Vigil Health Solutions Inc.
TSX VENTURE : VGL

Vigil Health Solutions Inc.

June 21, 2010 12:25 ET

Vigil Health Solutions Reports 4th Quarter and Annual Results

VICTORIA, BRITISH COLUMBIA--(Marketwire - June 21, 2010) - Vigil Health Solutions Inc. ("Vigil") (TSX VENTURE:VGN) announces the results of operations for the fiscal year (FY10) and the fourth quarter, ending March 31, 2010.
Highlights

  • Revenue was $4.06 million compared to $4.51 million in the prior year, a decrease of 10%.
  • Grew service and maintenance revenue and one-off sales by 33% in the fiscal year to $823 thousand.
  • Increased gross margin percentage to 45% compared to 43% for the year ended March 31, 2009.
  • Reduced operating expenditures by 5% to $2.34 million from $2.45 million for the year ended March 31, 2009. 
  • Signed $770 thousand contract with a leading North American provider the largest system implementation in Vigil's history.
  • Product and Feature Releases:
    • Deployed the first installation of the Vigil Link which aggregates communications from wireless devices in remote or difficult to access locations of a seniors housing campus and communicates this to the Vigil central platform via internet protocol.
    • Completed advanced wireless testing device to further facilitate large, accelerated wireless solution deployments.
    • Released the Vigil Network Manager allowing implementation of widely distributed or very large campuses in a scalable and flexible way.

"The last year has been a difficult one for the Company, the Senior Living industry and the global economy as a whole. The greatest indicator in our industry can be seen in the lack of financings closed in 2009 and the corresponding dearth of new senior living projects. I believe that the underlying fundamentals of the industry are strong. I am optimistic that as the economy improves senior living should follow suit," stated Troy Griffiths, President & CEO, Vigil Health Solutions.

Financial Results

Bookings for the year ended March 31, 2010 were $3.18 million compared to $4.45 million in the year ended March 31, 2009. Management believes the decrease in bookings is the direct result of the significant downturn in the US (and global) economy and the associated lack of funding for the development of new senior housing projects.

At March 31, 2010 Vigil had a backlog of approximately $2.78 million (including $1.28 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) as compared to $3.56 million (including $1.65 million in deposits and progress payments, recorded as deferred revenue on the balance sheet) at March 31, 2009.

Vigil records revenue under the completed contract method of revenue recognition. The timing of the installation of the technology is often dependent on facility construction schedules, which can result in a considerable lag between receipt of contracts and revenue recognition. The Company's backlog includes all contracts signed including those in progress but not completed.

Revenue for the year ended March 31, 2010 was $4.06 million compared to $4.51 million in the year ended March 31, 2009, a decrease of 10%. As mentioned above there can be a considerable lag between receipt of contracts (bookings) and revenue recognition. The decrease in revenue reflects the impact to the senior living industry due to the economic downturn. Project revenue made up 78% 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 and were up 33% over fiscal 2009.

The gross margin percentage for the year ended March 31, 2010 was 45% compared to 43% for the year ended March 31, 2009. Gross margins are in line with management's expectations of annual margins of between 42% and 47%.

Operating Expenses for FY10 were $2.34 million, down 5% from $2.45 million in the prior year. The Company experienced minimal increases in sales and marketing expenditures, research and development expenditures and professional fees but saw a material decrease in general and administration expenditures. The decrease in general and administration expenditures can be primarily attributed to a decrease in insurance costs from the company securing a new liability insurance provider and reduced payroll costs resulting from the restructuring of certain departments.

Losses for the year ended March 31, 2010 were $532 thousand, or $0.005 per share, compared to $389 thousand, or $0.004 per share, for the previous year. The 37% increase in losses is primarily attributable to the decrease in revenue.

A summary of our financial performance for the year ended March 31, 2010 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 24, 2010. 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-10   31-Mar-09     31-Mar-10   31-Mar-09  
                   
Revenue $ 803,275   $ 1,525,444     $ 4,057,172   $ 4,505,500  
                           
Cost of sales $ 476,092   $ 914,047     $ 2,250,204   $ 2,523,734  
                           
Gross Profit $ 327,182   $ 611,397     $ 1,806,968   $ 1,981,766  
                           
                           
Expenses $ 558,850   $ 605,117     $ 2,340,057   $ 2,452,100  
                           
Income (Loss )before the following items $ (231,668 ) $ 6,280     $ (533,089 ) $ (470,334 )
                           
Other income (expense) $ (4,115 ) $ (29,864 )   $ 1,458   $ 81,394  
                           
Loss for the period $ (235,782 ) $ (23,584 )   $ (531,631 ) $ (388,940 )

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

Adjusted Operating Income                  
  Three Months Ended     Twelve Months Ended  
                   
  31-Mar-10   31-Mar-09     31-Mar-10   31-Mar-09  
                   
Loss for period $ (235,782 ) $ (23,584 )   $ (531,631 ) $ (388,940 )
                           
Add / (deduct)                          
  Foreign exchange gain (loss)   6,937     22,030       (29,122 )   103,601  
  Derivative exchange loss   -     (31,427 )     33,483     (33,483 )
  Interest   (1,870 )   (2,366 )     (2,903 )   11,276  
  Amortization   (9,182 )   (18,101 )     (39,278 )   (67,793 )
  $ (4,115 ) $ (29,864 )   $ (37,820 ) $ 13,601  
                           
Adjusted Operating Income $ (231,667 ) $ 6,280     $ (493,811 ) $ (402,541 )

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 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. 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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