Vigil Health Solutions Inc.
TSX VENTURE : VGL

Vigil Health Solutions Inc.

February 21, 2011 12:23 ET

Vigil Health Solutions Reports Profitable Quarter

VICTORIA, BRITISH COLUMBIA--(Marketwire - Feb. 21, 2011) - Vigil Health Solutions Inc. ("Vigil") (TSX VENTURE:VGL) announces the results of operations for the quarter ending December 31, 2010.

Business highlights

  • Profit of $24 thousand compared to a loss of $222 thousand in the period ended December 31, 2010.
  • Increased revenue 63% to $1.13 million from $695 thousand in the three-months ended December 31, 2009.
  • Achieved positive Adjusted EBITDA, a non-GAAP financial measure, of $68 thousand (or $0.014 per share) compared to a loss of $219 thousand in the period ended December 31, 2009.
  • Grew bookings 28% to $913 thousand from $712 thousand in the three-month period ended December 31, 2009.

"We are pleased the Company achieved profitability given the still challenging economic climate. We are encouraged to see improvements in the overall economy, and hope that we will see positive change in seniors housing lending and the United States housing market as we believe this will stimulate renewed growth in senior housing construction," stated Troy Griffiths, President and CEO of Vigil Health Solutions Inc.

Financial Results

Revenue for the three-months ended December 31, 2010 was $1.13 million compared to $695 thousand in the three-month period ended December 31, 2009. Project revenue made up 73% 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, sensors and communication equipment and were up 30% over the same period in fiscal 2010. Bookings for the quarter were $913 thousand up 28% compared to $712 thousand in the three-month period ended December 31, 2009. Sales continue to be affected by the lack of credit available to new construction in the seniors housing market; however, bookings in the first three quarters are showing improvement from those seen in the latter part of fiscal year ended March 31, 2010.

At December 31, 2010, Vigil had a backlog of approximately $2.36 million (including $1.20 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) a 25% decrease compared to approximately $3.16 million (including $1.4 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) at December 31, 2009. This decrease reflects the greater number of projects completed and recognized in revenue than new sales booked in the quarter.

The gross margin percentage for the three months ended December 31, 2010 was 46% compared to 42% for the three months ended December 31, 2009. The gross margin during the period was within management's expectations of margins of between 42% and 47%.

Expenditures for the three months ended December 31, 2010 were $468 thousand down 14% from operating expenditures of $543 thousand for the same period ended December 31, 2009. The Company reduced expenditures in all areas however these decreases were primarily the result of lower professional fees and government funding received for specific research and development projects.

Net income for the three month period ended December 31, 2010 was $24 thousand, or $0.005 per share compared to a loss of $222 thousand, or $0.044 per share for the previous year. The combination of increased revenue, improved margins and the decrease in expenses resulted in the profitable quarter.

Detailed financial statements along with Management Discussion and Analysis have been filed with SEDAR and may be viewed at www.sedar.com.

Financial information will be mailed to entitled security holders on February 25, 2011. Or, upon notice to the Company, entitled security holders may request a copy of financials in advance.

Summary Financial Information    
  Dec 31, Dec 31,
  2010 2009
  (unaudited) (unaudited)
     
Revenue $   1,133,230 $     695,179
Cost of sales 611,470 401,137
  521,760 294,042
     
Expenses 467,806 543,472
     
Income (loss) before the following items 53,953 (249,430)
     
Other income (expense): (29,557) 27,023
     
Income / (loss) for the period $       24,396 $   (222,407)

Non-GAAP Measure

For the three months ended December 31, 2010, 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 ended 
  Dec 31, 2010 Dec 31, 2009
     
Income / (loss) for the period $      24,396 $   (222,407)
Add / (deduct)    
  Foreign exchange gain (loss) 13,667 (28,178)
  Interest 15,890 1,155
  Stock based compensation 7,145 23,364
  Amortization 7,263 7,252
  43,965 3,593
     
Adjusted EBITDA $      68,361 $   (218,814)

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 2010 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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