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Vitalhub Corp (2)
Symbol VHI
Shares Issued 26,601,130
Close 2020-08-11 C$ 1.65
Recent Sedar Documents

Vitalhub earns $179,467 in Q2 2020

2020-08-11 16:16 ET - News Release

Mr. Dan Matlow reports

VITALHUB REPORTS POSITIVE EBITDA OF 26% OR $705,901 ON REVENUES OF $2,748,895 FOR Q2 2020

Vitalhub Corp. has filed its interim condensed consolidated financial statements and management's discussion and analysis for the three and six months ended June 30, 2020, with the Canadian securities authorities. These documents may be viewed under the company's profile on SEDAR.

Highlights

Net income 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 (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.

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 {ჟ –} 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.

Chief executive officer 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 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.

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.

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