VIQ Solutions Inc.
TSX VENTURE : VQS

VIQ Solutions Inc.

June 21, 2011 17:30 ET

VIQ Solutions Reports Profitable First Quarter 2011 Results

MARKHAM, ONTARIO--(Marketwire - June 21, 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 month period ended March 31, 2011. Results are reported in Canadian dollars and are prepared in accordance with International Financial Reporting Standards ("IFRS")1.

"We are very pleased with our financial results this quarter, achieving the largest quarterly profit in VIQ Solutions' history," commented David Outhwaite, President and Chief Executive Officer of VIQ Solutions. "We are very well positioned for the balance of 2011 and beyond with an unprecedented 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."

First Quarter Results

Revenue was $4.4 million for the three month period ended March 31, 2011 as compared to $2.8 million for the three month period ended March 31, 2010, representing an increase in revenue of $1.6 million or 58%. Revenue from the Corporation's technology business unit was significantly higher as compared to the same three month period from the previous year as the Corporation earned revenue in the quarter of approximately $1.5 million in connection with the commencement of the national roll-out of the project in the United Kingdom. Gross profit for the three month period ended March 31, 2011 was $2.5 million as compared to $0.9 million for the three month period ended March 31, 2010. Gross profit expressed as a percentage of revenues was 58% as compared to 33% for the same period in 2010, due to our revenue mix being more heavily weighted from the sale of our software products and services which typically have significantly higher margins than our transcription businesses. Net income for the period was $930,829 or $0.01 per share as compared to a net loss of $445,597 or $0.01 per share for the three month period ended March 31, 2010. EBITDA2 was approximately $1.0 million for the three month period ended March 31, 2011 as compared to an EBITDA loss of approximately $346,000 for the same period in 2010.

First Quarter 2011 Business Highlights
  • Achieved significantly improved financial results for the quarter with over $1.0 million of positive EBITDA and net income of approximately $931,000;

  • Finalized a private placement for 4,065,000 units (the "Units") of the Corporation at a price of $0.50 per Unit for aggregate gross proceeds of $2,032,500 which allowed us to repay certain short-term debt and strengthen the Corporation's balance sheet; and

  • Commenced the national roll-out of 536 installations of our multi-year digital audio recording and storage project in the United Kingdom with Atos Origin and Logica.

Notes
  1. Effective January 1, 2011, Canadian publicly listed entities are required to prepare their financial statements in accordance with IFRS. Due to the requirement to present comparative financial information, the effective transition date is January 1, 2010. The three months ended March 31, 2011 is VIQ Solutions' first reporting period under IFRS. Please refer to VIQ Solutions' First Quarter 2011 Management Discussion and Analysis for a summary of the full impact as a result of the conversion from Canadian generally accepted accounting principles to IFRS.

  2. EBITDA is a non-IFRS earnings measure which does not have any standardized meaning prescribed by IFRS and therefore may not be comparable to EBITDA presented by other companies. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. This measure is important to management since it is used by potential investors to evaluate the Corporation's operating performance and ability to incur and service debt, and as a valuation metric. Investors are cautioned that this non-IFRS financial measure should not be construed as an alternative to other measures of financial performance calculated in accordance with IFRS.

Additional Information

Detailed financial information and Management's Discussion and Analysis of Results and Financial Condition for the three month period ended March 31, 2011 will be posted on VIQ Solutions' 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.

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