Vigil Health Solutions Inc.

Vigil Health Solutions Inc.

August 16, 2012 17:25 ET

Vigil Health Solutions Reports Q1 Results

VICTORIA, BRITISH COLUMBIA--(Marketwire - Aug. 16, 2012) - Vigil Health Solutions Inc. ("Vigil") (TSX VENTURE:VGL) announces the results of operations for the quarter ending June 30, 2012.

Business Highlights

  • Grew bookings 18% to $1.01 million compared to $855 thousand in the three-month period ended June 30, 2011
  • Increased backlog to approximately $2.34 million (30 projects) compared to approximately $1.10 million (20 projects) in the three-month period ended June 30, 2011
  • Revenue down 34% to $673 thousand from $1.01 million in the three-months ended June 30, 2011
  • Reduced expenses by 25% to $393 from $524 thousand in the three-months ended June 30, 2011

"It is encouraging to see increased sales bookings again this quarter. Because of the timing of installations there can be a considerable lag between receipt of contracts and revenue recognition therefore we are still seeing lower revenue numbers. However, the higher backlog reflects the 30 projects sold but not yet commissioned," stated Troy Griffiths, President and CEO of Vigil Health Solutions Inc.

Financial Results

Revenue for the three-months ended June 30, 2012 was $673 thousand compared to $1.01 million in the three-month period ended June 30, 2011, a decrease of 34%. This is due to lower bookings in prior periods and a number of large projects in progress that take longer to complete. The greater number of projects in the installation phase is reflected in the increased backlog. (The Company's backlog includes all contracts signed including those in progress but not completed.) Project revenue made up 55% 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 $1.01 million up 18% compared to $855 thousand in the three-month period ended June 30, 2011. Management believes this is an indication of an improvement in the Senior Living industry.

At June 30, 2012 Vigil had a backlog of approximately $2.34 million (including $684 thousand in deposits and progress billings, recorded as deferred revenue on the balance sheet) a 113% increase compared to approximately $1.10 million (including $377 thousand in deposits and progress billings, recorded as deferred revenue on the balance sheet) at June 30, 2011. At June 30, 2012, Vigil's backlog included 30 projects at varying stages of installation and progress billing. The average project size was $78 thousand compared to 20 projects with an average value of $55 thousand in the three months ended June 30, 2011.

The gross margin percentage for the three months ended June 30, 2012 was 49% compared to 46% for the three months ended June 30, 2011. The higher proportion of one off sales to project sales increased the gross margin beyond management's usual expectations of margins of between 42% and 47%.

Expenditures for the three months ended June 30, 2012 were $393 thousand, down 25% from operating expenditures of $524 thousand for the period ended June 30, 2011. The decrease is primarily due to lower costs 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, 2012 was $61 thousand, or $0.005 per share compared to a loss of $56 thousand, or $0.007 per share for the previous year. The small increase in losses is primarily attributable to the lower number of project installations completed in the quarter and therefore lower revenue.

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

Financial information will be mailed to entitled security holders on August 24, 2012. Or, upon notice to the Company, entitled security holders may request a copy of financials in advance.

Summary Financial Information

June 30, June 30,
2012 2011
(unaudited) (unaudited)
Revenue $ 673,228 $ 1,013,174
Cost of sales 341,916 542,140
331,312 471,034
Expenses 392,905 524,044
Income before the following items (61,593) (53,010)
Other income (expense): 296 (2,684)
Income / (loss) for the period $ (61,297) $ (55,694)

Non-IFRS Measure

For the three months ended June 30, 2012, 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,
June 30,
Income / (loss) for the period $ (61,297) $ (55,694)
Add / (deduct)
Foreign exchange gain (loss) 17,823 5,269
Derivative exchange gain (loss) (13,500) -
Interest (4,027) (7,953)
Stock based compensation (711) (2,506)
Amortization (4,417) (6,350)
(4,832) (11,540)
Adjusted EBITDA $ (56,465) $ (44,154)

Share Based Awards

The Board granted an aggregate amount of 764,000 stock options pursuant to Vigil's Omnibus Share Compensation Plan and subject to approval by the TSX Venture Exchange. Of the total, 140,000 options were granted to Directors, these vest 25% on grant and 25% every six months following, a further 480,000 were granted to Officers of the Company, these vest over a 4-year period, in equal quarterly instalments, starting 12 months from issue. The remaining 144,000 options were granted to employees under the same vesting terms as the Officers of the Company. These options are exercisable at a price of $0.14 per share and expire August 15, 2017.

Further, the Board granted 160,000 deferred stock units (DSUs) pursuant to Vigil's Omnibus Share Compensation Plan to the Directors of Vigil subject to the approval of the TSX Venture Exchange. The DSUs vest in four equal instalments every six months commencing on the grant date and only become exercisable upon ceasing to be a Director of Vigil or, upon a change of control. Each DSU may be settled for one common share, the cash equivalent, or a combination of both. Directors receive no cash or other compensation for their services as a Director outside of the grant of DSUs and options.

After the addition of these options and the DSUs, the Company has an aggregate of 1,156,300 options and stock units outstanding representing 8.87% of shares issued.

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. Vigil's objective is to offer solutions for the full continuum of care. Vigil's product range includes the innovative wireless Vitality Care System™ featuring discreet 'mini pendants', a nurse call system, mobile fall, incontinence monitoring, resident check and the award-winning Vigil Dementia System.

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 2012 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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