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Message: Record Fourth Quarter and 2008 Fiscal Year End Results
| January 28, 2009 |
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Healthscreen Reports Record Fourth Quarter and 2008 Fiscal Year End Results
Company restates financial statements for first three quarters |
| TORONTO, ONTARIO--(Marketwire - Jan. 28, 2009) - Healthscreen Solutions Inc. (TSX VENTURE:MDU), Canada's premier provider of physician practice enhancement services and electronic medical record (EMR) software, today announced its fourth quarter and 2008 fiscal year end results for the period ending September 30, 2008. "I am pleased to report that 2008 marked a record revenue year in Healthscreen's history as we focused our efforts on growing our Physician Services business, enhancing our Software offering to customers, expanded our business across Canada (both organically and through acquisition), and strengthened the management and operating capacity of our Company," said Justin Belobaba, President and CEO of Healthscreen. Operational Highlights - Expansion of operations to three new provinces (British Columbia, Alberta & Manitoba) - Strengthened management team with addition of key experienced hires, including CFO, COO, VP Customer Services, and Controller - Acquisition of Regent Healthcare Systems and three partnerships in Western Canada doubles network of Canadian physicians from 4,000 to over 8,000 doctors, representing more than seven million Canadian patients - Launched HealthAlert, Company's first patient directed service - Healthscreen's EMR software, HSPractice, passes OMD 2.0 certification Financial Results - Fiscal Year For the fiscal year, revenue grew 217% to $9,345,796 compared to $2,949,175 in the prior fiscal year. Physician Services accounted for $5,745,693, or 61% of revenue, compared to $867,965 in 2007, or 29%. Software Products generated $3,600,103 or 39% of revenue, compared to $2,081,210 in fiscal 2007, or 71%. Gross profit for the period, which accounts for costs of hardware, mailing costs, and other direct costs associated with the offering of the Company's software and services, decreased from 85% to 73% of revenue, due to an increase in hardware sales of 239%, which has a lower margin, over prior year. Compared to fiscal 2007, SG&A expenses increased from $2,300,480 to $5,111,838. Expressed as a percentage of revenue, however, SG&A decreased from 78% of revenue to 55%. The majority of SG&A costs continue to be related to payroll and professional fees. Operating expenses increased from $947,127 to $3,275,875. Expressed as a percentage of revenue, operating expenses increased to 35% from 32%. Adjusted EBITDA for the year decreased to a loss of $1,589,725 compared to a loss of $736,326 in the prior year. Net loss from continuing operations was $3,164,830, or $0.048 per share, and net loss was $3,446,305, or $0.052 per share. This represents a relatively flat per share performance compared to the result posted in the 2007 period which had a net loss from continuing operations of $1,427,846, or $0.042 per share, and net loss of $1,671,011, or $0.049 per share. During the normal course of audit, management concluded that certain adjustments to previously stated quarterly results be made, due to the Company's accounting systems having difficulty keeping up with the transaction volume, the new product offerings and the acquisitions. These adjustments pertained primarily to revenue recognition and allocation of certain expenses. As a result, revenue for the first quarter of 2008 was restated to $1,830,538 from $1,910,765, and adjusted EBITDA loss was restated to $419,602, from $311,025. Revenue for the second quarter of 2008 was restated to $1,823,330, from $2,203,808, and adjusted EBITDA loss was restated to $642,323, from $273,217, while revenue for the third quarter of 2008 was restated to $2,631,654 from $2,615,400, and adjusted EBITDA loss was restated to $259,312, from $266,732. The amended and restated financial statements of the Company for the first, second and third quarter of 2008 that have been filed on SEDAR provide expanded note disclosure (in each case, found at Note 2) of the effect of the applicable restatement. Financial Highlights - Fourth Quarter For the fourth quarter, Healthscreen's consolidated revenue increased to $3,060,274, compared to $1,419,799 for the corresponding period ending September 30, 2007, and $2,631,654 from the restated third quarter of fiscal year 2008. On a segmented basis, Physician Services accounted for $2,064,115, or 67%, of total revenue, compared to $642,803, or 45% of revenue, in the comparable quarter last year. "Fourth quarter's results were on track, as revenues grew to more than Healthscreen's entire 2007 fiscal year revenue. The Adjusted EBITDA loss is disappointing, but is due largely to unforeseen expenses that were misallocated in our accounting system, and conservative accounting practices adopted by our new finance team," said Mr. Belobaba. "Since the start of first quarter 2009, we have further focused on continuing to build our infrastructure for scalability, and began realizing greater efficiencies as we increased customer satisfaction, and targeted profitability. With the largest distribution network of doctors in the country, and a driven and committed team, I believe we are better positioned than ever before to execute on our growth strategy and capitalize on opportunities, such as yesterday's $500 million electronic medical record funding announcement by the federal government." As at September 30, the Company's cash position was $2,153,052, compared to $3,943,142 in the previous quarter. The total issued and outstanding shares as at September 30, 2008 was 68,115,011. Subsequent to the end of the quarter, the Company announced a private placement of 5,000,000 common shares, raising $850,000 in gross proceeds, which closed on December 19, 2008. Under applicable securities laws, the shares issued in the private placement are subject to a four month hold, which expires April 19, 2009. In addition, in January 2009, Healthscreen issued 1,403,514 common shares at a price of $0.21275 per share to the former shareholders of Regent Healthcare Systems as part of Healthscreen's acquisition of Regent, which closed on July 4, 2008. The shares issued to the former shareholders of Regent are also subject to a four month hold, which expires May 4, 2009. The number of issued shares of the Corporation is now 74,518,525. Complete financial statements and the Management Discussion and Analysis for the fiscal year 2008, together with the amended and restated quarterly financial statements and Interim Management Discussion and Analysis for the first, second and third quarter of 2008, are available on the Company's website at www.healthscreen.com and www.sedar.com. Conference Call Healthscreen will host a conference call on January 30, 2009 at 10:30 AM EST. Mr. Justin Belobaba, President and CEO, and Mr. Ken Killin, CFO will review the quarter-end results and respond to questions during the call. Investors and analysts are invited to call the conference line: 416-915-9040 or 1-866-261-3038 at least 5 minutes prior to the start of the call. For those unable to participate in the live conference, the event will be archived and available for replay on the Company's website or until February 6 at 11:59 pm by dialing 416-915-1035 or 1-866-245-6755, and entering passcode 92213. About Healthscreen Solutions Healthscreen Solutions (www.healthscreen.com) provides a comprehensive suite of practice enhancement products and services to increase physician productivity and revenue while reducing costs and improving patient care. The Company's portfolio includes billing and scheduling software, electronic medical records software, CallerMD which assists physicians in managing a range of uninsured medical services, PrevCareMD which helps physicians earn supplemental income by achieving government-set preventive care targets, and HealthAlert which allows physicians to help their patients in managing complex healthcare issues. Healthscreen's and its partners' services and software are used by over 8,000 full-time physicians who are responsible for the health care of more seven million Canadian patients. (C) 2009 Healthscreen Solutions Inc. All Rights Reserved. (i)Adjusted EBITDA is defined by the Company as earnings before interest, tax, depreciation, amortization, stock-based compensation, other non-operating income and expenses, and non-recurring items. The term does not have any standardized meaning according to Canadian GAAP and it is therefore unlikely to be comparable to similar measures presented by other companies. For further details in this regard, see the Management's Discussion and Analysis for the Fiscal Year ended September 30, 2008 filed on www.sedar.com. |
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