Interim onlyFinancial Report
useFor the six months ended 30 September 2021 personalFor
Volpara Health Technologies Limited
ASX:VHT (NZ Company no. 2206998/ARBN 609 946 867)
2
only |
3
Key figures
Interim Financial Report | |
use | |
for the six months ended 30 September 2021 | |
3 | Key figures |
4 | Director's report |
7 | Auditor's independence declaration |
8 | Financial statements |
12 | Notes to the consolidated interim financial statements (unaudited) |
21 | Independent review report |
23 | Company directory |
personalFor |
MARKET SHARE OF NORTH AMERICA*
34% +2%
Compared to the period ended 31 March 2021
REVENUE
$12.3 m +30%
Compared to the prior corresponding period
ARR (US$)
$20.4 m+10%
DATABASE IMAGES
49.2 m +25%
Compared to the period ended 31 March 2021
GROSS MARGIN
91.4%
Volpara Health Half Year Report 2021
Compared to the period ended 31 March 2021 | Compared with 91.7% in the prior corresponding period |
*Of US and Canadian women screened for breast cancer, approx. 34% had at least one Volpara product analyse their data and/or images
4
Directors' report
5
The Directors are pleased to present their report in | researchers around the world to help them understand | ||||
conjunction with the financial statements of Volpara Health | what optimal breast cancer screening might look like for | ||||
Technologies Limited (Volpara or the Company) and its | their populations. To reach and educate women directly, | ||||
subsidiaries (together referred to as the Group) for the | we launched a consumer-facing breast density website | ||||
half-year (HY) ended 30 September 2021, and the auditor's | and customised patient density notification letters. | ||||
report thereon. The financial statements have been | |||||
reviewed by the Company's auditor and approved by the | |||||
onlyDirectors on the recommendation of the Audit Committee. | Results of operations | ||||
use | After an excellent finish to FY21, Volpara has focused on | ||||
accelerating out of COVID‑19. Adapting quickly last year to | |||||
Directors | a new, digital way of working, the Company has maintained | ||||
The Directors of Volpara in office during | its momentum and posted its best-everhalf-year result | ||||
the half-year and at the date of this report | in terms of new business won. Annual Recurring Revenue | ||||
(unless otherwise stated) are as follows: | (ARR) increased by over US$1.8M to US$20.4M+ (up almost | ||||
• | Paul Reid (Chair) | 10% from end FY21) with a corresponding increase in | |||
Accounting Revenues of NZ$2.9M to NZ$12.3M (up 30% | |||||
• | Dr Ralph Highnam (CEO) | ||||
from $9.5M for HY21, or 38% constant currency). The net | |||||
• | Roger Allen AM | ||||
loss for HY22 was NZ$8.5M, an improvement of 4% from | |||||
• | John Pavlidis | ||||
personal | NZ$8.9M in the prior period. Similarly, Normalised non- | ||||
• | John Diddams | GAAP EBITDA1 has improved 4% from NZ$6.6M to NZ$6.4M. | |||
• Dr Monica Saini (retired 18 August 2021) | We also made some key changes to the business during | ||||
• | Karin Lindgren | the HY. Jill Spear was brought on as Executive Vice | |||
• Ann Custin (appointed 1 September 2021) | President of Sales and Marketing for the US region; we | ||||
also hired Kristin Bravo as Director of Product Marketing | |||||
Impact | and Innovation and MaryAnne Molter as Director of | ||||
While clearly indicating an incredibly busy commercial HY, | Clinical and Consumer Marketing. All three have had a | ||||
we also recognize that a focus for many of our employees | tremendous early impact on the business, delivering on | ||||
a number of key initiatives with more well underway. | |||||
and investors is impact. With coverage now of over 13.4M | |||||
US women with at least one of our products, it is clear we | We said farewell to some longstanding employees. In | ||||
are helping many women get safer, more comfortable, and | September, Mark Morris retired after serving for over | ||||
more accurate breast cancer screenings. Results from | 22 years first as CEO of MRS Systems, Inc., and then | ||||
studies like the DENSE trial show that such screenings | as Executive Vice-President of Customer Success for | ||||
lead to significant increases in the numbers of cancers | Volpara since the acquisition. We thank Mark for his | ||||
caught early. Furthermore, we continue to work with | contribution and wish him well in his retirement. | ||||
For | |||||
1 Reconciliation to Normalised non-GAAP EBITDA | HY21 | HY22 | Change | ||
IFRS Net Loss Before Interest and Tax | (9,837) | (8,969) | -9% | ||
Business acquisition- and merger-related expenses | 196 | 33 | -83% | ||
Share-based payments expense | 732 | 534 | -27% | ||
Depreciation and amortisation | 1,459 | 2,245 | 54% | ||
(Gains)/losses on foreign exchange transactions | 261 | (432) | -262% | ||
Revenue adjustment | 522 | 171 | -67% | ||
Retention plan costs | - | 2,540 | 100% | ||
PPP loan forgiveness | - | (2,478) | -100% | ||
Bad debts written off | 23 | (3) | -113% | ||
Non-GAAP earnings before tax, depreciation, amortisation, impairment, | (6,644) | (6,350) | -4% | ||
one-off items, and non-cash items | |||||
We also said farewell to Dr Monica Saini, who stepped down from her position as director, begun in 2018, to pursue her new venture, Breast Institute of New Zealand- the first clinic in Volpara's backyard to use Volpara® Scorecard™ software to inform women of their density. We thank Monica for her contribution. We also welcome a new addition to the board, Ann Custin, former CFO and board director of Siemens Medical Solutions.
We continue to integrate CRA Health, LLC, into the wider Volpara family. As we did with the MRS acquisition, we are taking a very careful and considered approach to the integration to ensure we are
setting up the Company for long-term success.
Last year at this time, Volpara completed a major reworking of the underlying on-site product architecture to allow it to scale much more easily and cost-effectively as the Company's footprint grows. This year, that focus on scalability has come to fruition with the worldwide September 2021 release of the significantly upgraded version 3.0 of Volpara's key cloud product, Volpara® Analytics™. This roll-out is due to be completed at about the time this report is published. The upgrade includes significantly enhanced user interface (UI) and user experience (UX) features, among other updates. Importantly, it also includes a number of back-end changes that allow for vastly improved scalability and a materially reduced cost to serve. This release has been an all- Company effort and places our market-leading product in good stead as we continue to innovate in this space.
Operating costs have increased year on year, largely because of the acquisition of CRA and a number on non-cash costs that result from acquisitions (e.g., amortisation). After accounting for CRA's addition to the Group's costs base, Volpara's costs, on a constant currency basis, have reduced slightly (approx. 4%) when compared with the prior period, showing the underlying scalability of the existing cost base.
Cash receipts have remained strong with both Q1 and Q2 delivering consecutive record growth as we accelerate out of COVID. For HY22, Group cash receipts increased by over 40% to NZ$13.5M (or 48% in constant currency) compared with NZ$9.6M in the prior period. As we continue the transition to Software as a Service (SaaS), cash receipts from subscriptions increased approx. 50% to NZ$13.1M compared with NZ$8.6M in the prior period; whereas receipts from Capital sales decreased approx. 55% to NZ$0.5M compared with NZ$1.1M in the prior period.
With $25M in the bank, no debt, a strong sales pipeline and access to capital markets, we remain in a good financial position.
The SaaS metrics have continued to show solid growth, with ARR increasing from US$18.6M to over US$20.4M since the end of FY21. Average Revenue Per User (ARPU) continued to increase steadily over the period, from US$1.40 to over US$1.46 (an increase of over 4%). US market share has also increased from a little over 32% at end FY21 to over 34% at the end of H1FY22. This shows growth not only from within our existing customer base but also from new customers. Importantly, these results have been driven not by any single product, but by a mix of products across the entire portfolio. Platform sales have also contributed, including various product configurations, allowing us to meet our customers' needs while providing the business with upsell opportunities in future as our customers grow with us.
Additional highlights of this HY include the following:
- The Company made an initial investment into RevealDx, a lung AI company based in Seattle, and signed a collaboration agreement with Riverain Technologies, also US based, positioning Volpara for lung market expansion.
- Volpara entered into collaboration agreements with Natera and Invitae, both leaders in the genetic testing market. This adds to the Company's existing agreements with Ambry and Myriad and allows Volpara customers a choice of service provider.
- BreastScreen South Australia, after almost two years of COVID-related delays, have announced a breast density research project using Volpara for the public screening programme in that state. This is set to launch in early February 2022. Once established, every breast imaging site in both public and private screening in South Australia will be using Volpara.
- Volpara reached the milestone of 200 peer-reviewed articles. This is an outstanding achievement and clearly sets the Company apart from the competition. It demonstrates Volpara's commitment to providing the most clinically validated breast density software available and the continual investment
in research and development of core IP. - The Company successfully piloted "Project Thumb", which is a move towards empowering women with breast density information by including their images directly into their letters. In conjunction with that we also launched a consumer facing breast density website.
- The Company achieved a new SOC certification for CRA, confirmation that its control set meets the SOC 2 Security Criteria standard for the six-month period evaluated.
- Volpara achieved MDSAP and ISO27001 certification. These key audits validate the Company's commitment to regulatory and security standards.
Volpara Health Half Year Report 2021
6
7
Auditor's independence declaration
onlyOutlook
Volpara is focused on delivering the revenue guidance given at the start of this financial year, namely NZ$25-26M.
However, we are also continuing to build out key strategic initiatives, including, amongst others, the following:
• Analytics in Action™. This client-centred service,
use | exclusively for customers of Volpara Analytics, is |
designed to help breast imaging facilities develop a | |
culture of continuous performance improvement and | |
recognise technologists that meet quality benchmarks | |
as objectively measured by Analytics, the leading | |
software for providing automated and objective | |
assessment of image quality on every mammogram. | |
The program provides personalised, hands-on training | |
delivered by positioning experts Mammography | |
personal | Educators, further differentiating the Analytics product |
while potentially increasing staff engagement, customer | |
retention, and ARPU. Analytics in Action is set to begin | |
a pilot program with several customers and in late | |
November will be a highlight of Volpara's at RSNA, the | |
world's largest radiology conference, in Chicago. | |
• Volpara Club™. The goal of Volpara Club is to provide | |
customers with an integrated, relevant, and engaging | |
digital experience that leads to their long-term | |
success-clinical, financial, and operational-and | |
results in retainment, expansion, and advocacy. The | |
desired outcome is to ensure churn remains low, | |
generate upsell and expansion opportunities, and | |
nurture advocates to support new customer acquisition. | |
Delivered via a branded online platform, the Volpara | |
Club community will allow customers to obtain expert | |
support from customer coaches, provide product | |
feedback, access tools for marketing their services | |
For | to patients and primary care physicians, participate |
in focus groups and user forums, and more. | |
• Expanding the Electronic Health Record (EHR) sales channel. Volpara Strategic Advisor Teri Thomas, previously an Epic executive, is leading the effort to strengthen this channel and leverage CRA Health's expertise in EHR.
• Building out Volpara's data platform. With over 49M images in the cloud, we have one of the world's biggest data sets of breast x-rays.We continue to bring commercial value to the Company by using this data set, and continually look to expand its scientific value beyond images that match up with the data collected by our whole platform. The data set is the key to our efforts to change the paradigm of screening from detection to prevention.
We also continue to await the release of the FDA's breast density legislation, delayed due to COVID, US elections, and the subsequent change of administration. The latest news we have (25 October 2021) is that the FDA is working diligently in this area. We also note that a new FDA Commissioner has now been nominated.
We have an incredibly busy and exciting few months ahead of us as we head to Chicago for RSNA, and then look to complete Q3 and Q4, which are traditionally our biggest quarters.
Dividends
No dividends have been paid or proposed.
Events subsequent to balance date
No matters or circumstances have arisen since the end of the period which have significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future years.
Paul Reid | Ralph Highnam, PhD |
Chair | Chief Executive Officer |
Dated this 23rd November 2021 |
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out below.
Auditor's Independence Declaration
As lead auditor for the review of Volpara Health Technologies Limited for the half-year ended 30
September 2021, I declare that to the best of my knowledge and belief, there have been:
- no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
- no contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Volpara Health Technologies Limited and the entities it controlled during the period.
Kevin Brown | Wellington |
Partner | 23 November 2021 |
PricewaterhouseCoopers |
PricewaterhouseCoopers, PwC Centre, 10 Waterloo Quay, PO Box 243, Wellington 6140, New Zealand
T: +64 4 462 7000, pwc.co.nz
Volpara Health Half Year Report 2021
8
Consolidated statement of profit or loss and other comprehensive income
for the six months ended 30 September 2021
only | 2021 | 2020 | ||
Unaudited | Unaudited | |||
Notes | NZ$'000 | NZ$'000 | ||
REVENUE | ||||
Revenue from contracts with customers | 4 | 12,323 | 9,465 | |
Cost of revenue | 5 | (1,059) | (783) | |
Gross profit | 11,264 | 8,682 | ||
use | ||||
Government grants and other operating income | 11 | 2,506 | 1,001 | |
Sales and marketing | 5 | (6,652) | (6,518) | |
Product research, development, and engineering | 5 | (7,702) | (7,218) | |
General and administration | 5 | (8,808) | (5,523) | |
Foreign exchange gains/(losses) | 423 | (261) | ||
personal | ||||
Net loss for the period before interest and tax | (8,969) | (9,837) | ||
87 | 389 | |||
Finance income | ||||
Finance expense | (76) | (92) | ||
Net loss for the period before tax | (8,958) | (9,540) | ||
Income tax benefit | 448 | 675 | ||
Net loss for the period after tax | (8,510) | (8,865) | ||
OTHER COMPREHENSIVE INCOME | ||||
Net loss for the period | (8,510) | (8,865) | ||
Other comprehensive income/(expense) | ||||
Items that may be reclassified subsequently to profit or loss (net of tax): | ||||
Exchange differences on translation of foreign operations | 108 | (1,885) | ||
Other comprehensive (expense)/income for the period (net of tax) | 108 | (1,885) | ||
For | Total comprehensive loss for the period, net of tax | (8,402) | (10,750) | |
Basic and diluted loss per share (NZ$) | 6 | (0.03) | (0.04) | |
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
9 | |||
Consolidated statement | |||
of financial position | |||
as at 30 September 2021 | As at 30 | As at 31 | |
September | March | ||
2021 | 2021 | ||
Unaudited | Audited | ||
Notes | NZ$'000 | NZ$'000 | |
ASSETS | |||
Non-current assets | |||
Fixed assets | 629 | 720 | |
Intangible assets | 9 | 46,543 | 46,426 |
Right-of-use assets | 2,536 | 2,686 | |
Contract costs | 2,284 | 1,753 | |
Deferred tax assets | 266 | 80 | |
Investments | 10 | 362 | - |
Total non-current assets | 52,620 | 51,665 | |
Current assets | |||
Cash and cash equivalents | 12,269 | 7,873 | |
Cash on deposit | 12,761 | 24,357 | |
Trade receivables | 8,499 | 7,754 | |
Contract assets | 795 | 862 | |
Prepayments and other receivables | 1,949 | 1,608 | |
Inventory | 53 | 53 | |
Contract costs | 627 | 442 | |
Total current assets | 36,953 | 42,949 | |
Total assets | 89,573 | 94,614 | |
EQUITY AND LIABILITIES | |||
Equity | |||
Share capital | 6 | 181,066 | 180,678 |
Share option reserve | 7 | 4,132 | 3,759 |
Foreign currency translation reserve | (1,475) | (1,583) | |
Accumulated losses | (118,567) | (110,057) | |
Total equity | 65,156 | 72,797 | |
Non-current liabilities | |||
Employee entitlements | - | 856 | |
Lease liabilities | 2,208 | 2,416 | |
Borrowings | 11 | - | 486 |
Deferred tax liabilities | 7 | 281 | |
Total non-current liabilities | 2,215 | 4,039 | |
Current liabilities | |||
Trade and other payables | 7,855 | 3,872 | |
Deferred revenue | 13,788 | 11,434 | |
Lease liabilities | 559 | 483 | |
Borrowings | 11 | - | 1,989 |
Total current liabilities | 22,202 | 17,778 | |
Total liabilities | 24,417 | 21,817 | |
Total equity and liabilities | 89,573 | 94,614 |
For and on behalf of the Board, who authorised the issue of these consolidated interim financial statements on 23 November 2021.
Ralph Highnam | John Diddams |
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Volpara Health Half Year Report 2021
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Volpara Health Technologies Ltd. published this content on 22 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 November 2021 21:46:08 UTC.