Vigil Health Solutions Reports Profitable Second Quarter

Marketwired

VICTORIA, BRITISH COLUMBIA--(Marketwired - Nov 18, 2013) - Vigil Health Solutions Inc. (TSX VENTURE:VGL) ("Vigil") announces the results of operations for the quarter ending September 30, 2013.

Business Highlights

  • Revenue grew 59% to $1.31 million from $826 thousand in the three-month period ended September 30, 2012
  • Net Income of $22 thousand compared to $32 thousand in the three month period ended September 30, 2012.
  • Bookings for the quarter were $1.12 million down 12% compared to $1.27 million in the three-month period ended September 30, 2012. (Bookings year to date were up 19% at $2.72 million.)
  • Increased backlog to approximately $3.26 million compared to approximately $2.72 million in the three-month period ended September 30, 2012.

"We are pleased to see another profitable quarter and steady sales bookings. Vigil has focused on serving large multi-site corporate clients by providing solutions for the full continuum of care. Corporate customers continued to provide repeat business with a total of 8 new contracts signed by existing clients in the quarter. Vigil also started 6 new projects in the quarter for a recently acquired corporate client," stated Troy Griffiths, President and CEO of Vigil Health Solutions Inc.

Financial Results

Revenue for the three-months ended September 30, 2013 was $1.31 million compared to $826 thousand in the three-month period ended September 30, 2012, an increase of 59%. Project revenue made up 65% of total revenue; the remaining revenue came from follow on sales to existing customers. These sales include service and maintenance billings and replacement products including wireless devices and communication equipment.

Bookings for the quarter were $1.12 million down 12% compared to $1.27 million in the three-month period ended September 30, 2012. Management believes this is due in part to timing following the record bookings ($1.60 million) in the first quarter of fiscal 2014. (Bookings year to date were up 19% at $2.72 million.)

At September 30, 2013 Vigil had a backlog of approximately $3.26 million (including $1.45 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) a 20% increase compared to approximately $2.72 million (including $836 thousand in deposits and progress billings, recorded as deferred revenue on the balance sheet) at September 30, 2012. At September 30, 2013, Vigil's backlog included 38 projects at varying stages of installation and progress billing with an average project size of $86 thousand. This was up slightly from the 37 projects with an average value of $74 thousand at September 30, 2012. Projects can include individual buildings or floors of multiple phase campus construction.

The gross margin percentage for the three months ended September 30, 2013 was 45% compared to 49% for the three months ended September 30, 2012. Gross margin was within management's usual expectations of margins of between 42% and 47%. Margins have been higher in previous quarters due to a large number of one off sales, which usually have better margins due to the lower labour component. There were also a number of projects in the current quarter that included subcontractor labour which is usually lower margin.

Expenditures for the three months ended September 30, 2013 were $577 thousand, up 59% from $363 thousand for the period ended September 30, 2012. The increase is primarily due to increased compensation costs reflecting higher staffing levels. Staffing is now back to normal levels similar to those seen prior to the recession.

Net income for the three month period ended September 30, 2013 was $22 thousand, or $0.001 per share compared to income of $32 thousand, or $0.002 per share for the previous year. The profitable quarter follows an increase in all operating costs as staffing levels and related expenses return to normal levels. The decline in profitability relates to the small decrease in gross margin year over year as well as the increase in operating costs.

Detailed financial statements along with Management Discussion and Analysis have been filed with SEDAR (www.sedar.com).

Financial information will be mailed to entitled security holders on November 29, 2013. Or, upon notice to the Company, entitled security holders may request a copy of financials in advance.

Summary Financial Information

Three months ended Six months ended
September 30, September 30, September 30, September 30,
2013 2012 2013 2012
Revenue $ 1,310,206 826,434 2,204,103 1,499,662
Cost of sales 720,909 423,838 1,144,007 765,754
589,297 402,596 1,060,096 733,908
Expenses 577,227 363,070 1,040,657 755,975
Income (loss) before the following items 12,070 39,526 19,439 (22,067 )
Other income (expense) 9,475 (7,362 ) 22,607 (7,066 )
Income / (loss) for the period $ 21,545 32,164 42,046 (29,133 )

Non-IFRS Measure

For the three months ended September 30, 2013, we are disclosing Adjusted EBITDA, a non-IFRS financial measure, as a supplementary indicator of operating performance. We define Adjusted EBITDA as net income before, interest, income taxes, amortization, stock based compensation and currency gains or losses including derivative foreign exchange differences. We are presenting the non-IFRS financial measure in our filings because we use it internally to make strategic decisions, forecast future results and to evaluate our performance and because we believe that our current and potential investors and analysts use the measure to assess current and future operating results and to make investment decisions. It is a non-IFRS measure, may not be comparable to other companies and it is not intended as a substitute for IFRS measures.

Three months ended Six months ended
September 30, September 30, September 30, September 30,
2013 2012 2013 2012
Income / (loss) for the period $ 21,545 32,164 42,046 (29,133 )
Add / (deduct)
Foreign exchange (2,695 ) 11,062 (19,473 ) (6,671 )
Derivative exchange (6,890 ) (7,858 ) (3,989 ) 5,642
Interest 110 4,158 855 8,185
Stock based compensation 24,645 12,643 34,622 13,354
Amortization 4,162 3,812 7,666 8,229
19,332 23,817 19,681 28,649
Adjusted EBITDA $ 40,877 55,981 61,727 (484 )

About Vigil Health Solutions Inc.

Vigil offers a proprietary technology platform combining software and hardware to provide comprehensive solutions to the expanding seniors' housing market. Vigil has established a growing presence in North America and an international reputation for being on the leading edge of systems design and integration. Vigil's objective is to offer solutions for the full continuum of care. Vigil's product range includes the innovative wireless Vitality Care System™ featuring discreet 'mini pendants', a nurse call system, mobile fall, incontinence monitoring, resident check and the award-winning Vigil Dementia System.

Certain statements contained in this news release that are not based on historical facts may constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). These forward-looking statements are not promises or guarantees of future performance but are only predictions that relate to future events, conditions or circumstances or our future results, performance, achievements or developments and are subject to substantial known and unknown risks, assumptions, uncertainties and other factors that could cause our actual results, performance, achievements or developments in our business or in our industry to differ materially from those expressed, anticipated or implied by such forward-looking statements.

Forward-looking statements include all financial guidance, disclosure regarding possible events, conditions, circumstances or results of operations that are based on assumptions about future economic conditions, courses of action and other future events. We caution you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. These forward-looking statements appear in a number of different places in this presentation and can be identified by words such as "may", "estimates", "projects", "expects", "intends", "believes", "plans", "anticipates", or their negatives or other comparable words. Forward-looking statements include statements regarding the outlook for our future operations, plans and timing for the introduction or enhancement of our services and products, statements concerning strategies or developments, statements about future market conditions, supply conditions, end customer demand conditions, channel inventory and sell through, revenue, gross margin, operating expenses, profits, forecasts of future costs and expenditures, the outcome of legal proceedings, and other expectations, intentions and plans that are not historical fact.

The risk factors and uncertainties that may affect our actual results, performance, achievements or developments are many and include, amongst others, our ability to develop our sales force and generate revenue, the length of the sales cycle, management of the Company's growth, ability to recruit and retain staff, fluctuations in demand for current and future products, our ability to develop, manufacture, supply and market existing and new products that meet the needs of customers, volatility in the exchange rate, ability to secure financing, ability to secure product liability insurance, the continuous commitment of our customers, increased competition, changes in regulation and reliance on third party suppliers. These risk factors and others are discussed in the Risks and Uncertainties section of our "Management Discussion and Analysis" segment of our fiscal 2013 Annual Report. Many of these factors and uncertainties are beyond the control of the Company. Consequently, all forward-looking statements in this news release are qualified by this cautionary statement and there can be no assurance that actual results, performance, achievements or developments anticipated by the Company will be realized.

Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions and, except as required by law, the Company does not undertake any obligation to update forward-looking statements should the assumptions related to these plans, estimates, projections, beliefs and opinions change.

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

Contact:
Vigil Health Solutions Inc.
Troy Griffiths
President and CEO
(250) 383-6900
(250) 383-6999
information@vigil.com
Vigil Health Solutions Inc.
2102-4464 Markham Street
Victoria, BC
V8Z 7X8
www.vigil.com

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