VitalHub Corp. (the “Company” or “VitalHub”) (TSXV: VHI) announced
today it has filed its Interim Condensed Consolidated Financial
Statements and Management's Discussion and Analysis report for the
three and six months ended June 30, 2020 and 2019 with the Canadian
securities authorities. These documents may be viewed under the
Company's profile at www.sedar.com.
COMPANY HIGHLIGHTS
Net income (loss) for the three
months ended June 30, 2020 was $179,467 as compared to a loss of
($212,035) for the three months ended June 30, 2019, an increase of
$391,502 or 185% (an increase of $743,925 or 131% over the loss of
$564,458) for the three months ended March 31, 2020). Net income
(loss) for the six months ended June 30, 2020 was $($384,991) as
compared to ($150,488) for the six months ended June 30, 2019, a
decrease of $234,503 or 156%. The improvement in net income in the
quarter is a reflection of managements continued commitment to
reduce costs and gain synergies from integrating acquisitions.
EBITDA (defined as earnings before
interest, taxation, depreciation and amortization) for the
three months ended June 30, 2020 was $705,901 as compared to
$337,109 for the three months ended June 30, 2019, an increase of
$368,792 or 109% (an increase of $718,591 over the EBITDA loss of
($12,690) for the three months ended March 31, 2020). EBITDA for
the six months ended June 30, 2020 was $693,211 as compared to
$904,640 for the six months ended June 30, 2019. EBITDA is a
non-IFRS measure.
Adjusted EBITDA (defined as earnings
before interest, taxation, depreciation, amortization, share based
compensation, business acquisition, restructuring and integration
costs and other one-time costs) for the three months ended
June 30, 2020 was $754,262 as compared to $552,525 for the three
months ended June 30, 2019, an increase of $201,737 or 37% (an
increase of $471,971 or 167% over the Adjusted EBITDA of $282,291
for the three months ended March 31, 2020). Adjusted EBITDA for the
six months ended June 30, 2020 was $1,036,551 as compared to
$1,209,290 for the six months ended June 30, 2019. Adjusted EBITDA
is a non-IFRS measure.
Revenue for the three months
ended June 30, 2020 was $2,748,895 as compared to $2,827,291 for
the three months ended June 30, 2019, a decrease of $78,396 or 3%
(a decrease of $21,105 or 1% over the revenues of $2,770,000 for
the three months ended March 31,2020). Revenue for the six months
ended June 30, 2020 was $5,518,895 as compared to $5,271,602 for
the six months ended June 30, 2019, an increase of $247,293 or 5%.
The COVID-19 pandemic has affected revenues with hospitals shifting
their focus toward dealing with the virus vs new business, and the
additional effect of having been unable to perform any on premise
service work or audits.
The Company defines Annualized Contract
Value (“ACV”) of recurring revenue as the contracted annual
renewable software license fees and maintenance services.
The ACV of recurring revenue at June 30, 2020 was $7,491,841 as
compared to $5,321,119 at June 30, 2019, an increase of 29%. ACV at
March 31, 2020 was $7,486,925. ACV is a non-IFRS measure.
The Company defines acquisition
recurring revenues as gross recurring revenues of the companies
acquired at the time of acquisition and organic revenues as revenue
over and above the acquisition recurring revenues.
For the three and six months ended June 30, 2020, organic revenue
represented 57% and 46% of total revenue (2019 – 53% and 53%), with
the remaining 43% and 54% representing acquisition revenue (2019 –
47% and 47%). As compared to Q1 2020 organic revenue represented
36% of total revenue, with the remaining 64% representing
acquisition revenue. The continued mix of both organic and
acquisition revenues is a good indicator of the success of our
two-pronged growth strategy, targeting both organic growth and
growth through mergers and acquisitions. Acquisition and organic
revenue are non-IFRS measures.
Adjusted EBITDA as a percentage of
revenue for the three months ended June 30, 2020 was 27%
as compared to 20% for the three months ended June 30, 2019. EBITDA
as a percentage of revenue in Q1 2020 was 10%. Adjusted EBITDA as a
percentage of revenue for the six months ended June 30, 2020 was
19% as compared to 23% for the six months ended June 30, 2019. Due
to the relatively high amortization of intangibles from
acquisitions and periodic restructuring and integration costs from
acquisitions management believes that Adjusted EBITDA as a
percentage of revenue is a relevant KPI to measure. Adjusted EBITDA
as a percentage of revenue is a non-IFRS measure.
In the quarter as part of the Nova
Scotia Department of Services (DCS) contract the company recognized
a one-time Perpetual license of $150,000 to start the
creation of the MY Account external facing portal project. Upon
rollout of the customization of this module VitalHub will also be
charging recurring user-based fees in addition to the one-time
fees. The expected go live is scheduled to happen in 2021.
The Company sold its DOCit Solution to
the Corporation of the County of Lambton Long-Term Care
Services. The County of Lambton owns and operates 3
Long-Term Care Homes as well as two Adult Enrichment Centres The
County of Lambton will leverage the application’s multi-site
reporting capabilities allowing for organization wide trending,
multi-site data analytics and benchmarking.
The Company entered into a partnership
with UK-Based healthcare technology specialist Intouch with
Health. The partnership agreement will see Intouch patient
flow virtual management solutions and software combined with
VitalHub’s solutions and services to enable patient flow to be
managed from a patient’s hospital activities through to ongoing
support and care in the community.
When asked to comment on the results of Q2 2020,
VitalHub CEO Dan Matlow said, “As anticipated we saw a slowdown in
new sales as a result of the focus of our clients on the COVID-19
pandemic. The strong percentage of recurring revenue along with
implementation services allowed us to achieve revenues comparable
with the prior quarter and outperform our bottom-line expectations.
We are also starting to see the positive results of our acquisition
integration efforts from a cost-reduction perspective. This
combined with some government assistance programs has led to strong
earnings for the quarter. Moreover, we continue to progress and
advance our M&A strategy, which has become increasingly active
since the onset of the pandemic, amid a robust environment for
prospective acquisitions.
Our existing customers and future prospects are
getting back to refocusing on new initiatives as healthcare systems
around the world reopen with newfound experience and insight into
the importance and necessity of digital health solutions. We expect
to benefit from this as we move forward.”
ABOUT VITALHUB: VitalHub
develops mission-critical technology solutions for Health
and Human Services providers in the Mental Health
(Child through Adult), Long Term Care, Community Health
Service, Home Health, Social Service and Acute Care
sectors. VitalHub technologies include Blockchain,
Mobile, Patient Flow, Web-Based Assessment and Electronic
Health Record solutions. The Company has a robust two-pronged
growth strategy, targeting organic growth opportunities within its
product suite, and pursuing an aggressive M&A plan. Currently,
VitalHub serves 200+ clients across North America. VitalHub is
based in Toronto, Canada, with an offshore development hub in
Sri Lanka. The Company is publicly traded on the TSX
Venture Exchange under the symbol “VHI”.
CAUTIONARY STATEMENT:This press
release includes forward-looking statements regarding the
Corporation and its business, which may include, but is not limited
to, statements with respect to the appointment of a new directors.
Often, but not always, forward-looking statements can be identified
by the use of words such as "plans", "is expected", "expects",
"scheduled", "intends", "contemplates", "anticipates", "believes",
"proposes" or variations (including negative variations) of such
words and phrases, or state that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Such statements are based on the current expectations of
the management of each entity and are based on assumptions and
subject to risks and uncertainties. Although the management of each
entity believes that the assumptions underlying these statements
are reasonable, they may prove to be incorrect. The forward-looking
events and circumstances discussed in this release, may not occur
by certain specified dates or at all and could differ materially as
a result of known and unknown risk factors and uncertainties
affecting the companies, including risks regarding the technology
industry, failure to obtain regulatory or shareholder approvals,
market conditions, economic factors, the equity markets generally
and risks associated with growth and competition. Although the
Corporation has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results to differ from those
anticipated, estimated or intended. No forward-looking statement
can be guaranteed. Except as required by applicable securities
laws, forward-looking statements speak only as of the date on which
they are made and the Corporation undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events, or otherwise.
CONTACT INFORMATION
Dan MatlowChief Executive Officer, Director(416)
727-9061dan.matlow@vitalhub.com
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