Mr. Dan Matlow reports
VITALHUB REPORTS CONTINUED POSITIVE EARNINGS IN Q2 2019
Vitalhub Corp. has filed its interim condensed consolidated financial statements and management's discussion and analysis report for the quarter ended June 30, 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 Q2 2019, Vitalhub chief executive officer Dan Matlow said: "We continue to make progress quarter over quarter in all areas of our business and continue to be optimistic on a go-forward basis, as we offer the following insight to help guide our investors at this time.
"Due to the high amount of non-cash items on the company's income statement relating to the amortization of intangibles from acquisitions, we focus primarily on adjusted EBITDA to track our performance. We have made great progress here, with adjusted EBITDA representing 23 per cent of revenues for the period ended June 30, 2019. Adjusted EBITDA is a non-IFRS measure.
"Our annual contract value (ACV) has grown to $5,321,119, which has not yet been materially affected by the Nova Scotia contract revenue, which has the potential to grow to $2.3-million in ACV. Revenue associated with this contract has primarily been comprised of professional services to date and has only accounted for 2 per cent or $125,450 of the total ACV currently reported. Our expectation is for the Nova Scotia ACV to progressively increase starting in Q4 of this year. (For further details on the Nova Scotia contract, refer to the original press release dated Jan. 7, 2019.) ACV is a non-IFRS measure.
"Recurring revenue continues to grow and now represents 46.5 per cent of total revenue for the quarter. Recurring revenue is a non-IFRS measure.
"While M&A is an important part of our growth strategy, the company continues to grow organically with 44 per cent of revenue representing organic growth for the quarter.
"The Oak Group acquisition completed in March, 2019, and in particular its MCAP product represents an opportunity for growth internationally. We continue to see pipeline growth on an international basis.
"The company has been gradually increasing our cash reserves and at the end of Q2 had $4,860,083 of cash."
Revenue for the for the three months ended June 30, 2019, was $2,827,291 as compared with $1,856,446 for the three months ended June 30, 2018, an increase of $970,845 or 52.3 per cent (an increase of $382,981 or 15.7 per cent over the three months ended March 31, 2019). Revenue for the six months ended June 30, 2019, was $5,271,602 as compared with $4,779,836 (which includes a one-time perpetual licence fee of $1,613,362) for the six months ended June 30, 2018, an increase of $491,776 or 10.3 per cent.
EBITDA (defined as earnings before interest, taxation, depreciation and amortization) for the three months ended June 30, 2019, was $337,108 as compared with negative $33,212 for the three months ended June 30, 2018, an increase of $370,320. EBITDA for the six months ended June 30, 2019, was $904,640 as compared with $348,515 for the six months ended June 30, 2018, an increase of $556,125. EBITDA is a non-IFRS (international financial reporting standards) measure.
Adjusted EBITDA (defined as earnings before interest, taxation, depreciation, amortization, share-based compensation and acquisition-related expenses) for the three months ended June 30, 2019, was $552,524 as compared with $20,693 for the three months ended June 30, 2018, an increase of $531,831. Adjusted EBITDA for the six months ended June 30, 2019, was $1,209,290 as compared with $771,568 for the six months ended June 30, 2018, an increase of $437,722. Adjusted EBITDA is a non-IFRS measure.
Adjusted EBITDA as a percentage revenue for the three months ended June 30, 2019, was 20 per cent as compared with 1 per cent for the three months ended June 30, 2018. For the six months ended June 30, 2019, adjusted EBITDA as a percentage revenue was 23 per cent as compared with 16 per cent for the six months ended June 30, 2018. Adjusted EBITDA as a percentage revenue 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 June 30, 2019, was $5,321,119 as compared with $5,226,623 at March 31, 2019, an increase of 2 per cent. ACV is a non-IFRS measure.
The company defines acquisition revenue as gross revenues of the companies acquired at the time of acquisition and organic revenue as revenue over and above the acquisition revenues. For the three months ended June 30, 2019, organic revenue represented 44 per cent of total revenue (Q2 2018 -- 20 per cent; Q4 2018 -- 29 per cent; and Q1 2019 -- 35 per cent), with the remaining 56 per cent representing acquisition revenue (Q2 2018 -- 80 per cent; Q4 2018 -- 71 per cent; and Q1 2019 -- 65 per cent). Acquisition revenue and organic revenue are non-IFRS measures.
In the quarter, two new contracts were signed, which include software licensing revenue of $417,225, professional service revenue of approximately $184,685 and approximately $101,825 of recurring revenue over the initial term.
In addition, 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 (electronic health record) through Ottawa Hospital;
15 organizations are now eligible to sign a participation agreement allowing them to license the Treat software.
About Vitalhub Corp.
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.
We seek Safe Harbor.
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