By: Tomas Ronolski - AllPennyStocks.com News

Tuesday, June 18, 2013

Many, if not most, junior companies have market capitalizations that far exceed revenue. For developmental firms, the key is generally the potential for future sales, not the actual. To that end, coming across one with sales exceeded market cap is a reason to pause and evaluate. On Tuesday, Victoria, British Columbia-based Vigil Health Solutions Inc. (TSX-Venture:VGL), a healthcare technology company focused on the senior housing market, released its financials for the fourth quarter and fiscal year, ended March 31. The company has a diversified portfolio of products for the sector, including wireless Vitality Care System with mini pendants, a nurse call system, mobile fall, incontinence monitoring, resident check-in and the Vigil Dementia System.

Vigil’s target population, so-called baby boomers (generally regarded as the group of people born between 1946 and 1964), represents the fastest growing population in the U.S., as of 2011, the first leg of baby boomers turned 65. With people living longer, the need for care of this group of people could have a substantial impact on the country, presenting companies in the senior care facility business and Vigil in a nice position for growth.

In the fourth quarter, Vigil reported net sales of $1.14 million, up from $901, 674 in the year earlier quarter. Income for the quarter was $50,756, swinging to a profit from a loss of $50,048 in the fourth quarter of 2012, as cost of sales didn’t increase at the same rate as growing revenue.

For the year, the company posted revenue of $3.74 million, up 11 percent from $3.37 million in fiscal 2012. Net income for fiscal 2013 was $152,326, or 1.2 cents per share, versus a net loss of $424,724, or 3.6 cents per share, the year earlier. At current prices, Vigil is trading at less than 12 times earnings.

Operating expenditures in the recent year were lowered by 14 percent from 2012 to $1.69 million. Gross margin percentage improved to 49 percent for the year, compared to 46 percent in 2012.

Sales bookings for fiscal 2013 rose to $4.41 million from $3.73 million at the end of fiscal 2012. Vigil’s backlog at the end of March soared 88 percent as compared to the year earlier to $3.62 million.

The fact is that the elderly population in North America is growing quickly. Vigil provides a wide array of solutions whether through proprietary technology of through third parties. Sales were gaining steam in the fourth quarter and for the full fiscal year, meaning that perhaps investors will be looking more closely at operational performance in this quarter and going forward. Vigil has a paltry market capitalization of only $2.37 million – and that’s only because shares climbed 40 percent on Monday, otherwise the market cap was less than $1.7 million. With less than $17 million shares outstanding, trading is very thin for this junior, but the 30,000-foot view begs for a more refined look in the near future. Proper due diligence is, as always, encouraged.

In Tuesday action following the earnings news, shares are even at 14 cents.

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