Vigil Health Solutions Inc.
TSX VENTURE : VGL

Vigil Health Solutions Inc.

June 20, 2011 14:51 ET

Vigil Health Solutions Reports Profitable 4th Quarter and 87% Reduction in Losses for Fiscal 2011

VICTORIA, BRITISH COLUMBIA--(Marketwire - June 20, 2011) - Vigil Health Solutions Inc. (TSX VENTURE:VGL) ("Vigil") announces the results of operations for the fiscal year and the fourth quarter, ending March 31, 2011.

Highlights

  • Profit of $109 thousand for the three month period ended March 31, 2011 compared to a loss of $236 thousand in the three month period ended March 31, 2010.
  • Reduced annual losses by 87% to $70 thousand for the year ended March 31, 2011 compared to $532 thousand for the previous year. (Achieved positive Adjusted EBITDA, a non-GAAP financial measure, of $16 thousand compared to a loss of $438 thousand in the year ended March 31, 2010.)
  • Increased revenue by 8% to $4.38 million in the year ended March 31, 2011 compared to $4.06 million in the prior year.
  • Grew service and maintenance revenue and one-off sales by 49% in the fiscal year to $1.23 million.
  • Reduced operating expenditures by 20% to $1.87 million from $2.34 million for the year ended March 31, 2010.
  • Released the Vitality Care System™, a new wireless monitoring system designed to appeal to the resident, the system features a new, discreet 'mini pendant' that takes advantage of new wireless standards to facilitate longer battery life and reliability in a compact design.

"We are pleased to have achieved profitability in both the third and fourth quarter of fiscal 2011. Similarly, the substantial reduction in losses seen year over year reflects our ability to maintain revenue levels and margins, while containing costs during the recession. I remain confident in the strong fundamentals of the senior living industry and believe demand will grow as the United States economy strengthens," stated Troy Griffiths, President and CEO of Vigil Health Solutions Inc.

Financial Results

Bookings for the year ended March 31, 2011 were $3.57 million compared to $3.18 million in the year ended March 31, 2010. Management believes that, while new construction activity is still at historically low levels, the 12% increase in bookings may be a reflection of the first signs of recovery in the US new senior housing market.

At March 31, 2011 Vigil had a backlog of approximately $1.43 million (including $521 thousand in deposits and progress billings, recorded as deferred revenue on the balance sheet) as compared to $2.78 million (including $1.28 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) at March 31, 2010.

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, 2011 was $4.38 million compared to $4.06 million in the year ended March 31, 2010, an increase of 8%. As mentioned above there can be a considerable lag between receipt of contracts (bookings) and revenue recognition. The increase in revenue is largely due to the completion, and related recognition of revenue, on the largest sale in the Company's history ($770 thousand, booked in fiscal 2010). In fiscal year ended March 31, 2011 the revenue from service and maintenance agreements and one-off sales grew by 49% to $1.23 million compared to $820 thousand in the year ended March 31, 2010.

The gross margin percentage for the year ended March 31, 2011 was 42% compared to 45% for the year ended March 31, 2010. Gross margins are in line with management's expectations of annual margins of between 42% and 47%.

Operating expenditures for the year ended March 31, 2011 were $1.87 million down 20% from operating expenditures of $2.34 million for the same period ended March 31, 2010. Reflecting the tight economic environment the Company decreased expenditures in all areas in fiscal 2011.

Losses for the year ended March 31, 2011 were $70 thousand, or $0.014 per share, compared to $532 thousand, or $0.106 per share, for the previous year. The 87% decrease in losses is primarily attributable to the 20% or $473 thousand decrease in operating expenses.

A summary of our financial performance for the year ended March 31, 2011 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. Financial information will be mailed to entitled security holders on June 30, 2011. Or, upon notice to the Company, entitled security holders may request a copy of financials in advance.

Summary Financial Information

Three months endedTwelve months ended
March 31,March 31,March 31,March 31,
2011201020112010
Revenue1,430,341803,2754,383,7914,057,172
Cost of sales833,357476,0922,521,1042,250,204
Gross Profit596,984327,1831,862,6871,806,968
Expenses463,476558,8501,866,6522,340,057
Income (Loss) before the following items133,507(231,667)(3,965)(533,089)
Other income (expense)24,760(4,115)(66,266)1,458
Income (Loss) for the period108,747(235,782)(70,231)(531,631)

Non-GAAP Measure

For the year ended March 31, 2011, we are disclosing Adjusted EBITDA, a non-GAAP financial measure, as a supplementary indicator of operating performance. We define Adjusted EBITDA as net income before, interest, income taxes, amortization, stock based compensation 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 EBITDA reconciliation

Three months endedTwelve months ended
March 31,March 31,March 31,March 31,
2011201020112010
Income/(loss) for the period$108,747(235,782)(70,231)(531,631)
Add/(deduct)
Foreign exchange gain (loss)10,872(6,937)28,42029,122
Derivative exchange gain---(33,483)
Interest7,1571,87037,8472,903
Stock based compensation4459,409(9,457)55,815
Amortization6,7329,18229,13039,278
25,20513,52485,94093,635
Adjusted EBITDA$133,952(222,258)15,709(437,996)

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 wireless development the Vitality Care 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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