Vigil Health Solutions Inc.

Vigil Health Solutions Inc.

September 14, 2011 17:15 ET

Vigil Health Solutions Reports Q1 Results: Revenue Up 58%

VICTORIA, BRITISH COLUMBIA--(Marketwire - Sept. 14, 2011) - Vigil Health Solutions Inc. ("Vigil") (TSX VENTURE:VGL) announces the results of operations for the quarter ending June 30, 2011.

Business Highlights

  • Increased revenue 58% to $1.01 million from $641 thousand in the three-months ended June 30, 2010.

  • Bookings for the quarter were $855 thousand down 10% compared to $955 thousand in the three-month period ended June 30, 2010.

  • Reduced losses by 69% to $56 thousand for the year ended March 31, 2011 compared to $180 thousand for the previous year

  • Released the Vitality Care System™. Designed to appeal to the resident, the hybrid wireless/hardwired call system features a new, discreet 'mini pendant'.

  • Closed a non-brokered private placement financing for gross proceeds of $520,000. The net proceeds of the private placement are planned to be used to fund further development of Vigil's products, for working capital and for general corporate practices.

"We continued to see improvements in our revenue levels reflecting the improved bookings seen in the last fiscal year. We are now looking to see a consistent and sustained improvement in the availability of financing for senior housing in the United States to facilitate improved bookings going forward," stated Troy Griffiths, President and CEO of Vigil Health Solutions Inc.

Financial Results

Unless otherwise indicated, all financial information presented in this press release has been prepared in accordance with International Financial Reporting Standards ("IFRS"). The conversion to IFRS from Canadian generally accepted accounting principles became effective on or after January 1, 2011. Please refer to the Company's most recently issued financial statements for further discussion.

Revenue for the three-months ended June 30, 2011 was $1.01 million compared to $641 thousand in the three-month period ended June 30, 2010, an increase of 58%. The increase in revenue is due to low revenues in the prior quarter reflecting the US economic downturn. Project revenue made up 68% 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.

Bookings for the quarter were $855 thousand down 10% compared to $955 thousand in the three-month period ended June 30, 2010. Management believes the decline is a timing and construction cycle issue as the senior living market appears to be showing signs of recovery. In the prior fiscal period bookings were feeling pressure from the recession however there were still some projects that had received financing prior to the credit crunch. In the quarter ended June 30, 2011 the availability of financing had improved however many of the projects have not yet moved to the construction phase when they would normally be expected to purchase nurse call technology.

At June 30, 2011 Vigil had a backlog of approximately $1.10 million (including $377 thousand in deposits and progress billings, recorded as deferred revenue on the balance sheet) a 64% decrease compared to approximately $3.10 million (including $1.64 million in deposits and progress billings, recorded as deferred revenue on the balance sheet) at June 30, 2010. During the period, Vigil's backlog included 20 projects at varying stages of installation and progress billing. The average project size was $55 thousand compared to $111 thousand in the three months ended June 30, 2010. In the prior fiscal the Company had one very large project worth approximately $750 thousand that caused a higher than usual average value.

The gross margin percentage for the three months ended June 30, 2010 was 46% compared to 45% for the three months ended June 30, 2010. The gross margin during the period was within management's expectations of margins of between 42% and 47%.

Expenditures for the three months ended June 30, 2010 were $524 thousand, up 11% from operating expenditures of $473 thousand for the period ended June 30, 2010. The increase is primarily due to lower costs in the prior period reflecting the reduced work week in effect and higher levels of reimbursement received from the government for specific research and development projects.

Net loss for the three month period ended June 30, 2011 was $56 thousand, or $0.010 per share compared to a loss of $180 thousand, or $0.036 per share for the previous year. The decrease in losses is primarily attributable to the increase in revenue in the period.

Detailed financial statements along with Management Discussion and Analysis have been filed with SEDAR (

Financial information will be mailed to entitled security holders on September 16, 2011. Or, upon notice to the Company, entitled security holders may request a copy of financials in advance.

Summary Financial Information

June 30, June 30,
2011 2010
(unaudited) (unaudited)
Revenue $ 1,013,174 $ 641,420
Cost of sales 542,140 355,705
471,034 285,715
Expenses 524,044 472,943
Income before the following items (53,010 ) (187,228 )
Other income (expense): (2,684 ) 6,983
Income / (loss) for the period $ (55,694 ) $ (180,245 )

Non-IFRS Measure

For the three months ended June 30, 2011, we are disclosing Adjusted EBITDA, a non-IFRS 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-IFRS 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-IFRS measure, may not be comparable to other companies and it is not intended as a substitute for IFRS measures.

Adjusted EBITDA Reconciliation

Three months ended
June 30, 2011 June 30, 2010
Income / (loss) for the period $ (55,694 ) $ (180,245 )
Add / (deduct)
Foreign exchange gain (loss) 5,269 15,382
Derivative exchange gain - (7,883 )
Interest (7,953 ) (516 )
Stock based compensation (2,506 ) (10,420 )
Amortization (6,350 ) (7,825 )
(11,540 ) (11,262 )
Adjusted EBITDA $ (44,154 ) $ (168,983 )

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 2011 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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