Vigil Health Solutions Inc. (“Vigil”) announces the results of operations for the quarter ending June 30, 2008.

“We are very encouraged to see positive cash flow in this quarter as well as the continued growth in sales bookings” stated Troy Griffiths, President and CEO.

Business highlights

·         Positive cash flow of $50 thousand was achieved, primarily driven by increased receipts from progress billings and customer deposits for new orders.

·         Sales bookings for the quarter were up 28% to $1.16 million compared to $0.9 million in Q1FY08.

·         The Company held an order backlog of approximately $3.97 million at Q1FY09 compared to $1.92 million in Q1FY08.

·         Deferred revenue increased 120% to $1.66 million reflecting the 46 projects in various stages of installation and progress billing, compared to $0.8 million and 23 projects in Q1FY08.

·         Secured a new corporate in the quarter bringing the total to 18 corporate clients and received recurring sales bookings from 4 existing corporates.

Financial Results

Revenue for Q1FY09 was $701 thousand compared to $904 thousand in Q1FY08, a decrease of 23%. The decrease in project revenue reflects construction delays which resulted in a lower number of projects being commissioned in the period compared to Q1FY08. Revenue received from sales and maintenance contracts and replacement products grew by 105% to $155 thousand. 

Bookings for the quarter were up 28% to $1.16 million compared to $902 thousand in Q1FY08.

Vigil had a backlog of approximately $3.97 million (including $1.66 million in deposits and progress billings, recorded as deferred revenue on balance sheet) in Q1FY09 compared to $1.92 million (including $756 thousand in deposits and progress billings, recorded as deferred revenue on balance sheet) in Q1FY08.

The gross margin percentage for Q1FY09 was 47% compared to 52% for Q1FY08. In the first quarter of fiscal 2008 gross margins were above management’s expectations due to a favourable product mix for the projects commissioned in this quarter. While lower than the previous year the gross margin received in the current fiscal are in line with management’s expectations of annual margins of between 42% and 47%.

Operating expenses for Q1FY09 were $614 thousand, up 17% from $524 thousand in Q1FY08.  The growth in expenses was due to an increase in insurance costs (prior to the Company switching to a new lower cost insurance provider), advertising, sales travel expenses and research and development staffing.

Losses for Q1FY09 were $288 thousand, or $0.003 per share an increase of 235% compared to $86 thousand, or $0.001 per share for the same quarter in the previous year. The increase in losses can be attributed to the decrease in revenues relating to the lower number of projects commissioned. However, the high number of projects underway in the quarter and related deferred revenue resulted in a positive cash flow.

The following is a summary of our financial performance for the three months ended June 30, 2008. Detailed financial statements along with Management Discussion and Analysis have been filed with SEDAR and may be viewed at (www.sedar.com) or on the Company web site (http://www.vigil.com/investors/financial-statements/).