VIQ Solutions Reports Fourth Quarter and 2010 Results

MARKHAM, ONTARIO--(Marketwire - April 13, 2011) - VIQ Solutions Inc. ("VIQ Solutions" or the "Corporation") (TSX VENTURE:VQS), a world leader in computer-based digital audio and video capture and management, today reported its financial results for the three and twelve month periods ended December 31, 2010.

"In 2010, we invested heavily in future growth and achieved several key strategic accomplishments," commented David Outhwaite, President and Chief Executive Office of VIQ Solutions. "Because of the foundation laid in 2010, we enter 2011 with a solid sales pipeline, a reputation as the global leader in digital media capture and management, and the partners and capital in place to convert those elements into a solid financial performance."

Annual Results

Revenue was $12.2 million for the year ended December 31, 2010 as compared to $11.3 million for the previous year, representing an increase of 8%. Gross profit for 2010 was $4.3 million as compared to $4.6 million in 2009, representing a decrease of 7%. Gross profit expressed as a percentage of revenues was 35% as compared to 40% in 2009, in part due to one-time start up costs associated with the commencement of new contracts in Australia. Net loss for the year was $2,805,546 or $0.03 per share as compared to $972,824 or $0.01 per share for the previous year. The net loss for the year includes a $1,020,000 goodwill impairment charge relating to the Corporation's Australian transcription business, Spark & Cannon, as a result of weakened market conditions for the reporting unit.

Fourth Quarter Results

Revenues increased from $2.9 million in the fourth quarter of 2009 to $3.3 million in the fourth quarter of 2010 primarily due to an increase in revenue for the transcription business. Gross margin for the quarter was relatively unchanged at 37% as compared to 38% for the fourth quarter of 2009. Selling and administrative expenses were $1.5 million in 2010 as compared to $1.2 million for the same period in 2009. The goodwill impairment charge for the three month period ended December 31, 2010 was $1,020,000 as compared to nil for the same period in 2009. Net loss was $1,506,163 for the three month period ended December 31, 2010 as compared to $324,126 for the three month period ended December 31, 2009. Cash used in operations was $369,605 for the fourth quarter of 2010 as compared to $306,979 for the same period in 2009.

2010 Business Highlights

• Signed a five year non-exclusive Software Licensing Agreement with Cisco Systems, Inc. in October 2010 for the licensing and integration of VIQ's Encompass RPC product suite into Cisco's product portfolio worldwide;
• Released the latest version of our Encompass RPC suite, an innovative digital media capture and management platform that offers secure remote processing control and seamless integration with third-party digital video and content management providers;
• Signed a four year Professional Services Subcontract Agreement (Global) with Cisco in August 2010 for professional services in connection with Cisco's Connected Justice product release; and
• Successfully completed the early stage implementation roll-out of 118 installations of our multi-year digital audio recording and storage project in the United Kingdom with Atos Origin and Logica and subsequent to the period, announced the commencement of the national roll-out of 536 installations in 2011.

Additional Information

Detailed financial information and Management's Discussion and Analysis of Results and Financial Condition for the year ended December 31, 2010 will be posted on VIQ Solution's website (under Investor Relations) at www.viqsolutions.com and on SEDAR's website at www.sedar.com. The financial information included in this release is qualified in its entirety and should be read together with the audited consolidated financial statements for the year ended December 31, 2010, including the notes thereto.

About VIQ Solutions Inc.

VIQ Solutions is a global leader in computer-based digital audio and video capture and management. We develop software solutions that capture, digitize, and compress audio and video data, which is securely stored in a multi-tiered server system where it is easily searchable and shareable. Our innovative media processor technology allows users to remotely control audio-video capture in multiple locations from a single satellite location, allowing large-scale and complex installations to be managed efficiently by fewer resources. VIQ Solutions' technologies are installed in courts, legislative assemblies, law enforcement and hearing rooms around the world.

Forward-looking Statements

This release contains forward-looking statements and other statements concerning the Corporation's objectives and strategies and management's beliefs, plans and intentions about our achievements, goals, performance and other future events. These statements involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this press release, the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "will," "would" and similar expressions are intended to identify forward-looking statements. Such statements reflect VIQ Solutions' current views with respect to future events and are subject to such risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made due to a number of factors including risks related to our ability to successfully execute our business plan which includes our revenue growth, our liquidity, our operating results, our technology and products. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. VIQ Solutions does not intend and does not assume any obligation to update these forward-looking statements.