Mach7 awarded a Contract by Sentara for PACS modernization project

  • Mar 29, 2019 AEDT
  • Team Kalkine
Mach7 awarded a Contract by Sentara for PACS modernization project

Mach7 Technologies Limited (ASX: M7T), a company from the health care sector that specializes in innovative data management solutions for healthcare providers, announced that it had received a contract by Sentara Healthcare for its Picture Archive Communication System (PACS) modernization project.

In November 2018, the company made an announcement that it was selected by Sentara as its vendor of choice to provide Mach7 Diagnostic Studio as a part of the Picture Archive Communication System modernization project.

Now, the contract is being executed by the parties, and it includes a subscription license to Mach7 software that will help in generating an additional guaranteed minimum revenue of $420k annually in the form of subscription fee to the Mach7. The subscription fee along with the existing annual support fees will generate guaranteed annual subscription fees from Sentara worth $850K. In case the study volumes exceed the contracted minimums, there will be an increase in the subscription fees.

Further, this contract does not involve the cost of goods sold such as licensing of third-party products. Hence, the gross margin is 100%.

The collaboration between the parties has jointly developed an Imaging Innovations Lab at Sentara. This lab will provide an opportunity for the prospective customers of Mach7 to see the latest Mach7 software in use as well as in development. These customers will also have unique access to both technical as well as clinical resources providing transparency to the Mach7 PACS modernization platform which will enable them to take appropriate decisions.

On 11 March 2019, the company announced regarding the restructuring and cost-cutting program for accelerating the sales growth and sales delivery.

In the half-yearly results of FY2019, the company reported strong growth in the contracted annual recurring revenue by 64% to $7.2 million. The annual recurring revenue increased by 52% to $2 million.

However, the revenue during the period was down by 9% to $3.5 million. The company made a loss of $4.4 million, which increased by 31% as compared to its previous corresponding period.

Even though the company made a loss in the first half of FY2019, the company will continue to proceed towards the profitability, where the company will work to grow in annual recurring revenue base and also being efficient with the cost. For achieving this, the company aims to continue to win customers that will help in increasing the annual recurring revenue to support the underlying operations.

The total shareholders’ equity was worth $12,973,118. By the end of the half year, the net cash and cash equivalent with the company was worth $3,204,235.

In the last six months, the stock has generated a negative return of 14.63%. However, if we see the previous 5 years performance of the stock, the stock has given an excellent return of 775%.

On 29 March 2019, M7T is trading at A$0.177, up by 1.143% (As at 1:35 PM AEST). The company has a market capitalization of A$25.87 million with approximately 147.85 million outstanding shares.


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