 compared to $244,110 for the same quarter last year. During the current quarter, the Company incurred $87,728 for research and development activities related to an iPad application for Mobiquity Sell, Mobiquity Route(TM) and $106,956 primarily related to Smart Sign(TM).

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. © 2012 Versatile Systems Inc. All rights reserved.

----------------------------------------------------------------------------
Versatile Systems Inc.                                                      
Condensed Consolidated Statements of Financial Position                     
(Unaudited - Prepared by Management)                                        
----------------------------------------------------------------------------
                                                                            
                                             September 30,         June 30, 
Expressed in U.S. dollars                             2012             2012 
                                          ----------------------------------
                                                (unaudited)                 
ASSETS                                                                      
Current Assets                                                              
  Cash and cash equivalents                $       265,684  $       434,725 
  Accounts receivable                            5,523,198        5,994,377 
  Prepaid expenses                               4,472,890        4,152,994 
  Inventory                                      2,395,005        2,347,110 
                                          ----------------------------------
                                                12,656,777       12,929,206 
Long-term accounts receivable                      135,489          181,366 
Long-term prepaid expenses                       1,068,012        1,278,432 
Investment in Equus                              2,051,833        2,105,473 
Capital Assets                                     229,989          251,591 
Intangible assets                                  161,035          167,206 
Deferred income tax assets                         880,407          880,407 
Goodwill                                         2,718,970        2,718,970 
                                          ----------------------------------
                                           $    19,902,512  $    20,512,651 
                                          ----------------------------------
                                          ----------------------------------
LIABILITIES                                                                 
Current Liabilities                                                         
  Line of credit                           $     2,263,950  $     1,988,675 
  Accounts payable and accrued liabilities       5,320,745        5,544,888 
  Current portion of deferred revenue            5,269,399        5,292,359 
                                          ----------------------------------
                                                12,854,094       12,825,922 
Deferred Revenue                                 1,184,572        1,419,857 
                                          ----------------------------------
                                                14,038,666       14,245,779 
                                          ----------------------------------
SHAREHOLDERS' EQUITY                                                        
  Share Capital                                 54,433,709       54,433,709 
  Equity Reserve                                 4,631,405        4,629,219 
  Deficit                                      (52,862,728)     (52,458,434)
  Accumulated other comprehensive loss            (338,540)        (337,622)
                                          ----------------------------------
                                                 5,863,846        6,266,872 
                                          ----------------------------------
                                                                            
                                           $    19,902,512  $    20,512,651 
                                          ----------------------------------
                                          ----------------------------------
                                                                            
----------------------------------------------------------------------------
Versatile Systems Inc.                                                      
Condensed Consolidated Statements of Operations and Comprehensive Loss      
(Unaudited - Prepared by Management)                                        
----------------------------------------------------------------------------
                                                                            
                                                        Three months ended  
Expressed in U.S. dollars                                  September 30     
                                                           2012        2011 
                                                    ------------------------
                                                                  (Restated)
                                                                            
SALES                                                $7,915,848  $9,039,212 
COST OF SALES                                         6,083,069   7,248,834 
                                                    ------------------------
                                                      1,832,779   1,790,378 
                                                    ------------------------
EXPENSES                                                                    
  Selling and marketing                               1,062,543   1,019,931 
  General and administrative                            809,016     961,127 
  Research and development                              236,246     244,110 
  Amortization of capital assets                         40,248      48,419 
  Share-based compensation                                2,186       4,470 
  Foreign exchange loss                                  12,134         824 
                                                    ------------------------
                                                      2,162,373   2,278,881 
                                                    ------------------------
LOSS FROM OPERATIONS                                   (329,594)   (488,503)
  Interest expense                                      (18,915)     (5,223)
  Equity loss from Investment in Equus                  (53,640)    (53,916)
                                                    ------------------------
LOSS BEFORE INCOME TAXES                               (402,149)   (547,642)
Current income tax expense                               (2,145)     (1,345)
Deferred income tax recovery                                  -     135,160 
                                                    ------------------------
NET LOSS                                             $ (404,294) $ (413,827)
                                                    ------------------------
                                                    ------------------------
                                                                            
Other comprehensive loss                                                    
  Foreign exchange translation                             (918)          - 
                                                    ------------------------
                                                                            
Total comprehensive loss                             $ (405,212) $ (413,827)
                                                    ------------------------
                                                    ------------------------
                                                                            
LOSS PER SHARE (basic and diluted)                       ($0.00)     ($0.00)
                                                    ------------------------
                                                    ------------------------
                                                                            
----------------------------------------------------------------------------
Versatile Systems Inc.                                                      
Condensed Consolidated Statements of Changes in Shareholders' Equity        
(Unaudited - Prepared by Management)                                        
----------------------------------------------------------------------------
                                                                            
Expressed in U.S. dollars                                                   
                                                                            
                                                                            
                                          Share       Warrant         Equity
                                        Capital       Reserve        Reserve
                                 -------------------------------------------
                                                                            
                                                                            
Balance, June 30, 2011            $  54,433,709 $      42,000  $   4,578,470
Net loss                                      -             -              -
Expiration of warrants                        -       (42,000)        42,000
Share-based compensation expense              -             -          4,470
                                 -------------------------------------------
Balance, September 30, 2011          54,433,709             -      4,624,940
                                 -------------------------------------------
                                 -------------------------------------------
                                                                            
                                                                            
Balance, June 30, 2012               54,433,709             -      4,629,219
Net loss                                      -             -              -
Foreign exchange on the                                                     
 translation of VMS-UK                        -             -              -
Share-based compensation expense              -             -          2,186
                                 -------------------------------------------
Balance, September 30, 2012       $  54,433,709 $           -  $   4,631,405
                                 -------------------------------------------
                                 -------------------------------------------
                                                                            
----------------------------------------------------------------------------
Versatile Systems Inc.                                                      
Condensed Consolidated Statements of Changes in Shareholders' Equity        
(Unaudited - Prepared by Management)                                        
----------------------------------------------------------------------------
                                                                            
Expressed in U.S. dollars                                                   
                                                   Accumulated              
                                                         other              
                                                 comprehensive              
                                       Deficit            loss        Total 
                                 -------------------------------------------
                                     (Restated)                   (Restated)
                                                                            
Balance, June 30, 2011            $(37,741,276) $     (326,261) $20,986,642 
Net loss                              (413,827)              -     (413,827)
Expiration of warrants                       -               -            - 
Share-based compensation expense             -               -        4,470 
                                 -------------------------------------------
Balance, September 30, 2011        (38,155,103)       (326,261)  20,577,285 
                                 -------------------------------------------
                                 -------------------------------------------
                                                                            
                                                                            
Balance, June 30, 2012             (52,458,434)       (337,622)   6,266,872 
Net loss                              (404,294)              -     (404,294)
Foreign exchange on the                                                     
 translation of VMS-UK                       -            (918)        (918)
Share-based compensation expense             -               -        2,186 
                                 -------------------------------------------
Balance, September 30, 2012       $(52,862,728) $     (338,540) $ 5,863,846 
                                 -------------------------------------------
                                 -------------------------------------------
                                                                            
Versatile Systems Inc.                                                      
Condensed Consolidated Statements of Cash Flows                             
(Unaudited - Prepared by Management)                                        
                                                                            
                                                       Three months ended   
Expressed in U.S. dollars                                 September 30      
                                                          2012         2011 
                                                  --------------------------
                                                                  (Restated)
                                                                            
OPERATING ACTIVITIES                                                        
  Net loss                                         $  (404,294) $  (413,827)
  Items not involving cash                                                  
    Amortization of capital assets                      40,248       52,509 
    Share-based compensation                             2,186        4,470 
    Equity loss from Investment in Equus                53,640       53,916 
    Deferred income taxes                                    -     (135,160)
                                                  --------------------------
Cash flow used in operations before other items       (308,220)    (438,092)
    Net change in non-cash working capital            (122,701)     333,991 
                                                  --------------------------
                                                      (430,921)   ( 104,101)
INVESTING ACTIVITIES                                                        
  Proceeds from disposition of capital assets                -        1,341 
  Intangible assets - contract cost additions          (78,405)    (103,147)
  Intangible assets - contract cost recognized          84,576       81,245 
  Purchase of capital assets                           (19,566)     ( 7,209)
                                                  --------------------------
                                                       (13,395)    ( 27,770)
                                                  --------------------------
FINANCING ACTIVITIES                                                        
  Proceeds from (Repayment of) line of credit          275,275     (282,786)
                                                  --------------------------
                                                       275,275     (282,786)
                                                  --------------------------
                                                                            
Decrease in cash and cash equivalents                 (169,041)    (414,657)
                                                                            
Cash and cash equivalents, beginning of period         434,725      978,656 
                                                  --------------------------
                                                                            
Cash and cash equivalents, end of period           $   265,684  $   563,999 
                                                  --------------------------
                                                  --------------------------

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contacts:
Versatile Systems Inc.
John Hardy
Chairman and CEO
1-800-262-1633 or International: 001-206-979-6760

Versatile Systems Inc.
Fraser Atkinson
CFO
1-800-262-1633
www.versatile.com

(Source: Market Wire )
(Source: Quotemedia)

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