VHI Vitalhub Corp

VitalHub Corp. (the “Company” or “VitalHub”) (TSX:VHI) (OTCQX:VHIBF) announced today it has filed its Interim Condensed Consolidated Financial Statements and Management's Discussion and Analysis report for the three and nine months ended September 30, 2022, with the Canadian securities authorities. These documents may be viewed under the Company's profile at www.sedar.com.

VitalHub’s Chief Executive Officer Dan Matlow commented,

“Despite Q3 historically having been our seasonally weakest quarter, and notwithstanding the foreign currency headwinds associated with the British pound, Q3 2022 saw continued and consistent improvement across all of our key indicators, quarter over quarter. We continued to grow our organic annual recurring revenue by adding another $850K on a constant currency basis, and achieved another record adjusted EBITDA of $2.2 million for the quarter. With the addition of the Community Data Solutions and Advanced Digital Innovation acquisitions, our ARR stands at close to $34 million. We have significant cash on hand and the availability of a Bank of Nova Scotia Facility, together totaling $48 million available to continue our strategic acquisition strategy, while we continue to generate significant cash from operations that we expect to continue to grow. We have never been in a better position than we are in at the present time.”

VitalHub’s quarterly investor conference call will take place on Friday, November 11, 2022, at 9:00AM EST. To join the call, please dial 1-888-664-6383 (Toll-Free North America) or 416-764-8650 (Local – Toronto) and enter confirmation number 13111266. 

A replay of the call will be available until Friday, December 11, 2022, and can be accessed by dialing 1-888-390-0541 (Toll-Free North America) or 416-764-8677 (Local – Toronto), using the replay entry code 111266#.

Third Quarter 2022 Highlights

• Revenue of $9,780,553, an increase of $3,161,506 or 48% from the comparative period in the prior year.
• Gross profit as a percentage of revenue for Q3 2022 was 80% compared to 82% in Q3 2021.
• ARR (1, 2) at the end of Q3 2022 was $30,967,215.
  • Organic growth of $850,755 or 2.73% from Q2 2022,
  • Reduction of $1,103,048 or 3.53% due to the decrease in the value of the GBP pound relative to the CAD dollar from the prior quarter.
• EBITDA (2) of $1,389,065 compared to $189,088 in the comparative period in the prior year.
• Adjusted EBITDA (2) of $2,151,753, or 22% of revenue, compared to $1,277,573 or 19% of revenue in the comparative period in the prior year.
• Cash on hand at September 30, 2022 was $36,065,885 compared to $16,389,982 as at December 31, 2021.
• During the quarter, the Company secured additional financing from The Bank of Nova Scotia. Increasing its operating credit limit from $1,000,000 to $6,000,000 and its revolving term facility from $10,000,000 to $27,000,000.
• Subsequent to the quarter, the Company acquired all of the issued and outstanding shares of QWAD Community Technologies Pty Ltd, doing business as “Community Data Solutions” (“CDS”), a company incorporated and conducting business in Australia. CDS offers an online case management system and supporting products serving 350+ agencies located in all states and internal territories of Australia. Total closing consideration for the acquisition was all-cash for a purchase price at closing of approximately AUD $8,197,155 (CAD $7,110,663), which was after customary closing and working capital adjustments.
• Subsequent to the quarter, the Company acquired certain assets to maintain the business of Advanced Digital Innovation (UK) Limited (“ADI”) with the product widely known as MyPathway. MyPathway is a digital health platform which is used to improve patient interactions during treatment. Total closing consideration for the acquisition was all-cash for a purchase price of approximately GBP 250,000 (CAD $382,740).
• Subsequent to the quarter, the Company repaid the balance of its Scotia revolving facility loan in the amount of $8,999,982.
• With the addition of the ARR(1, 2) of CDS and ADI subsequent to the quarter, the Company’s proforma ARR would be approximately $34,000,000.

Nine Month 2022 Highlights

• Revenue of $28,681,209, an increase of $10,946,909 or 62% from the comparative period in the prior year.
• Gross profit as a percentage of revenue for the nine months ended was 82% compared to 79% from the comparative period in the prior year.
• ARR (1, 2) at September 30, 2022 was $30,967,215 as compared to $21,569,032 at September 30, 2021, an increase of 44%.
• EBITDA (2) of $ 4,779,798 compared to $645,439 in the comparative period in the prior year.
• Adjusted EBITDA (2) of $ 7,069,334 as, or 25% of revenue, compared to $ 3,197,090 or 18% of revenue in the comparative period in the prior year.
• Cashflow from operations before changes in working capital was $5,280,072 for the period as compared to $1,394,927 for the same period last year.

(1) The Company defines annual recurring revenue (“ARR”) as the recurring revenue expected based on yearly subscriptions of the renewable software license fees and maintenance services.(2) Non-IFRS measure.

Q3 2022 and 2021 Results

	Three months ended							Nine months ended
	2022		%Revenue	2021		%Revenue	Change	2022	%Revenue	2021		%Revenue	Change
	$			$			%	$		$			%
Revenue	9,780,553		100%	6,619,047		100%	48%	28,681,209	100%	17,734,300		100%	62%
Cost of sales	1,952,398		20%	1,174,244		18%	66%	5,032,259	18%	3,773,770		21%	33%
Gross Profit	7,828,155		80%	5,444,803		82%	44%	23,648,950	82%	13,960,530		79%	69%
Operating Expenses
General and administrative	2,086,415		21%	1,361,762		21%	53%	6,007,993	21%	3,638,214		21%	65%
Sales and marketing	1,076,673		11%	974,506		15%	10%	3,148,312	11%	2,646,543		15%	19%
Research and development	2,622,921		27%	1,875,775		28%	40%	7,365,681	26%	4,328,219		24%	70%
Depreciation	69,992		1%	42,625		1%	64%	173,865	1%	117,314		1%	48%
Depreciation of right-of-use assets	64,158		1%	71,006		1%	(10%)	179,640	1%	201,769		1%	(11%)
Stock based compensation	289,019		3%	484,226		7%	(40%)	872,803	3%	1,088,306		6%	(20%)
Foreign currency (gain) loss	(109,607	)	(1%)	(44,469	)	(1%)	146%	56,573	0%	148,311		1%	(62%)
Other Income and Expenses
Amortization of intangible assets	847,818		9%	637,685		10%	33%	2,327,016	8%	1,618,502		9%	44%
Business acquisition, restructuring and integration costs	473,669		5%	604,259		9%	(22%)	1,416,733	5%	1,463,345		8%	(3%)
Interest expense and accretion (net of interest income)	(75,059	)	(1%)	(7,292	)	(0%)	929%	30,626	0%	(25,584	)	(0%)	(220%)
Interest income from sublease	0		0%	0		0%	0%	0	0%	0		0%	0%
Interest expense from lease liabilities	72,658		1%	20,856		0%	248%	105,594	0%	64,236		0%	64%
(Gain) loss on disposal of property and equipment	0		0%	(344	)	(0%)	100%	1,057	0%	2,153		0%	(51%)
Current and deferred income taxes	368,721		4%	0		0%	(100%)	410,087	1%	10,071		0%	3972%
Net income (loss)	40,777		0%	(575,792	)	(9%)	107%	1,552,970	5%	(1,340,869	)	(8%)	(216%)
EBITDA(Non-IFRS measure)	1,389,065		14%	189,088		3%	635%	4,779,798	17%	645,439		4%	641%
Adjusted EBITDA(Non-IFRS measure)	2,151,753		22%	1,277,573		19%	68%	7,069,334	25%	3,197,090		18%	121%
Annual Recurring Revenue(Non-IFRS measure)	30,967,215			21,569,032			44%	30,967,215		21,569,032			44%
Recurring revenue(Non-IFRS Measure)	7,657,559		78%	5,462,774		83%	40%	20,623,096	72%	13,960,056		79%	48%
Deferred revenue	15,232,153			8,821,331				15,232,153		8,821,331
Cash balance	36,065,885			16,389,982				36,065,885		16,389,982

ABOUT VITALHUB

Software for Health and Human Services providers designed to simplify the user experience & optimize outcomes.

Vitalhub provides technology to Health and Human Services providers including; Hospitals, Regional Health Authorities, Mental Health, Long Term Care, Home Health, Community and Social Services. Vitalhub solutions span the categories of Electronic Health Record (EHR), Case Management, Care Coordination, Patient Flow & Operational Visibility, and DOCit Mobile Apps. 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 275+ clients across Canada, USA, UK, Australia, Qatar, and Latvia. 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