VMS
OCTOBER 14, 2003 - 00:15 ET
Versatile Mobile Systems Continues Growth Trend in Q1
2004 and Records First Quarterly Profit
VANCOUVER, BRITISH COLUMBIA--Versatile Mobile Systems (Canada)
Inc. (TSX Venture Exchange symbol: VMS), a leading mobile
commerce solutions provider, today announced its first quarter
results for the period ended September 30, 2003.
"During the quarter, we were able to achieve profitability,
increase our working capital position and generate positive cash
flow from continuing operations," said John Hardy, Versatile
Mobile's CEO. "We increased revenues, managed our expenses and
achieved profitability ahead of our 2004 fiscal plan. We hired
additional sales representatives and focused our resources on our
core intellectual property. 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 quarter ended September 30, 2003 was $5,225,720
compared to $4,728,946 for the same quarter last year. The Net
Earnings for the quarter were $143,964 ($0.00 per share) compared
to a loss of $781,592 ($0.01 per share) in the same quarter last
year. The Net Earnings is after non-cash charges for depreciation
and amortization of intangible assets of $86,028 for the quarter
compared to $139,508 last year.
Revenue increased by $496,774 over the same quarter last year as
a result of a general increase in activity in our market and
increased orders from existing customers. Sales in the period
were impacted by a decline of over 10% in the foreign exchange
rate with a proportionate impact on cost of sales and expenses.
Cost of sales for the quarter were $3,404,280 resulting in a
gross profit of 34.9% as compared to $3,134,699 resulting in a
gross profit of 33.7% in the same quarter last year. The increase
in the gross profit percentage compared to last year can be
attributed to a slight decrease in competitive pressure in our
market.
General and administrative costs were $718,010 for the quarter as
compared to $790,933 for the same quarter last year. Costs were
lower due to a reduction in professional fees and investor
relation costs. Management expects general and administrative
costs to continue to run at the same level as this quarter for
the balance of the year as there are no material changes in staff
levels or other costs expected.
Research and development costs were $243,790 for the quarter as
compared to $822,209 for the same quarter last year, which
included one time termination costs. 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. During the quarter the Company:
- Upgraded VM Pre-Sales (TM) for Pocket PC (TM),
- Launched VM Route Sales Lite (TM) for Pocket PC (TM), and
- Expanded Mobile Ranger's (TM) capabilities by adding GPRS and
GSM to meet customer requirements.
Selling and marketing costs for the quarter were $635,663
compared to $712,644 for the same quarter last year. The decrease
is attributable to lower salary and travel costs. These lower
costs were a result of the company refocusing its sales
activities on existing customers and recurring orders. Management
expects selling and marketing costs, excluding commissions that
vary with sales, to increase from this quarter over the balance
of the year. As a result of improving market conditions the
Company hired three (two in the U.S. and one in the UK)
additional senior sales people during the quarter. The Company
will continue to add sales and marketing resources to expand our
market share.
Working capital at September 30, 2003 was $1,317,861 compared to
$1,157,591 at June 30, 2003 an increase of $160,270. Cash and
cash equivalents at September 30, 2003 amounted to $831,909. The
ability of the Company to continue operations on an ongoing basis
will be dependent on its ability to maintain profitable
operations, continue to generate sales, maintain its 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 quarter was
$213,693 compared to cash required to fund continuing operations
of $507,164 for the same quarter last year. An additional
$480,648 was required to fund non-cash working capital, compared
to $491,762 for the same quarter last year.
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 Keeble(R).
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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