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 ended March 31, 2024, with the Canadian securities authorities. These documents may be viewed under the Company’s profile at www.sedar.com.

Dan Matlow, CEO of VitalHub, commented on the quarter’s success, stating, “We are thrilled to report that VitalHub has kicked off 2024 with outstanding momentum, achieving a 21% increase in revenue, which rose to $15.3 million, up from $12.6 million in Q1 last year. Our focus on driving operational excellence and expanding our solution offerings continues to yield significant financial benefits and value for our shareholders. Our growth strategy, underpinned by both organic initiatives and strategic acquisitions, has effectively increased our Annual Recurring Revenue (ARR) by 21% to $47.8 million. This growth is a testament to our strong market position and our team's dedication to delivering innovative solutions that meet the evolving needs of healthcare providers. In Q1, we achieved a gross profit of 81%, reflecting our ability to scale efficiently while improving our cost structure. This resulted in a 56% increase in EBITDA to $3.1 million, and a notable increase in adjusted EBITDA, which rose to $4.0 million or 27% of revenue, compared to $2.9 million or 23% of revenue in Q1 last year. Our disciplined approach to cash management enabled us to end the quarter with a healthy cash balance of $33.3 million, after having made significant investments in growth initiatives and the purchase of Bookwise. In addition, when you add our recent financing, the Company now has in excess of $70 million in cash.”

Matlow concluded, “As we move through 2024, VitalHub is well-positioned to continue our growth trajectory. We remain focused on expanding our reach in existing markets, exploring new opportunities, and enhancing our product portfolio through innovation and strategic mergers and acquisitions. Our strong financial position supports our ambitious growth plans and our commitment to leading the digital transformation in healthcare.”

VitalHub Corp’s quarterly investor conference call will take place on Friday, May 10, 2024, at 9:00AM EST.

To register for the call, please visit:

https://us02web.zoom.us/webinar/register/WN_cauJ_EXXTKqJuMRFFeBKYw

First Quarter 2024 Highlights

• Revenue of $15,256,791 as compared to $12,595,174 in the equivalent prior year period, an increase of $2,661,617 or 21%.
• Gross profit as a percentage of revenue was 81% compared to 80% in the equivalent prior year period.
  • The increase in Q1 2024 was primarily due to an increase in higher margin maintenance and support revenues in the quarter, coupled with an ongoing effort to reduce costs and gain operating cost synergies.

• ARR ⁽¹⁻²⁾ at March 31, 2024 was $47,834,002 as compared to $39,634,517 at March 31, 2023, an increase of 21%.
  • ARR ⁽¹⁻²⁾ growth was largely due to organic growth of $6,472,477 or 15%, and acquisition growth of $1,062,500 or 2%. ARR ⁽¹⁻²⁾ also benefitted by a gain of $664,508 or 1% due to the increase in the GBP rates relative to the Canadian dollar in the quarter.

• EBITDA ⁽²⁾ of $3,099,016 compared to $1,987,747 in the equivalent prior year period, an increase of $1,111,269 or 56%.
• Adjusted EBITDA ⁽²⁾ of $4,044,932 or 27% of revenue, compared to $2,923,780 or 23 of revenue in the equivalent prior year period, an increase of $1,121,152 or 38%.
  • The increase in EBITDA ⁽²⁾ and adjusted EBITDA ⁽²⁾ from Q1 2023 to Q1 2024 was primarily attributable to the higher recurring revenues of $12,465,062 in Q1 2024, as compared to $9,997,484 in Q1 2023, coupled with an ongoing effort to manage costs and gain operating cost synergies.

• Net income before income taxes of $1,978,895 as compared to net income before income taxes of $780,428 in the equivalent prior year period, an increase of $1,198,467 or 165%.
  • The increase was primarily attributable to the significant increase in revenues from organic growth and acquisitions, coupled with an ongoing effort to reduce costs and gain operating cost synergies.

• Cash on hand at March 31, 2024 was $33,315,264 compared to $33,480,018 as at December 31, 2023.
  • After paying approximately $5.3M on acquisitions in the quarter, the Company has been able to maintain a steady cash balance, due to continued revenue growth (both organically and through acquisition) and with an ongoing effort to manage costs and gain operating cost synergies.

• Cash from operations before changes in working capital was $2,917,700 as compared to $1,476,785 for the same period last year.
• Subsequent, to the quarter the Company closed a bought deal offering for total gross proceeds of approximately $40,254,000.

(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.

SELECTED FINANCIAL INFORMATION
	Three months ended
	March 31, 2024	% Revenue	March 31, 2023	% Revenue	Change
	$		$		%
Revenue	15,256,791	100%	12,595,174	100%	21%
Cost of sales	2,973,692	19%	2,471,877	20%	(20%)
Gross profit	12,283,099	81%	10,123,297	80%	21%
Operating expenses
General and administrative	3,191,857	21%	3,611,092	29%	12%
Sales and marketing	1,696,464	11%	1,281,665	10%	(32%)
Research and development	3,418,122	22%	2,520,021	20%	(36%)
Depreciation of property and equipment	77,830	1%	75,283	1%	(3%)
Depreciation of right-of-use assets	106,762	1%	95,907	1%	(11%)
Share-based compensation	348,579	2%	277,684	2%	(26%)
Foreign currency gain	(68,276)	(0%)	(213,261)	(2%)	68%
Other income and expenses
Amortization of intangible assets	1,106,542	7%	1,054,247	8%	(5%)
Business acquisition, restructuring and integration costs	583,334	4%	658,349	5%	11%
Loss on change in fair value of contingent consideration	14,003	0%	-	0%	(100%)
Interest expense and accretion (net of interest income)	(184,807)	(1%)	(38,987)	(0%)	374%
Interest expense from lease liabilities	13,794	0%	20,869	0%	34%
Current and deferred income taxes	660,429	4%	618,260	5%	(7%)
Net income	1,318,466	9%	162,168	1%	713%
EBITDA (Non-IFRS measure)	3,099,016	20%	1,987,747	16%	56%
Adjusted EBITDA (Non-IFRS measure)	4,044,932	27%	2,923,780	23%	38%
Annual recurring revenue (Non-IFRS measure)	47,834,002		39,634,517		21%
Term licences, maintenance and support revenue	12,465,062	82%	9,997,484	79%	25%
				As at
				March 31, 2024	December 31, 2023
				$	$
	Deferred revenue			25,383,782	21,049,975
	Cash balance			33,315,264	33,480,018

ABOUT VITALHUB

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

VitalHub is a leading software company dedicated to empowering Health and Human Services providers. Our clients include hospitals, regional health authorities, mental health and addictions services providers for children and adults, long-term care facilities, home health agencies, correctional services, and community and social services providers. 

VitalHub’s comprehensive suite of SaaS solutions include:

• Electronic Health Record (EHR), Case Management, Care Coordination, and Optimization
• Patient Flow, Operational Visibility, and Patient Journey Optimization
• Workforce Automation

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 more than 1,000 clients across Canada, USA, UK, Australia, the Middle East, and Europe.

VitalHub is based in Toronto, Canada, with an offshore development hub in Sri Lanka. The VitalHub team comprises more than 400 team members globally. The Company is publicly traded on the Toronto Stock Exchange (TSX) under the symbol "VHI" and on the OTC Markets OTCQX Exchange under the symbol "VHIBF".

https://www.vitalhub.com/

CAUTIONARY STATEMENT

Certain statements contained in this news release may constitute "forward-looking information" or "financial outlook" within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information or financial outlook. 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. Although the Company 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 Company 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