TORONTO, ON / ACCESSWIRE / August 20, 2020 / NEXGENRX INC. (TSXV:NXG) ("NexgenRx" or the "Company") is pleased to announce its interim financial results for the quarter ended June 30, 2020.
Despite the many challenges arising due to the COVID-19 pandemic, Q2 2020 ended with excellent financial results for the Company, generating net income and EBITDA of $479,104 and $772,389 respectively, an increase of $514,042 and $529,083 over the second quarter of the prior year. The effects of COVID-19 (with the lockdown starting March 16th) impacted NexgenRx immediately and continues to drag down the Company's transaction revenue. Despite the revenue loss, the Company achieved its financial goals by aggressively managing variable expenses to match projected reduced revenue through its disaster containment strategy, which is made up of 3 distinct phases: Mobilize; Stabilize; and Strategize. Management took many important steps forward for the Company, centred around the health & safety of NexgenRx employees.
The effect of the pandemic on the second quarter ended June 30, 2020 was a significant decline in dental and extended health care ("EHC") transactions. Combined revenue in dental and EHC dropped by 61.8% compared to the same period last year. The performance of drug transactions has remained strong in the second quarter as pharmacies are deemed essential and remain open. The cost cutting measures implemented in the second quarter resulted in a 21.2% drop in operating expenses compared to the same period last year, which has allowed NexgenRx to remain cash flow positive. Management is ensuring the Company's customers continue to receive the level of services they expect while keeping the Company's expenses under control.
Management evaluated the eligibility criteria for the newly enacted Canada Emergency Wage Subsidy (CEWS) program. NexgenRx did not qualify for the first period, but qualified for the second to fourth periods that ran from April 12 - July 4. The government of Canada has now extended the wage subsidy program and management expects the Company to qualify for the new reduced programs as Company revenue slowly returns.
"In the past quarter, as a result of the COVID-19 pandemic, NexgenRx engaged in extensive consultations with all its stakeholders to identify priorities and areas of focus for the Company's revised COVID-19 2020 strategic plan. The issues, trends and challenges that evolved are common to all organizations both here in Canada and globally. It is evident that keeping up with the rapid changes in technologies, investment options and business models will provide both challenges and opportunities over the coming years. Under our revised 2020 strategic plan, we remain committed to supporting plan members with service of excellence and strengthening collaboration with key stakeholders," stated Ron Loucks, President & CEO.
About NexgenRx
NexgenRx is Canada's only independent full service technology solutions provider, offering proprietary full front end enrollment, 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 earnings and profitability statements, in addition to statements concerning the impact of the COVID-19 pandemic and the Company's responses thereto. 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.
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