Healthscreen Solutions Inc.
TSX VENTURE : MDU

Healthscreen Solutions Inc.

February 11, 2011 12:25 ET

Healthscreen Reports Fourth Quarter and Fiscal Year 2010 Results

Annual Revenue Increases by 15%; Second Consecutive Year of Positive EBITDA

TORONTO, ONTARIO--(Marketwire - Feb. 11, 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 fiscal 2010 year end financial results.

Financial Highlights    
     
Annual – FY10 to FY09   Quarter – Q410 to Q409
     
Increase from $13.0m to $15.0m Revenue Decrease to $2.9 from $3.4m
     
Positive at $0.1m, down from $1.2m EBITDA Decrease to ($1.6m) from $0.4m
     
Increase to ($3.2m) from ($1.7m) Net Loss Increase to ($2.4) from ($0.9m)

"Healthscreen continues to build a strong business achieving another record year of sales and generating positive EBITDA for the second consecutive year. We are pleased with the operating results as well as the significant investments in our technology platform. We have seen our EMR market share more than double this year and expect to increase our growth throughout fiscal 2011 with a goal of being the number one provider of EMR software in Ontario," commented Justin Belobaba, President and CEO, Healthscreen.

On a segmented basis, revenue generated by the Physician Services business unit for the year ended September 30, 2010 was $9,602,684 compared to $8,059,208 for the prior year, representing an increase of $1,543,476 or 19%. For the fourth quarter of 2010 revenue was $1,929,865 compared to the fourth quarter of 2009 of $2,110,257, a decrease of 9%. The increase in annual revenue is attributed primarily to DIAMOND services with the Company's partner Physiomed Health Inc.

Revenue generated by the Software and Hardware Products business unit for the year ended September 30, 2010 was $5,383,368 compared to $4,965,227 in the 2009 fiscal year, reflecting an increase of $418,141 or 8%. For the fourth quarter of 2010 revenue was $920,548, a decrease of $356,029 or 28% compared to the fourth quarter of 2009. The annual growth is attributable to increased sales of the EMR software platform (HSPRactice product) which qualified for government funding by the doctors who purchased this platform.

Total gross profit for fiscal 2010 was 67% of revenue compared to 82% in fiscal 2009. The impact on margin is from higher costs associated with the increased DIAMOND revenue which generates higher revenues but at a lower gross profit level.

Selling, general and administrative plus operating expenses together totaled $9,975,121 or 67% of total revenue, including a one-time break fee of $650,000, compared to the prior year total expenses of $9,456,408 or 73% of total revenue. Excluding the one-time item, the decrease in total expenses is a result of cost savings realized from staff reductions which took place towards the end of the prior fiscal year.

For the second consecutive year the Company generated a positive EBITDA of $73,981 for 2010 compared to $1,175,235 in 2009. In the fourth quarter of 2010, the Company reported an operating loss of $1,587,798.

The net result of the above, including non-cash items such as amortization and stock-compensation as well as interest costs, resulted in a net loss for the year of $3,170,638 compared to a net loss of $1,722,462 in the prior year.

The cash balance as at September 30, 2010 was $1,649,620 compared to $1,287,969 at September 30, 2009. Cash was supported by the private placement and shareholder loans both during the third quarter of fiscal 2010. These funds were also used to bridge the difference between cash generated from operations and funds reinvested in the Company's infrastructure and software platform.

The Company was not in compliance with certain of its covenants at September 30, 2010. The Company expects that through normal operating activities this situation will be resolved by the end of the first quarter of fiscal 2011. 

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.

2011 Outlook

Looking into 2011, the Company continues to be focused on similar goals as for 2010, specifically:

  • Continue to focus on increasing EBITDA and become cash flow positive from the core business
  • Exceed growth momentum compared to the growth experienced in FY2010 either through organic growth or through acquisition
  • Continue to invest in technology to meet industry requirements as well as enhance doctor experience and satisfaction with the HSPractice platform

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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