Vigil Health Solutions Inc.

Vigil Health Solutions Inc.

August 10, 2009 10:21 ET

Vigil Health Solutions Achieves Second Profitable Quarter

Revenue up 95% over Q1FYE09

VICTORIA, BRITISH COLUMBIA--(Marketwire - Aug. 10, 2009) - Vigil Health Solutions Inc. ("Vigil") (TSX VENTURE:VGL) announces the results of operations for the quarter ending June 30, 2009.

"The company has continued to grow revenue and achieve profitability during the current challenging economic times. We are encouraged to see some improvements in the overall economy, specifically in lending for seniors housing and correspondingly anticipate renewed growth in the new construction segment of this market," stated Troy Griffiths, President and CEO of Vigil Health Solutions Inc. "Moreover, we have continued investing in sales and marketing, as well as new product development to position the company to best serve the built up demand in the industry as more new projects come on line."

Business highlights

- Income of $66 thousand in Q1FYE10 compared to a loss of $288 thousand in Q1FYE09

- 95% growth in revenue over Q1FYE09 to $1.37 million in Q1FYE10

- Third consecutive quarter of positive Adjusted Operating Income of $63 thousand

- Achieved gross margin of 48% for the quarter compared to 47% in Q1FYE09

Financial Results

Revenue for Q1FYE10 was $1.37 million compared to $701 thousand in Q1FYE09, an increase of 95%. There were 11 projects completed in the quarter compared to 8 in Q1FYE09.

Bookings for the quarter were $755 thousand, down 35% compared to $1.16 million in Q1FYE09. The decrease in bookings relates to a significant portion of new construction business in the United States being put on hold due to the current recession and credit crunch. This is validated by the fact that 72% of project bookings this quarter were retrofits.

At June 30, 2009, Vigil had a backlog of approximately $2.72 million (including $1.34 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) as compared to approximately $3.97 million (including $1.66 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) at June 30, 2008.

The gross margin percentage for Q1FYE10 was 48% compared to 47% for Q1FYE09. The gross margin was slightly higher than management's expectations of annual margins of between 42% and 47%. This was due to the product mix of the projects completed this quarter.

Operating expenses for Q1FYE10 were $599 thousand, down 2% from $614 thousand in the same quarter of the prior year. The decrease relates mainly to government funding received for salaries relating to a specific research project.

Income for Q1FYE10 was $66 thousand, or $0.001 per share compared to a loss of $288 thousand, or $0.003 per share for the same quarter in the previous year. The income reflects the large increase in revenue, strong margins, stable expenses and the Company's ability to minimize the impact of foreign exchange fluctuations.

Detailed financial statements along with Management Discussion and Analysis have been filed with SEDAR and may be viewed on the Company web site ( or at (

Financial information will be mailed to entitled security holders on August 14, 2009. Or, upon notice to the Company, entitled security holders may request a copy of financials in advance.

Summary Financial Information

June 30, June 30,
2009 2008
(unaudited) (unaudited)

Revenue $ 1,370,157 $ 700,543
Cost of sales 708,450 371,870
661,707 328,673

Expenses 614,315 599,138

Income before the following items 62,569 (285,642)

Other income (expense): 3,199 (2,489)

Income / (loss) for the period $ 65,768 $ (288,131)

Non-GAAP Measure

For the three months ended June 30, 2009, we are disclosing Adjusted Operating Income, a non-GAAP financial measure, as a supplementary indicator of operating performance. We define Adjusted Operating Income as net income before, interest, income taxes, amortization, and currency gains or losses including derivative foreign exchange differences. We are presenting the non-GAAP 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-GAAP measure, may not be comparable to other companies and it is not intended as a substitute for GAAP measures.

Adjusted Operating Income reconciliation

Three months ended
June 30, 2009 June 30, 2008

Income / (loss) for the period $ 65,768 $ (288,131)

Add / (deduct)
Foreign exchange gain (loss) (40,477) $ 8,064
Derivative exchange gain 55,212 -
Interest 1,446 4,316
Amortization (12,982) (14,869)
3,199 (2,489)

Adjusted Operating Income / (Loss) $ 62,569 $ (285,642)

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. The Vigil Integrated Care Management System™ (Vigil® System) includes the award-winning Vigil Dementia System, a nurse call system, bed monitoring, resident check in, and the latest development the Vigil Wireless call system. The first to supply dementia specific care technology, Vigil facilitates the highest standard of care for cognitive residents while helping dementia residents enjoy a higher quality of life and greater dignity.

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 2008 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.

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