AUXILIO Inc. Reports Full Year 2013 Financial Results

MISSION VIEJO, Calif.--()--AUXILIO, Inc. (AUXO) (“AUXILIO” or “the Company”), the nation’s pioneer and leading Managed Print Services (MPS) company for health care, today reported financial results for the year ended December 31, 2013.

Highlights

  • Increased 2013 revenues 21% to $43.0 million; service revenues increased 22% to $37.1 million
  • Achieved operating income margins of 4% in FY 2013 vs. (5%) in FY 2012
  • Generated $2.6 million of cash flows from operations in 2013, up from -$30,000 in 2012
  • Added three new recurring revenue contracts during 2013 and three more since December 31, 2013

“I am pleased with the progress we made in 2013,” stated Joseph J. Flynn, president and CEO of AUXILIO, Inc. “We continue to deliver value to our clients by streamlining their business processes and helping them become more efficient across their entire print services functions. Our pipeline of potential new clients remains strong as we see tremendous opportunities to provide value added services to existing and new clients.”

Financial Results

For the twelve months ended December 31, 2013

For the twelve months ended December 31, 2013, the company reported revenues of $43.0 million, an increase of 21% when compared to $35.6 million in the same period in 2012. Recurring service revenues increased 22% from nine new contracts implemented in 2012 and 2013 and expansion of services with existing customers.

Cost of revenue was $35.3 million, an increase of 14% compared to $31.0 million in 2012. The increase in the cost of revenues is attributed primarily to staffing and service costs to support the new and expanded recurring service contracts. Gross profit for the twelve months of 2013 was $7.7 million, or 18% of revenues, compared to $4.6 million or 13% for the same period of 2012. The gross margin improvement was a result of more contracts moving beyond the initial implementation phase, which require more upfront investment.

Operating expenses for 2013 were $5.9 million, a decrease of 6% from $6.3 million in 2012. Sales and marketing expenses fell by 19% due to the termination of a joint marketing agreement with a channel partner in 2013. General and administrative expenses increased 4% to $3.8 million due to additional staffing to handle the increase in transaction volume. The Company generated $1.8 million of operating income in 2013 compared to an operating loss of $1.6 million in 2012.

Net income for the twelve months ended December 31, 2013 was $1.3 million, or $0.06 fully diluted earnings per share, compared to a net loss of $2.4 million or $0.12 fully diluted loss per share, in the same period of 2012. The weighted average diluted shares outstanding increased to 22.8 million shares.

After excluding charges of $576,000 related to stock-based compensation and $190,000 in charges related to stock granted for marketing activities, non-GAAP measure of adjusted income from operations for the twelve months ended December 31, 2013 was $2.5 million or 6% of revenue compared to a loss of $759,000 or (2%) of revenue after excluding charges of $391,000 related to stock-based compensation and $480,000 in charges related to stock granted for marketing and consulting activities in the same period of 2012.

At December 31, 2013, the Company had $4.7 million of cash and cash equivalents, up $2.5 million from the same period a year ago. Cash provided by operating activities amounted to $2.6 million compared to $30,000 of cash used for operating activities during the same period in 2012. Working capital improved to $254,000 at December 31, 2013 compared to -$661,000 at December 31, 2012.

Paul Anthony, CFO of AUXILIO, stated: “We are pleased with the steady improvements in our cash flows and margins over the past five quarters. This reflects additions of recurring revenues from new and existing contracts and excellent cost controls. While we expect to incur higher costs at the start of our engagements with new customers as well as making additional investments in our business, we are confident in reaching our long term margin objectives.”

Business Updates

On January 13, 2014, AUXILIO announced a five-year MPS contract with the University of San Diego Health System with over 850 physicians and 565 beds. AUXILIO won this competitive bid as a result of their exceptional customer service reputation and guaranteed cost savings.

The Company secured a three-year service agreement with New Hanover Regional Medical Center (“New Hanover”), the largest health care provider in Wilmington, North Carolina in February 2014. The agreement covers New Hanover’s 729 beds and numerous specialty treatment centers located in the Wilmington region.

Beth Israel Deaconess Medical Center (“Beth Israel Deaconess”), a leading hospital in Boston, Massachusetts with 649 beds and 1,250 full time physicians, awarded a Managed Print Consulting services contract to AUXILIO in February 2014.

AUXILIO announced the hiring of Mark Dressel for the newly created position of Executive Vice President, Consulting and Managed IT Services Group on March 27, 2014. Mark’s role is to drive new sources of revenue from current and prospective customers through healthcare consulting, IT sourcing/outsourcing and other high demand offerings that enhance our position as a strategic healthcare IT service partner.

Conference Call Information

CEO Joe Flynn and CFO Paul Anthony will host a conference call with investors to discuss its full year 2013 earnings results.

Date:         Monday, March 31, 2014
Time: 5:00 pm ET
US: 877-941-1427
International: 480-629-9664
Conference ID: 4674877
Webcast:

http://public.viavid.com/index.php?id=108325

A replay of the call will be available from 8:00 pm ET on March 31, 2014 to 11:59 pm ET on April 14, 2014. To access the replay, please dial 877-870-5176 from the U.S. and 858-384-5517 from outside the U.S. The PIN is 4674877.

About AUXILIO, Inc.

AUXILIO is the pioneer of Managed Print Services for the healthcare industry, working exclusively with hospitals and hospital systems throughout the United States. A true Management Services company, AUXILIO streamlines systems and aligns processes and infrastructure for onsite print operations that reduce cost, increase productivity and meet and exceed customers’ patient care standards. AUXILIO also provides a wide range of healthcare consulting and managed IT services using the same focused approach on cost savings and operational efficiencies as their core managed print services business.

Founded in 2004, AUXILIO serves a national portfolio of over 100 hospital campuses and manages over 1.3 billion documents produced annually from more than 50,000 devices supporting over 250,000 caregivers. AUXILIO’s is independent, works with all print vendors, and provides full-time, on-site customer service and technical representatives.

For more information about AUXILIO, visit www.Auxilioinc.com.

Forward Looking Statements

This release contains certain forward-looking statements relating to the business of AUXILIO, Inc. that can be identified by the use of forward-looking terminology such as ``believes,'' ``expects,'' “anticipates,” “may” or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including uncertainties relating to product/services development, long and uncertain sales cycles, the ability to obtain or maintain patent or other proprietary intellectual property protection, market acceptance, future capital requirements, competition from other providers, the ability of our vendors to continue supplying the company with equipment, parts, supplies and services at comparable terms and prices and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our Form 10-K and Form 10-Q filings with the Securities and Exchange Commission, which are available at http://www.sec.gov. AUXILIO, Inc. is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

 
AUXILIO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
As of December 31,
  2013     2012  
ASSETS
Current assets:
Cash and cash equivalents $ 4,668,624 $ 2,190,972
Accounts receivable, net 3,856,791 4,693,660
Prepaid and other current assets 332,759 52,113
Supplies   967,354     1,059,730  
Total current assets 9,825,528 7,996,475
 
Property and equipment, net 160,709 227,004
Deposits 34,413 36,288
Loan acquisition costs 51,162 159,036
Goodwill   1,517,017     1,517,017  
Total assets $ 11,588,829   $ 9,935,820  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
 
Current liabilities:
Accounts payable and accrued expenses $ 5,057,339 $ 5,579,720
Accrued compensation and benefits 1,556,513 1,558,539
Line of credit 400,000 528,486
Deferred revenue 868,186 902,542
Convertible notes payable, net of discount of $82,250 at December 31, 2013 1,617,750 -
Current portion of capital lease obligations   71,933     88,645  
Total current liabilities   9,571,721     8,657,932  
 
 
Long-term liabilities:
Convertible notes payable, net of discount of $223,250 at December 31, 2012 - 1,576,750
Capital lease obligations, less current portion   46,558     79,358  
Total long-term liabilities   46,558     1,656,108  
 
Commitments and contingencies
 
Stockholders’ equity (deficit):
Common stock, par value at $0.001, 33,333,333 shares authorized, 20,643,966 shares issued and outstanding at December 31, 2013 and 19,818,642 shares issued and outstanding at December 31, 2012 20,645 19,820
Additional paid-in capital 23,491,490 22,491,361
Accumulated deficit   (21,541,585 )   (22,889,401 )
Total stockholders’ equity (deficit)   1,970,550     (378,220 )
Total liabilities and stockholders’ equity (deficit) $ 11,588,829   $ 9,935,820  
 
AUXILIO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
Year Ended December 31,
  2013       2012  
Net revenues $ 42,974,978 $ 35,647,021
Cost of revenues   35,294,204     31,018,117  
Gross profit   7,680,774     4,628,904  
Operating expenses:
Sales and marketing 2,112,285 2,604,783
General and administrative expenses   3,785,778     3,654,716  
Total operating expenses   5,898,063     6,259,499  
Income (loss) from operations   1,782,711     (1,630,595 )
Other income (expense):
Interest expense (436,476 ) (465,131 )
Interest income - 300
Other income 80,000 -
Change in fair value of derivative liabilities   -     (279,000 )
Total other income (expense)   (356,476 )   (743,831 )
 
Income (loss) before provision for income taxes 1,426,235 (2,374,426 )
Income tax expense   78,419     7,440  
Net income (loss) $ 1,347,816   $ (2,381,866 )
 
Net income (loss) per share:
Basic $ 0.07   $ (0.12 )
Diluted $ 0.06   $ (0.12 )
 
Number of weighted average shares outstanding:
Basic   20,259,776     19,589,978  
Diluted   22,843,480     19,589,978  

Contacts

MZ North America
Dustin Salem, SVP
Phone: 949-259-4998
Email: dustin.salem@mzgroup.us

Release Summary

AUXILIO Inc. Reports Full Year 2013 Financial Results

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Contacts

MZ North America
Dustin Salem, SVP
Phone: 949-259-4998
Email: dustin.salem@mzgroup.us