The Company reported year over year revenue growth of 10% to $7.6 million for Q1 2015 compared to $6.9 million in Q1 2014. The Company also reported an 18% increase in recurring revenue run rate to $24.8 million at the end of Q1 2015 compared to $21.0 million at the end of Q1 2014.
First Quarter 2015 Highlights:
- Record first quarter revenues of $7.6 million, a 10% increase over Q1 2014 revenue of $6.9 million.
- Adjusted EBITDA(1) for Q1 2015 of $0.7 million or 9.4% of revenue compared to $20,029 or 0% for Q4 2014 and $1.0 million or 15.1% of revenue for Q1 2014.
- Recurring revenue run rate of $24.8 million, 82% of total revenue, up from 77% at the end of Q1 2014.
- Basic Earnings (Loss) per Share from continuing operations of ($0.02) for the quarter compared to ($0.00) for Q1 2014.
- As at March 31, 2015, Days Sales Outstanding (“DSO”) was 46 days compared to 53 days at March 31, 2014.
- The Company closed the quarter with $13.8 million of cash and receivables.
“During this quarter, in a span of three weeks, we deployed the innovative 2015 release of our flagship software product, AccuroEMR, to all of our Accuro customers across Canada,” said Mike Checkley, President of QHR Corporation. “We are very pleased with the continued growth of our recurring revenue base and intend to focus on growing our core Electronic Medical Records (“EMR”) business.”
QHR recently announced that following a strategic review, it has decided to sell or wind down its Billing Services, Clearinghouse, Tradelink EDI, and related service products, (“RCM Assets”) in the near future. In addition, QHR is continuing an internal restructure in an effort to focus on its core business and reduce costs. The Company continues to look for strategic partners to enhance client offerings as well as acquisition opportunities to increase its client base.
To complete the disposition of the RCM Assets in a timely fashion, and to pay for related management and staff restructuring costs, QHR anticipates that it will incur one-time cash outlay in the range of $1.6 to $2.0 million. The Company will also take a non-cash impairment charge for intangibles and goodwill of a maximum $2.6 million which would be lowered by any amounts received from the sale of the RCM Assets.
This restructuring is expected to achieve $1.6 to $2.0 million in annualized cost savings, beginning in the second half of 2015. The Company expects to see the positive impact in profitability beginning in Q3 of 2015.
Revenue of $7.6 million for Q1 2015 was largely driven by organic growth of the Accuro EMR product. Revenue increased by $690,339 or 10% from $6.9 million during Q1 2014.
Adjusted EBITDA(1) for the quarter was $716,143, an improvement of $696,114 from Q4 2014 adjusted EBITDA(1) of $20,029. Adjusted EBITDA(1) for Q1 2015 was down from $1,040,877 for the same quarter last year. This decrease in adjusted EBITDA(1) is due to operating cost increases associated with the recent addition of the virtual care product. Adjustments to EBITDA of $891,238 included payments of $714,784 related to the Company’s CEO, Mr. Hildebrandt’s, retirement and related professional fees as well as $176,454 for restructuring and CEO succession search fees.
(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.
Net Earnings (Loss)
Net loss for the quarter ended March 31, 2015 was $801,280 compared to net earnings of $96,433 for the quarter ended March 31, 2014. The most significant differences quarter-over-quarter were due to the costs detailed in the adjustments to EBITDA.
For the quarter ended March 31, 2015, operating activities resulted in net cash outflows of $2,115,180, compared to net cash outflows of $944,026 for the same period in 2014. The cash outflow for Q1 in 2015 is driven primarily by payments related to the Mr. Hildebrandt’s retirement agreement, as well as increases in accounts receivable and a reduction in accounts payable.
At March 31, 2015, the Company had cash and cash equivalents in the amount of $9.9 million and trade and other receivables of $3.9 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.
Conference Call – The Company executives will host a conference call at 11:00 AM EDT (8:00 AM PDT) Thursday, May 28, 2015, to discuss the Company’s Q1 2015 financial results. To join the conference call, please dial Toll Free 1-888-390-0546, Conference ID# 05040708
On behalf of the Board of Directors
Al Hildebrandt, CEO
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.
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 continue to focus on growing its core EMR business. 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.
For further information, please contact:
Jerry Diener, CFO & VP Finance
Mike Checkley, President