KELOWNA, BC, Aug. 20, 2015 /CNW/ - (TSX-V: QHR) QHR
Corporation ("QHR" or the "Company"), a leader in the
Healthcare Information Technology sector, has announced financial
results for its quarter ended June 30,
2015, reporting year over year revenue growth of 8% to
$6.6 million for Q2 2015 compared to
$6.1 million in Q2 2014. The
Company also reported a 21% increase in recurring revenue run rate
to $22.6 million at the end of Q2
2015 compared to $18.7 million at the
end of Q2 2014. In light of the recent sale of the Company's
RCM Division, the RCM assets, revenue and expenses have been
removed from continuing operations.
Second Quarter 2015 Highlights:
- Acquired assets from Canadian EMR provider Jonoke Software
- Executed on plan to divest of RCM Assets
- Increased recurring revenue run rate to $22.6 million, up 21% from $18.7 million, at the end of Q2 2014.
- Recurring revenue for the quarter was 85.5% of total revenue,
compared to 76.4% in Q2 of 2014.
- Second quarter revenues of $6.6
million, an 8% increase over Q2 2014 revenue of $6.1 million.
- Adjusted EBITDA(1) for Q2 2015 of $0.6 million or 9.3% of revenue compared to
$1.2 million or 20% for Q2 2014 and
$1.1 million or 16.3% of revenue for
Q1 2015.
- Basic Earnings (Loss) per Share from continuing operations of
($0.02) for the quarter compared to
$0.01 for Q1 2014.
- The Company closed the quarter with $11.3 million of cash and receivables.
- As at June 30, 2015, Days Sales
Outstanding ("DSO") was 32 days compared to 52 days at
June 30, 2014.
During the quarter the Company completed its purchase of the
Jonoke Software Development assets, which consisted primarily of
Jonoke's aging EMR platform and its clients. The Company
intends to use these assets to leverage growth of its Accuro EMR
product, which now serves over 6,700 healthcare providers across
Canada, by transitioning Jonoke
clients to the Accuro platform and enhancing the benefits of using
one strong EMR platform across Canada.
"While the Jonoke acquisition represented a fundamental
component of our strategy, we also executed on divesting non-core
assets in the quarter, completing our previously announced plan to
divest our underperforming Billing Services, Clearinghouse,
Tradelink EDI, and related services products (the "RCM
Assets"). We also continued our internal restructure,
focusing our efforts on our core business and reducing costs," said
Mike Checkley, President & CEO
of QHR Corporation.
On July 14, 2015, QHR announced
that it had sold substantially all of its RCM Assets to a US-based
billing and clearinghouse company. In this transaction, QHR
sold substantially all of its RCM Assets, including customer
relationships, products, related intellectual property, and some of
its employees, in exchange for a cash purchase price in an amount
to be determined and paid over an earn out period of 36 months from
closing. QHR does not anticipate that proceeds from this
transaction will be material. The primary benefit of this
transaction lies in projected cost savings, as the sale was part of
an overall restructuring effort to save $1.6
to $2.0 million in annualized expenses.
"QHR is now a streamlined business with a clear focus on
healthcare tech for providers and patients. Moving the
operation towards profitability with such a high percentage of
recurring revenue puts us in a very strong position to not only
continue to grow market share, but also increase investments in new
technology for the emerging Virtual Care and Personal Health Record
markets." said Mike Checkley,
President & CEO of QHR Corporation.
"We are pleased to report a 21% increase in recurring revenue
compared to the same quarter last year. Our recurring revenue
was 86% of our total revenue for Q2 2015 and we continue to grow
our recurring revenue quarter over quarter in keeping with our
growth strategy," said Jerry Diener,
CFO of QHR Corporation.
Revenue
Revenue of $6.6 million for Q2
2015 was largely driven by organic growth of the Accuro EMR
product. Revenue increased by $478,999 or 8% from $6.1
million during Q2 2014.
Net Earnings (Loss)
The net loss for the quarter ended June
30, 2015 was $5,756,912,
primarily driven by the loss from discontinued operations as
previously announced. The $4,795,760
loss from discontinued operations includes a loss of $974,115 from operating activities, an impairment
loss to intangible assets and goodwill of $2,612,699, and deferred income tax expense of
$1,208,946. Both the impairment
loss and the deferred income tax expense are non-cash losses.
Cash Flow
For the quarter ended June 30,
2015, operating activities resulted in net cash outflows of
$3,134,316, compared to net cash
inflows of $1,659,143 for the same
period in 2014. The cash outflow for Q2 in 2015 was driven
primarily by costs related to the disposition of the RCM assets,
other one-time charges and changes in working capital.
At June 30, 2015, the Company had
cash and cash equivalents in the amount of $8.9 million and trade and other receivables of
$2.3 million. The Company is
not using any of its operating line and has no outstanding
debt.
Full financial statements, together with Management's Discussion
and Analysis are available on SEDAR.
About QHR Corporation
QHR is a leader in Healthcare Technology, empowering providers
and connecting patients. With an 11-year track record
offering what is now the single leading Electronic Medical Records
platform in Canada, QHR has a
suite of complementary offerings that empower health professionals
and drive the Company's growth. The Company's technologies and
services enable secure medical records management for clinical
environments, empower health providers with tools for virtual care
including secure video and messaging, and tools for clinic
management including scheduling, billing, and patient management,
Health providers choose QHR to drive efficiencies within their
practice and improve the quality of care delivered to patients.
(1) Management uses a non-IFRS measure
of EBITDA and Adjusted EBITDA as supplemental measures to evaluate
the performance of the Company. EBITDA is defined as earnings
before income tax expense, financing costs, depreciation,
amortization and stock-based compensation. Adjusted EBITDA is
defined as EBITDA adjusted with acquisition, transition and
integration costs and other expenses that do not impact core
operating performance.
Management believes that EBITDA and Adjusted EBITDA provides
an important measure of the Company's operating performance because
they allow management, investors and others to evaluate and compare
the Company's core operating results, including its return on
capital and operating efficiencies, from period to period by
removing the impact of its capital structure (interest expense),
asset base (depreciation and amortization), tax consequences, other
non-core operating items (acquisition costs) and other non-free
cash items. Both EBITDA and Adjusted EBITDA do not have any
standardized meaning prescribed by IFRS, other companies may
calculate these non-IFRS measures differently, and therefore our
EBITDA and Adjusted EBITDA may not be comparable to a similar
titled measure by other companies. Accordingly, investors are
cautioned not to place undue reliance on them and are also urged to
read all accounting disclosures presented in the un- audited
consolidated financial statements and accompanying notes for the
quarter ended March 31, 2015.
Conference Call - The Company executives will host a
conference call at 11:00 AM EDT
(8:00 AM PDT) Thursday, August 20, 2015, to discuss the
Company's Q2 2015 financial results. To join the conference call,
please dial Toll Free 1-888-390-0605, Conference ID#
75001545
On behalf of the Board of Directors
Mike Checkley, President &
CEO
Legal Notice Regarding Forward Looking
Statements
This news release may contain "forward looking statements"
within the meaning of applicable Canadian securities legislation.
These statements are subject to risks that may cause the actual
results to be materially different in future periods from those
expressed or implied by such forward looking statement.
Forward-looking statements in this news release include those
concerning the Company's intent to use the
Jonoke assets to leverage growth of its Accuro EMR product, its
anticipation that proceeds from the sale of the RCM Assets will not
be material and its projection that the primary benefit from the
sale of the RCM Assets lies in projected cost savings of between
$1.6 and $2.0 million
annually. Risks that may prevent or delay the
forward looking statements from coming to fruition include the
possibility that the Company may not offer products that are
acceptable to industry regulators or customers; competition, the
availability of capital, changing regulatory requirements, the
Company's ability to attract and retain key personnel, product
obsolescence, work flow and market factors that could increase
costs more than expected. QHR is a technology business
development enterprise where investment and product enhancements
must be carefully managed to achieve long-term revenue growth and
profitability. It is the Company's policy not to update forward
looking statements except to the extent required under applicable
securities laws. Further information on the Company is available at
www.sedar.com or at the Company's website,
www.QHRtechnologies.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE QHR Corporation