Vigil Health Solutions Inc.
TSX VENTURE : VGL

Vigil Health Solutions Inc.

June 22, 2009 13:40 ET

Vigil Health Solutions Reports 4th Quarter and Annual Results

Revenue $4.51 million up 50% over FY08; Two Consecutive Quarters of Positive Adjusted Operating Income

VICTORIA, BRITISH COLUMBIA--(Marketwire - June 22, 2009) - Vigil Health Solutions Inc. (TSX VENTURE:VGL) ("Vigil") announces the results of operations for the fiscal year (FY09) and the fourth quarter (Q4FY09), ending March 31, 2009.

"We are pleased to report positive Adjusted Operating Income in each of the last two quarters of the fiscal year.  We are also happy to report strong revenue growth again this year especially given the weak state of the economy in Canada and the USA.  These results underscore the strength of our business model which serves the growing community of senior citizens which will continue to expand steadily over the long term,"  stated Troy Griffiths, President & CEO, Vigil Health Solutions.

Business highlights

  • Increased revenue 50% to $4.51 million from $3.00 million in FY08 and a 92% increase in revenue for Q4FY09 compared to Q4FY08
  • Secured two consecutive quarters of positive Adjusted Operating Income in Q3 and Q4
  • Achieved positive cash from operating activities for the current fiscal year.
  • Completed 50 projects in FY09 compared to 34 in FY08, an increase of 47%
  • Product and Feature Releases:
    • New wireless products and processes to improve efficiency and quality of installations as well as subsequent service and support particularly in large multi-storey facilities.
    • Developed new products to meet state and regional requirements including hardwired multicoloured corridor lights previously only available for the wireless system and a duty station device with audible notification.
    • Improved Vigil Remote to include compatibility with Microsoft Terminal Server enabling integration with customer's existing information technology configurations.
    • Latest software release, Vigil Locate, displays the location of select devices in a graphical/map format developed to facilitate improved customer response times.

Financial Results

Bookings for FY09 were solid at $4.38 million compared to $4.38 million in FY08.  Sales bookings for the quarter were also solid at $1.14 million compared to $1.12 million in the Q4FY08.  Management believes the overall flat bookings are the result of the significant downturn in the US (and global) economy most notably during the last two quarters of the fiscal year.  This macro-economic situation has resulted in a lack of funding for the development of new senior housing projects.

At March 31, 2009 Vigil had a backlog of approximately $3.56 million (including $1.65 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) as compared to $3.45 million (including $1.12 million in deposits and progress payments, recorded as deferred revenue on the balance sheet) at March 31, 2008.

Revenue for FY09 was $4.51 million compared to $3.00 million in FY08, an increase of 50%. This revenue resulted from the commissioning of 50 projects in fiscal 2009 (compared to 34 in fiscal 2008).  The increase in revenue reflects the growth in sales bookings seen in prior periods. In addition, one off sales, and service and maintenance revenue grew by 41% to $612 thousand. Revenue for Q4FY09 was $1.53 million compared to $796 thousand in Q4FY08.  The 93% increase in revenue in the quarter was primarily attributable to an increase in the average value of the installations, from $66 thousand to $96 thousand and the completion of 14 installations in Q4FY09 compared to 10 in Q4FY08.

The gross margin percentage for FY09 was 43% compared to 45% for FY08, in line with management's expectations of annual margins of between 42% and 47%.  Gross margin for the fourth quarter was below expectations at 40% compared to 39% in Q4FY08, due to a number of large installations completed for corporate clients where the product mix resulted in a lower margin.

Expenses for FY09 were $2.38 million, up 6% from $2.22 million in the prior year.  The increase can be primarily attributed to increased general and administration costs including insurance costs, payroll, and telephone costs, all in support of the Company's growth.  Expenses were $605 thousand in the fourth quarter, down 10% compared to $669 thousand in the prior year.  This decline relates primarily to a decrease in sales and marketing expenses from $254 thousand in the last quarter of fiscal 2008 to $206 thousand in the last quarter of fiscal 2009.  This was mainly due to lower fiscal year end commission bonus payments to the sales department in fiscal 2009 compared to fiscal 2008, along with decreased advertising and marketing and market research expenses.

The net loss for FY09 was $389 thousand, or $0.004 per share, compared to $973 thousand, or $0.011 per share, for the previous year.  The 60% decrease in losses is primarily attributable to the increase in revenue and maintaining stable operating expenses.  The increase in revenue and reduced expenses resulted in a 93% decrease in losses in the fourth quarter (from $331 thousand for Q4FY08 to $24 thousand in Q4FY09).

A summary of our financial performance for the year ended March 31, 2009 follows below. For further information relating to the financial results of the Company, please refer to the Company's financial statements and MD&A filed on SEDAR at www.sedar.com or detailed financial statements available on the Vigil web site (http://www.vigil.com/?Investors:Financial_Statements).  Financial information will be mailed to entitled security holders on June 30, 2009. Or, upon notice to the Company, entitled security holders may request a copy of financials in advance.


Summary Financial Information

   

Three Months Ended

     

Twelve Months Ended

 
                           
   

31-Mar-09

    31-Mar-08       31-Mar-09     31-Mar-08  
                           
Revenue $ 1,525,444   $ 795,576     $ 4,505,500   $ 3,004,552  
                           
Cost of sales $ 914,047   $ 484,549     $ 2,523,734   $ 1,658,077  
                           
Gross Profit $ 611,397   $ 311,027     $ 1,981,766   $ 1,346,475  
                           
Expenses $ 605,117   $ 669,138     $ 2,384,307   $ 2,224,246  
                           
Profit/loss before the following items $ 6,280   $ (358,111 )   $ (402,541 ) $ (877,771 )
                           
Other income (expense): $ (29,865 ) $ 26,914     $ 13,602   $ (95,680 )
                           
Loss for the period $ (23,584 ) $ (331,197 )   $ (388,939 ) $ (973,451 )
                           

Non-GAAP Measure

For the year ended March 31, 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 and it is not intended as a substitute for GAAP measures.


Adjusted Operating Income reconciliation

   

Three Months Ended

     

Twelve Months Ended

 
                           
    31-Mar-09     31-Mar-08       31-Mar-09     31-Mar-08  
                           
Loss for the period $     (23,584 ) $   (331,197 )   $   (388,940 ) $   (973,451 )
                           
Add / (deduct)                          
  Foreign exchange gain (loss)   (9,397 )   37,222       70,118     (63,526 )
  Interest   (2,366 )   4,791       11,276     24,187  
  Amortization   (18,101 )   (15,099 )     (67,793 )   (56,341 )
  $     (29,865 ) $      26,914     $      13,601   $     (95,680 )
                           
  Operating Income $        6,280   $   (358,111 )   $   (402,541 ) $   (877,771 )

About Vigil Health Solutions Inc.

Vigil offers a proprietary technology platform combining software and hardware to provide comprehensive solutions to the expanding aged care 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 mayaffect our actual results, performance, achievements or developments are manyand include, amongst others, our ability to develop our sales force andgenerate revenue, the length of the sales cycle, management of the Company'sgrowth, ability to recruit and retain staff, fluctuations in demand for currentand future products, our ability to develop, manufacture, supply and marketexisting and new products that meet the needs of customers, volatility in theexchange rate, ability to secure financing, ability to secure product liabilityinsurance, the continuous commitment of our customers, increased competition,changes in regulation and reliance on third party suppliers. These risk factorsand others are discussed in the Risks and Uncertainties section of ourManagement Discussion and Analysis.  Many of these factors and uncertaintiesare beyond the control of the Company. Consequently, all forward-lookingstatements in this news release are qualified by this cautionary statement andthere can be no assurance that actual results, performance, achievements ordevelopments anticipated by the Company will be realized.

Forward-looking statements are based onmanagement's current plans, estimates, projections, beliefs and opinions and,except as required by law, the Company does not undertake any obligation toupdate forward-looking statements should the assumptions related to theseplans, 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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