TORONTO, ON / ACCESSWIRE / May 11, 2020 / NEXGENRX INC. (TSXV:NXG) ("NexgenRx" or the "Company") is pleased to announce its interim financial results for the quarter ended March 31, 2020.
Q1 2020 ended on a positive note with new recurring revenue producing a growth rate of 20.62% vs. 2019, however the effects of COVID-19, with the lockdown starting March 16th, began impacting revenue immediately and continues to drag down the Company's revenue. First quarter net income of $284,591, representing an increase of $176,614 over the first quarter of the prior year. First quarter EBITDA of $589,893 represented an increase of $204,906 over the first quarter of the prior year. As soon as the COVID-19 lockdowns began, the Company instituted its disaster containment strategy, made up of 3 distinct phases; Mobilize, Stabilize and Strategize.
The Company immediately exercised its Mobilize phase and had all staff working remotely as of March 17th. On March 25th, the Company exercised the first part of its Stabilize phase by forming a Business Continuity Plan (BCP) team that meet every Monday, Wednesday and Friday mornings to manage the changes that were occurring in real-time. By immediately cutting expenses to match projected reduced revenue, the Company was able to stay ahead of the curve while still maintaining optimal operations efficiencies. As the Company continues to move forward it is progressing into its Strategize phase, where it will seek opportunities for further efficiencies and growth.
The Company continuously evaluated the eligibility criteria for the newly enacted Canada Emergency Wage Subsidy (CEWS) program. After many iterations, the program finally crystalized into three qualifying periods (and now reportedly a fourth period has been added). The Company did not qualify for the first period but will qualify for the second period that runs from April 12 - May 9. Management believes that the Company will automatically qualify for the 3rd period as a result.
The effect of the COVD-19 pandemic on the first quarter ended March 31, 2020 saw an overall slight decline in dental and extended health care (EHC) transactions. Combined revenue in dental and EHC dropped by 8.7% compared to the same period last year. Because pharmacies are deemed essential and have remained open, the performance of drug transactions has stayed strong in the first quarter. Dental and extended health claims subsequent to the end of Q1 have reduced by over 90% as a result of the COVID-19 pandemic. The Company projects that the cost cutting measures that were quickly implemented in March 2020 will allow it to remain cash flow positive as the Company and the world work their way through this crisis. The Company is ensuring that its customers continue to receive the level of services they expect while keeping its expenses under control.
"Overall, the first quarter of 2020 continued to represent positive growth for the Company up until mid-March, when the COVID-19 pandemic hit. NexgenRx and its staff have done an exemplary job in continuing to provide top-quality services in processing claims and responding to call centre inquiries. Though we recognize that 2020 will represent new challenges for us and for the industries that we interact with, we take comfort that we continue to be well positioned to capitalize on the market's demand for an alternative to the traditional group benefits offerings as we enter into our Strategize phase as the COVID-19 pandemic subsides," stated Ron Loucks, President & CEO.
About NexgenRx
NexgenRx is Canada's only independent full service technology solutions provider, offering proprietary full front end enrolment, hour bank and mobile access capabilities, combined with state of the art claims adjudication and full provider network coverage. These combined capabilities allow NexgenRx to provide complete proprietary solutions to plan sponsors that need sophisticated front end administration and health benefit technology applications, all in a cost- effective manner. NexgenRx is committed to building partnerships with organizations looking to exceed the expectations of their clients and plan members and deliver superior administration and claims processing solutions at a competitive cost. More information on NexgenRx can be found at www.nexgenrx.com.
Caution Regarding Forward-Looking Statements
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to continued positive earnings and profitability. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: uncertainty as to whether our strategies and business plans will yield the expected benefits; availability and cost of capital; the ability to identify and develop and achieve commercial success for existing and new products and technologies; the level of expenditures necessary to maintain and improve the quality of products and services; changes in technology and changes in laws and regulations; continued development and enhancement of the Company's proprietary software technology; cyber security risks and the other risks and uncertainties disclosed in our annual Management's Discussion and Analysis, as filed under our profile on SEDAR at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
Neither 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 the release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Ronald C. Loucks
NexgenRx Inc.
President and CEO
416.695.3393 x801
Kelly Ehler CPA, CA
NexgenRx Inc.
Chief Financial Officer
416-695-3393x803
SOURCE: NexgenRx Inc.