Dan Matlow reports
VITALHUB REPORTS POSITIVE EARNINGS IN Q1 2019
Vitalhub Corp. has filed its interim condensed consolidated financial statements and management discussion and analysis report for the quarter ended March 31, 2019, with the Canadian securities authorities. These documents may be viewed under the company's profile on SEDAR.
When asked to comment on the results of Q1 2019, Vitalhub chief executive officer Dan Matlow said: "With our Q1 results, we are beginning to see some of the synergistic effects of our acquisition and organic growth strategy, as demonstrated by improvements across many key financial indicators, particularly in achieving positive earnings this quarter. While we are showing an increase in professional services revenue, we have yet to recognize the recurring licensing revenue from our key provincial agreement with Nova Scotia, which will start on the go-live of phase 1 of the project. We are excited to approach the second half of 2019 as we continue along our positive growth trajectory and toward building shareholder value."
Revenue for the three months ended March 31, 2019, was $2,444,310, as compared with $2,923,466 in the same period last year (includes a one-time perpetual licence fee of $1,613,362), $2,215,911 in Q4 2018 (a 10.3-per-cent increase) and $2,118,093 in Q3 2018.
Net income for the three months ended March 31, 2019, was $61,545, as compared with $6,350 in the same quarter last year, negative $112,574 in Q4 2018 and negative $293,434 in Q3 2018.
EBITDA (defined as earnings before interest, taxation, depreciation and amortization) for the three months ended March 31, 2019, was $558,036, compared with EBITDA of $381,628 in the same period last year, $333,195 in Q4 2018 and $155,794 in Q3 2018. EBITDA is a non-IFRS (international financial reporting standards) measure.
Adjusted EBITDA (defined as earnings before interest, taxation, depreciation, amortization and share-based compensation) for the three months ended March 31, 2019, was $647,270, compared with adjusted EBITDA of $750,876 in the same period last year, $441,355 in Q4 2018 and $296,403 in Q3 2018. Adjusted EBITDA is a non-IFRS measure.
The company defines annualized contract value (ACV) of recurring revenue as the contracted annual renewable software licence fees and maintenance services. The ACV of recurring revenue at March 31, 2019, was $5,226,623, as compared with $4,486,680 at Dec. 31, 2018, an increase of 14 per cent. ACV is a non-IFRS measure.
The company defines acquisition revenue as gross revenues of the company at the time of acquisition and organic revenue as revenue over and above the acquisition revenues. For the three months ended March 31, 2019, organic revenue represented 35 per cent of total revenue (Q1 2018: 1 per cent; Q4 2018: 29 per cent), with the remaining 65 per cent representing acquisition revenue (Q1 2018: 43 per cent, which includes a one-time perpetual licence that represents 56 per cent of gross revenues; Q4 2018: 71 per cent). Acquisition revenue and organic revenue are non-IFRS measures.
On Jan. 18, 2019, the company completed a non-brokered private placement of units with the former founders and management team of Aastra Technologies Ltd. The offering was completed at a price of 16 cents per unit for gross proceeds of $3.3-million and a total of 20,625,000 units issued.
The company sold both its Treat and B Care solutions to the government of Yukon Health and Social Services (H&SS). The government of Yukon's initial commitment includes a three-year term with an option to extend the size and scope of usage. Treat and B Care are being licensed as a hosted service (software as a service). Vitalhub is anticipating revenue during the initial term of approximately $500,000.
On March 20, 2019, the company completed its fifth acquisition. The company purchased all of the assets of the Oak Group, which included all of the issued and outstanding share capital in the Oak Group's wholly owned subsidiary, The Oak Group (U.K.) Ltd. The Oak Group is a software and service provider of its proprietary Making Care Appropriate for Patients (MCAP) system; was ranked first (based on combined quality and value scores) on the NHS England framework; and is licensed on more United Kingdom health care beds than any other product of its class.
The company licensed its newly acquired MCAP software to Hamad Medical Corp. (HMC) in Qatar to support the implementation of Qatar's national continuing care strategy.
The company signed a contract to provide its Treat solution to the Hawskesbury and District General Hospital as part of the regionalized expansion of the Treat EHR through Ottawa Hospital; 15 organizations are now eligible to sign a participation agreement allowing them to license the Treat software.
Vitalhub develops and supports mission-critical health care information systems in the mental health (child, youth and adult), long-term care, community health service, home health and hospital sectors. Vitalhub technologies include blockchain, mobile, and Web-based assessment and EHR (electronic helath record) solutions.
Currently, Vitalhub serves over 200 clients across North America. Vitalhub is based in Toronto, Canada, with an offshore development hub in Sri Lanka.
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