ARCPOINT INC. PROVIDES CORPORATE UPDATE ON COST CUTTING INITIATIVES AND PRELIMINARY FINANCIAL RESULTS
Greenville, South Carolina, March 08, 2023 (GLOBE NEWSWIRE) — 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 Group
ARCpoint 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) 889-7827
E-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.
