Versatile Reports Fourth Quarter and Fiscal 2014 Results

Versatile Systems Inc. (Trading symbol on the TSX Venture Exchange: VV), announces its results for the fourth quarter and the 2014 fiscal year.

Revenue for the three months ended June 30, 2014 was $8,485,599, generating a gross profit of $1,027,270 or 12.1% of sales compared to $8,584,095, generating a gross profit of $1,050,994 or 12.2% of sales for the same quarter last year. The Net Loss for the quarter amounted to $3,675,953 ($0.02 per share) compared to a Net Loss of $2,172,843 ($0.01 per share) for the same period last year.

Highlights for the Fourth quarter:

• Revenue for the three months ended June 30, 2014 was $8,485,599 compared to $8,584,095 for the same quarter last year;
• The gross profit for the three months ended June 30 2014 was $1,027,270 or 12.1% of sales compared to $1,050,994 or 12.2% of sales for the same quarter last year;
• Net Loss for the quarter amounted to $3,675,953 ($0.02 per share) compared to Net Loss of $2,172,843 ($0.01 per share) for the same quarter last year; Excluding the non-cash items of $2,718,970 for goodwill impairment, write down of deferred income tax assets in the amount of $336,275 the loss was $620,708.
• The research and development expense for the quarter amounted to $266,049 compared to $339,273 for the same quarter last year;
• Deferred revenue at June 30, 2014 was $6,542,049 (of which $5,986,803 is expected to be recognized in the next four quarters) compared to $6,835,938 at June 30, 2013;
• The Company sold 960,087 shares of their investment in Equus, which consisted of 970,087 shares of Equus Total Return, Inc., a public company trading on the NYSE under the symbol EQS, for proceeds of $2,340,422 which resulted in a gain on disposal of $567,019. The carrying value of the remaining Equus investment at June 30, 2014 was $24,800 (2013: $1,798,203).

Revenue for the year ended June 30, 2014 was $36,369,343 generating a gross profit of $5,969,151 or 16.4% of sales compared to $36,272,893 generating a gross profit of $6,424,199 or 17.7% of sales for the same period last year. The Net Loss for the year amounted to $6,438,120 ($0.04 per share) compared to $3,854,602 ($0.02 per share) for the same period last year. The total comprehensive loss for the year amounted to $6,434,487 compared to a comprehensive loss of $3,851,874 for last year. The significant components of the loss in the prior year, relates to the $2,718,970 for the Goodwill impairment for the U.S. Western operations and a write-down of the Deferred income tax assets in the amount of $336,275.

During this current quarter the Company continued to actively pursue its goal of improved financial and operational performance. "I am optimistic about the improving performance of the company as a result of our focusing on operating cost reduction and an emphasis on our higher growth business segments,” said Bertrand des Pallieres the Company’s Executive Chairman.

About Versatile

Versatile is a multi-disciplinary technology company with solutions across the mobile, digital signage, IT infrastructure, software and hardware landscape. The company’s products are utilized by Fortune 500 companies, leading financial institutions and large and small retail organizations. For more information, please visit 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.

Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. All amounts are expressed in U.S. dollars unless otherwise stated.