Vigil Health Solutions Inc.
TSX VENTURE : VGL

Vigil Health Solutions Inc.

November 16, 2009 13:33 ET

Vigil Health Solutions Reports Second Quarter Results

Sales Bookings up 17%, Revenue up 16% over Q2FYE09

VICTORIA, BRITISH COLUMBIA--(Marketwire - Nov. 16, 2009) – Vigil Health Solutions Inc. ("Vigil") (TSX VENTURE:VGL) announces the results of operations for the quarter ending September 30, 2009.

Business highlights

  • Increased sales bookings 17% over Q2FYE09 to $1.36 million
  • Grew revenue 16% over Q2FYE09 to $1.19 million in Q2FYE10
  • Signed $770 thousand contract with corporate client, the largest deal in Company history
  • Added a new corporate client bringing the total number of corporate clients to 19
  • Reduced Adjusted Operating Loss by 95% to $20 thousand (compared to $428 thousand for the six months ended September 30, 2008)

"The two summer months of the second quarter saw slower than historical activity for the Company. Despite this, we had a very strong September and grew revenue and sales bookings in the quarter," stated Troy Griffiths, President and CEO of Vigil Health Solutions Inc. "While the economic conditions are only beginning to recover, I do believe we are benefiting from not only the general improvements in the economy but also the strength of the senior living sector as compared to other industries."

Financial Results

Bookings for the quarter were $1.36 million up 17% compared to $1.16 million in Q2FYE09. The increase in bookings is largely attributable to the large contract signed in September.

At September 30, 2009, Vigil had a backlog of approximately $3.18 million (including $1.15 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) a 23% decrease compared to approximately $4.14 million (including $1.75 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) at September 30, 2008. The decline is the result of more revenue being recorded than sales booked fiscal year to date. As well, with the current market conditions supporting more retrofit business over new construction there is a shorter installation cycle, which contributes to a lower backlog.

Revenue for Q2FYE10 was $1.19 million compared to $1.03 million in Q2FYE09, an increase of 16%. The increase in revenue reflects the larger size of the projects being completed. The average project size this quarter was $96 thousand compared to $65 thousand in the Q2FYE09. 10 projects were completed in Q2FYE10 compared to 14 in Q2FYE09. Project revenue made up 81% 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.

The gross margin percentage for Q2FYE10 was 44% compared to 43% for Q2FYE09. The gross margin is in line with management's expectations of annual margins of between 42% and 47%.

Operating expenses for Q2FYE10 were $607 thousand, up 4% from $585 thousand in the same quarter of the prior year. The increase relates to greater sales and marketing expenditures for trade shows, higher research and development investment and additional professional fees. The latter included higher legal and consulting expenses including negotiating sales contracts, exploring strategic opportunities and expenditures surrounding the Company's annual general and special meeting.

Losses for Q2FYE10 were $139 thousand, or $0.001 per share compared to a loss of $144 thousand, or $0.001 per share for the same period in the previous year. The decrease in losses reflects the increase in revenue, solid margins and stable expenses.

Detailed financial statements along with Management Discussion and Analysis have been filed with SEDAR and may be viewed on the Company web site (http://www.vigil.com/investors/financial-statements/) or at (www.sedar.com).

Financial information will be mailed to entitled security holders on November 20, 2009. Or, upon notice to the Company, entitled security holders may request a copy of financials in advance.

Summary Financial Information

 Three months endedSix months ended
 September 30,September 30,September 30,September 30,
 2009200820092008
Revenue$1,188,5611,032,7752,558,7181,733,318
Cost of sales 664,524590,2261,372,975962,096
  524,037442,5491,185,743771,222
      
Expenses: 606,572584,8261,205,7101,199,142
      
Loss before the following items (82,535)(142,277)(19,967)(427,920)
      
Other income (expense) (56,675)(1,823)(53,476)(4,311)
      
Loss for the period$(139,210)(144,100)(73,443)(432,231)

 

Non-GAAP Measure

For the six-months ended September 30, 2009, we are disclosing Adjusted Operating Loss, 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 Loss reconciliation

 Six months ended 
 September 30, 2009 September 30, 2008 
Loss for the period$(73,443)(432,231)
      
Add / (deduct)     
 Foreign exchange gain (loss) 78,717 (20,036)
 Derivative exchange gain (loss) (47,963)- 
 Interest (535)(8,081)
 Amortization 23,257 32,428 
  53476 4,311 
      
Adjusted Operating Loss$(19,967)(427,920)

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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