Healthscreen Solutions Inc.
TSX VENTURE : MDU

Healthscreen Solutions Inc.

February 28, 2011 15:00 ET

Healthscreen Reports First Quarter 2011 Financial Results

TORONTO, ONTARIO--(Marketwire - Feb. 28, 2011) - Healthscreen Solutions Inc. ("Healthscreen") (TSX VENTURE:MDU), Canada's premier provider of physician practice enhancement services and electronic medical record ("EMR") software, today announced its first quarter 2011 financial results.

 Q1 2011 Financial Highlights 
   
 Revenue Increase from $4.1m to $4.3m
   
 EBITDA Decrease from $0.2m to$0.1m
   
 Net Loss Increase from ($0.6) to ($0.8m)
   
 Cash Increase of $0.1m during the quarter

"This first quarter of fiscal 2011 was the highest quarterly revenue generated by Healthscreen in its history. The Company continues to build upon its solid revenue base and consistently adds doctors to our growing customer list. I believe this is the start of sustained growth for the Company as we strive towards positive cash flow and net income generation for Healthscreen," commented Justin Belobaba, President and CEO, Healthscreen.

Revenue generated by the Physician Services business segment was $2,408,656 plus revenue generated from the Software and Hardware Products business segment was $1,861,257 for total revenue for the first quarter of 2011 of $4,269,913. In the fiscal 2010 first quarter revenue generated by the Physician Services business segment was $2,507,175 plus revenue generated from the Software and Hardware Products business segment was $1,548,305 for total revenue of $4,055,480. Overall revenue in the first quarter of 2011 increased by 5% or $214,433 compared to the first quarter of 2010.

The decrease in quarterly revenue for the Physician Services business segment of $98,519 reflects a change in the delivery and billing method of services from one-time up front fees to a longer term recurring revenue stream.

The increase in the Software and Hardware Products business segment of $312,952 reflects continued growth in sales of the EMR software platform (HSPRactice product) which qualified for funding by the doctors who purchased this platform under Ontario government EMR initiatives.

Total gross profit for the three months ended December 31, 2010 is 65% compared to 71% for the three months ended December 31, 2009. The impact on margin is from a change in product mix during the quarter.

Total selling, general and administrative plus operating expenses for the first quarter of fiscal 2011 were $2,673,389 or 63% of revenue. For the first quarter of the prior year, total selling, general and administrative plus operating expenses were $2,707,450 or 67% of revenue. The net change in expenses relates primarily to higher labour costs necessary to support the increased Software and Hardware Products business segment as well as the inclusion of software development costs expensed in the quarter.

As a result of the above, the Company generated a positive EBITDA of $91,530 for the quarter compared to $168,526 for the prior year first quarter. 

Including all non-cash items such as amortization and stock-compensation as well as interest costs resulted in a net loss for the first quarter of fiscal 2011 of $761,306 compared to a net loss of $585,541 in the prior year first quarter.

The cash balance as at December 31, 2010 was $1,758,008 up from the cash balance of $1,649,620 as at September 30, 2010. The Company was not in compliance with certain of its covenants at December 31, 2010. 

Complete financial statements and the Management Discussion and Analysis and Financial Statements for the 2010 fiscal year are available on the Company's website at www.healthscreen.com and www.sedar.com.

About Healthscreen Solutions Inc.:

Healthscreen Solutions Inc. (www.healthscreen.com) provides a comprehensive suite of practice enhancing products and services to increase physician productivity and revenue while reducing costs and improving patient care. The Company's portfolio includes billing and scheduling software, electronic medical records software, CallerMD which assists physicians in managing a range of uninsured medical services, PrevCareMD which helps physicians earn supplemental income by achieving government-set preventive care targets and HealthAlert which allows physicians to help their patients in managing complex healthcare issues. Healthscreen's services and software are used by over 5,000 full-time physicians who are responsible for the health care of more than five million Canadians.

© 2011 Healthscreen Solutions Inc. All Rights Reserved.

Disclaimer: Forward Looking Statements

This press release contains information that is forward looking information with respect to Healthscreen within the meaning of Section 138.4(9) of the Ontario Securities Act and other applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar expressions concerning matters that are not historical facts. In particular, statements about future revenues or profitability, including the estimated timing of profitability, and any other statements regarding Healthscreen's future expectations, beliefs, goals or prospects are or involve forward-looking information.

Forward-looking information is based on certain factors and assumptions. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking information, by its nature necessarily involves risks and uncertainties, including risks and uncertainties relating to government regulation and funding in the healthcare industry, financial and capital market risks, technology development and adoption, Healthscreen's ability to maintain its competitive position and effectively implement it's acquisition strategy, liability for software malfunction, management of growth, and length of sales cycles. Additional risks and uncertainties affecting Healthscreen can be found in Healthscreen's 2010 Annual Report and Management's Discussion and Analysis for the Fiscal Year ended September 30, 2010 filed on SEDAR at www.sedar.com. If any of these risks or uncertainties were to materialize or if the factors and assumptions underlying the forward-looking information were to prove incorrect, actual results could vary materially from those that are expressed or implied by the forward-looking information contained herein. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Trading in the securities of Healthscreen should be considered highly speculative.

The TSX Venture Exchange has in no way approved nor disapproved the contents of this news release.

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