ARCpoint Inc. (TSXV: ARC) (the “
Company” or
“
ARCpoint”) a leading US-based franchise system
and healthcare company providing drug testing, alcohol screening,
DNA and clinical lab testing services announced today that it is
undertaking a realignment of its business units and operations to
effect cost savings, given reduced revenues and better align its
structure with business development activities.
ARCpoint CEO, John Constantine commented, “Over
the last two years our corporate efforts have been focused on
developing our technology platform, processes, and franchisee
network. While we continue to have a focus on building out our
franchisee network, it is now time to transition from the
development of tools and operational processes to a focus on
driving more business through our current 130 franchisee locations
as well as other channels, while at the same time reducing our
monthly cash burn.”
Effective April 1, 2023, the Company is enacting
a headcount reduction representing approximately 30% of the
Company’s salary costs. The majority of these cuts will take place
at the upper management and executive levels, allowing the Company
to continue to serve its franchisees with the same direct contacts.
It is expected that after accounting for severance costs and any
needed new hires, this will represent cost savings of over
two-hundred thousand dollars in 2023, with annualized savings of
over eight-hundred thousand dollars going forward. All dollar
figures in this release are stated in US dollars.
The Company announced that as part of the
Company’s realignment, Dano Jukanovich, ARCpoint’s COO, will be
leaving the Company effective April 1, 2023.
Mr. Constantine stated, “We are grateful to all
the leaders who have helped us get to this point. We would not be
where we are today without their leadership in developing the
financial, operating and marketing teams that will be driving us
forward. In particular, we would like to say a special thanks to
Dano, who has been instrumental in helping drive the Company
forward and complete our 2022 reverse takeover of RSI International
Systems to become a public company.”
As part of the cost-cutting process, the Company
has undertaken a thorough audit of its operations and identified
operational cost-saving measures representing approximately 20% of
current operating costs.
ARCpoint has been a tremendous financial
beneficiary of the COVID pandemic. The increased revenue from COVID
testing and the successful completion of the previously announced
reverse take-over transaction of RSI International Systems Inc. and
concurrent financing, have helped the Company fund significant
improvements to its traditional core business services and
offerings with the creation of an integrated technology platform
comprised of MyARCpointLabs and Total Reporting. The MyARCpointLabs
portal for direct to consumer testing and deployment in alternative
channels, is expected to be transformative in how consumers will be
able to find and order the clinical tests that are available within
the ARCpoint system. Total Reporting, the Company’s Business to
Business portal, will allow ARCpoint’s franchisees to market more
services, such as background checks and employer physicals through
a more efficient, integrated platform. Both MyARCpointLabs and
Total Reporting are expected to be launched in the second quarter
of 2023.
Preliminary Q4
Financial Results of ARCpoint
GroupARCpoint is in the process of finalizing its Q4 and
year end 2022 financial results in conjunction with its auditors
and announces the following expected, preliminary unaudited
consolidated financial results. Management intends to disclose more
preliminary results for the interim and annual periods ended
December 31, 2022 as they become available. All dollar figures for
the results below are reported for ARCpoint Group under
International Financial Reporting Standards and in US dollars.
- Total revenue for the three months
ended December 31, 2022 is anticipated to be around $1.3 million
compared to $5.8 million for the three months ended December 31,
2021. During Q4 2021, high complexity PCR testing and low
complexity rapid tests volumes were higher due to the COVID
pandemic.
- Total revenue for the year ended
December 31, 2022 is anticipated to be around $10.9 million
compared to $19.2 million for the year ended December 31, 2021. The
COVID pandemic resulted in a significant rise in testing revenue
for ARCpoint, including revenue from both high complexity PCR
testing and low complexity rapid tests.
The financial information contained in this
press release relating to the interim and annual periods ended
December 31, 2022 is preliminary and is based on the latest
unaudited management accounts for the twelve-months ended December
31, 2022. The information contained in this press release has not
been, and is not based on information that has been audited or
reviewed by ARCpoint’s independent auditor. Investors are cautioned
not to place undue reliance on these preliminary estimates.
About
ARCpoint
Inc.ARCpoint is a leading US-based franchise system and
healthcare company providing drug testing, alcohol screening, DNA
and clinical lab testing, corporate wellness programs, and
employment and background screening, among other services. The
Company is based in Greenville, South Carolina, USA. ARCpoint
Franchise Group LLC, formed under the laws of the state of South
Carolina in February 2005, is the franchisor of ARCpoint Labs and
supports 130 independently owned locations. ARCpoint sells
franchises to individuals throughout the United States and provides
support in the form of marketing, technology and training to new
franchisees. ARCpoint Corporate Labs LLC develops corporate-owned
labs committed to providing accurate, cost-effective solutions for
customers, businesses and physicians. AFG Services LLC serves as
the innovation center of the ARCpoint group of companies as it
builds a proprietary technology platform and a physician network to
equip all ARCpoint labs with best-in-class tools and solutions to
better serve their customers. The platform also digitalizes and
streamlines administrative functions such as materials purchasing,
compliance, billing and physician services for ARCpoint franchise
labs and other clients.
For more information, please contact:
ARCpoint Inc.Jason Tong, Chief Financial Officer
Phone: (604) 889-7827E-mail: invest@arcpointlabs.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION:Preliminary and unaudited financial results herein are
subject to customary financial statement procedures by the Company
and its auditors. Actual results could be affected by subsequent
events or determinations. While the Company believes there is a
reasonable basis for these preliminary financial results, the
results involve known and unknown risks and uncertainties that may
cause actual results to differ materially. These preliminary fiscal
results represent forward-looking information.
Financial Outlook - this news
release contains a financial outlook within the meaning of
applicable Canadian securities laws. The financial outlook has been
prepared by management of the Company to provide an outlook for
ARCpoint Group’s forecasted revenue for the Q4 2022 ended December
31, 2022 and may not be appropriate for any other purpose. The
financial outlook has been prepared based on a number of
assumptions including the assumptions discussed under the heading
“Forward Looking Information” below. The actual results of the
Company’s operations for any period will likely vary from the
amounts set forth in these projections and such variations may be
material. The Company and its management believe that the financial
outlook has been prepared on a reasonable basis. However, since
this information is highly subjective and subject to numerous
risks, including the risks discussed under the heading “Forward
Looking Information” below, it should not be relied upon as
necessarily indicative of future results.
Future Looking Information –
this news release contains “forward-looking information” within the
meaning of applicable Canadian securities laws which are based on
ARCpoint’s current internal expectations, estimates, projections,
assumptions and beliefs and views of future events. Forward-looking
information can be identified by the use of forward-looking
terminology such as “expect”, “likely”, “may”, “will”, “should”,
“intend”, “anticipate”, “potential”, “proposed”, “estimate” and
other similar words, including negative and grammatical variations
thereof, or statements that certain events or conditions “may”,
“would” or “will” happen, or by discussions of strategy.
Forward-looking information included in this press release
includes, but is not limited to, statements in respect to the
Company’s forested financial results for ARCpoint Group’s Q4
interim period ended December 31, 2022 and the expected timeline
for deploying ARCpoint’s online portals.
The forward-looking information in this news
release is based upon the expectations, estimates, projections,
assumptions and views of future events which management believes to
be reasonable in the circumstances. Forward-looking information
includes estimates, plans, expectations, opinions, forecasts,
projections, targets, guidance or other statements that are not
statements of fact. Froward-looking information necessarily involve
known and unknown risks, including, without limitation, risks
associated with general economic conditions; adverse industry
events; loss of markets; future legislative and regulatory
developments; inability to access sufficient capital from internal
and external sources, and/or inability to access sufficient capital
on favourable terms; the ability of the Company to implement its
business strategies, the COVID-19 pandemic; competition and other
risks.
Any forward-looking information speaks only as
of the date on which it is made, and except as required by law, the
Company does not undertake any obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise. New factors emerge from
time to time, and it is not possible for the Company to predict all
such factors. When considering the forward-looking information
contained herein, readers should keep in mind the risk factors and
other cautionary statements in the Company’s disclosure documents
filed with the applicable Canadian securities regulatory
authorities on SEDAR at www.sedar.com. The risk factors and other
factors noted in the disclosure documents could cause actual events
or results to differ materially from those described in any
forward-looking information.
Neither the Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
Exchange) accepts responsibility for the adequacy or accuracy of
this Press release.
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