VIQ Solutions Inc.
TSX VENTURE : VQS

VIQ Solutions Inc.

May 27, 2016 07:28 ET

VIQ Solutions Reports First Quarter 2016 Results

MARKHAM, ONTARIO--(Marketwired - May 27, 2016) - VIQ Solutions Inc. ("VIQ Solutions" or the "Company") (TSX VENTURE:VQS), a global expert in secure digital media technology and services, today reported its financial results for the three month period ended March 31, 2016. Results are reported in Canadian dollars and are prepared in accordance with International Financial Reporting Standards ("IFRS").

VIQ's computer products and services division had another profitable quarter with revenues growing almost 40% over the same period in 2015. This revenue growth resulted from increases in both new software sales and significant growth in the Company's recurring revenue from support contracts and SaaS customers. Recurring income will continue to boost revenue for the remainder of 2016. The Company also won new customer contracts in the law enforcement and medical markets as VIQ continues to shift away from sole reliance on traditional justice markets toward increasing revenue in new business sectors, including law enforcement and medical.

"Q1 marks a second consecutive profitable quarter for our high margin software and maintenance division. We expect this positive trend to continue for the duration of 2016 as we attract new customers and expand service offerings to our global customer base," said Sebastien Paré, President and CEO of VIQ Solutions. "It is a positive signal that we continue to balance our market mix. We are definitely moving beyond our historical reliance on courts into attractive high growth markets while continuing important expansion in our recurring revenue stream."

Spark & Cannon, the Company's Australia based transcription and technology subsidiary, experienced anticipated and typical summer holiday business slowdown in the first quarter.

"The first quarter was as expected, following historical seasonal experience," said Mr. Paré. "We are confident Spark & Cannon's revenue will return to normal levels, as is customary, over the rest of the year."

The Q1 results were partially offset by foreign exchange loss from strengthening of the Canadian dollar against the US dollar and the British pound, which was larger than previous quarters. Stock based compensation expenses were higher than the same period last year as VIQ's share price increased in 2016.

Significant growth was experienced despite these quarterly losses in 2016 as compared with 2015.

The Company's cash balances remained strong at $1.2M, almost double the cash position for the same period in 2015. During the quarter, VIQ made early repayment on a significant portion of outstanding debt, demonstrating the Company's confidence in its cash position and reinforcing the commitment to be debt free in 2016.

"VIQ is in a strong position at the end of Q1, with the anticipated slow season behind us and healthy cash reserves on hand to continue our planned growth," said Mr. Paré. "We continued making strategic investments in Q1 to support increased activity in our global sales pipeline. We expect these new opportunities will convert into tangible revenue growth as the year progresses."

Q1 2016 Business Highlights

  • Grew software and maintenance revenue by almost 40% compared to Q1 2015, an increase of more than $250,000, through added recurring Dataworxs SSM contracts and increased software sales in new markets including law enforcement and medical.
  • Achieved a second consecutive quarter of profitability in software sales and support with a profit of over $100,000 for the period.
  • Announced early repayment of a significant portion of debt, demonstrating the Company's commitment to become debt free in 2016.
  • Announced reseller agreement with globally respected Nuance Communications for Dragon Medical speech recognition technology in Australia, allowing seamless integration of Nuance's capabilities into the VIQ Dataworxs workflow.
  • Introduced new highly skilled sales resource in rapidly expanding Europe, Middle East and Africa ("EMEA") to close and manage expanding pipeline opportunities in the region.
  • Announced two new software wins in law enforcement in North America, demonstrating the continuing trend among law enforcement agencies toward strengthening their cybersecurity and operational effectiveness by better utilizing digital assets. VIQ has established its global reputation in this important business sector.
  • Awarded new contracts in multiple sectors attracting customers from competitor products as the superiority of VIQ's platform gained increased market recognition.
  • Awarded, subsequent to the period, an NAB Best of Show award with PESA for the PESA ACES CCM solution, an affordable, multi-channel capture and playback system for synchronized live event recording and playback.
  • Announced two contract expansions, subsequent to the period, with enterprise customers in Scotland and Zimbabwe, adding to VIQ's reputation as the global leader for the large scale secure capture and management of critical digital audio and video evidence

Financial Results for Q1 2016

The unaudited first quarter 2016 condensed consolidated interim financial statements and results of operations and Management's Discussion and Analysis of Results and Financial Condition for the three month period ended March 31, 2016 will be posted on the SEDAR website at www.sedar.com. The financial information included in this news release is qualified in its entirety and should be read together with the audited consolidated financial statements for the year ended December 31, 2015, including the notes thereto.

About VIQ Solutions Inc.

VIQ Solutions is the leading technology and service platform provider for digital evidence capture, retrieval and content management. Our secure modular software allows customers to easily integrate the VIQ platform at any stage of their organization's digitization, from the capture of digital content from video and audio devices through to online collaboration, mobility, data analytics and integration with sensors, facial recognition, speech recognition and case management or patient record systems. VIQ's technology leads the industry in security, meeting the highest international standards for digital/cyber security and privacy, including military and medical regulations.

Our solutions are in use in over 20 countries with tens of thousands of users in over 200 government and private agencies including law enforcement, immigration, medical, legal, insurance, courts, and transportation and transcription services. VIQ also provides end to end transcription services to several large government agencies through our Australia-based reporting and transcription partners. VIQ operates worldwide with a network of partners including security integrators, audio-video specialists, and hardware and data storage suppliers. Managing digital media evidence is what we do, and we do it better than anyone else. For more information about VIQ Solutions, please visit www.viqsolutions.com.

Forward-Looking Statements

Certain statements included in this news release constitute forward looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information in this news release include, but are not limited to, management's targets for the Company's growth in 2016.

Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although VIQ Solutions believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because VIQ Solutions can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this news release, assumptions have been made regarding, among other things, the Company's recent initiatives, and that sales and prospects may provide incremental value for shareholders. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.

Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by VIQ Solutions and described in the forward-looking statements or information. These risks and uncertainties may cause actual results to differ materially from the forward-looking statements or information. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information