MISSION VIEJO, CA--(NewMediaWire - Nov 9, 2016) - Auxilio, Inc.
(OTCQB: AUXO),
a leading provider of complete Document Solutions and IT Security
for the healthcare industry, today announced financial results for
the third quarter ended September 30, 2016.
Financial and operational highlights for the third quarter of
2016 include:
Net Income for the quarter was $0.7 million or $0.03 per basic
and diluted share compared to net income of $0.5 million or $0.02
per basic and diluted share in the third quarter of 2015.
- Adjusted income from operations for the third quarter, which
excludes charges related to stock-based compensation and
amortization of intangibles, was $1.0 million compared to $0.9
million in the third quarter of 2015.
- Gross Margin was 23% for the third quarter compared to 18% in
the third quarter of 2015 and 20% in the second quarter of
2016.
- Revenues for the quarter were $14.3 million, a decrease of 9%
from $15.7 million in the third quarter of 2015. Excluding a
decrease of $1.4 million of equipment sales, which are ancillary to
our core business, revenues were flat year over year.
- At September 30, 2016, the Company had $5.4 million in cash and
$4.4 million in working capital.
- During the quarter the Company completed the first successful
cross-sell of the full breadth of our security offering, including
our assessment and consulting services to an existing Document
Solutions customer.
Joseph J. Flynn, President and CEO commented, "I am pleased with
our operational performance for the quarter, as we posted strong
bottom line results while also executing on strategic initiatives
laid out earlier in the year. With the demand from major health
systems to find solutions to reduce costs, improve efficiency and
offer greater IT security, we are pursuing significant
opportunities to expand our product and service offerings with high
margin revenue streams that are recurring in nature." Flynn
continued, "As we continue diversifying our revenue streams, we are
targeting greater consistency in our profitability levels over
time. Our vision is to create a company that is a leading
provider of total document workflow solutions and security services
for the healthcare sector and we continue making solid progress
with that endeavor."
Financial Results for the three and nine months ended September
30, 2016
For the three months ended September 30, 2016, the Company
reported revenues of $14.3 million, a decrease of 9% when compared
to $15.7 million reported in the third quarter of 2015. The
addition of $1.5 million of new recurring service revenue contracts
was offset by reductions of approximately $1.5 million due to
volume reductions and terminated services. Equipment revenues in
the third quarter were $0.2 million compared to approximately $1.6
million in the third quarter of 2015.
Cost of revenue was $11.1 million, compared to $12.9 million in
2015. The Company incurred approximately $0.6 million less in
staffing costs, including contract labor, and incurred
approximately $0.1 million in additional service and supply costs,
primarily as a result of new customers. Equipment costs
decreased by approximately $1.2 million, largely as a result of the
decrease in equipment revenues. Gross profit for the third
quarter of 2016 was $3.2 million, or 23% of revenues, compared to
$2.9 million or 18% of revenues, for the same period in 2015. The
increase in gross margin is due to the maturation of previously
announced new services contracts.
Operating expenses for the third quarter were $2.5 million, an
increase of $0.2 million compared to the third quarter of 2015.
Sales and marketing expenses decreased by 5% due to decreased
marketing spend when compared to the same period in 2015. General
and administrative expenses increased 12% to $1.8 million due to
approximately $50,000 more in rent paid from our move to a larger
office in 2016 and approximately $150,000 of non-recurring expenses
related to consulting fees for strategic initiatives.
Net income for the three months ended September 30, 2016, was
$0.7 million, or $0.03 per basic and diluted share, compared to net
income of $0.5 million, or $0.02 per basic and diluted share, in
the same period of 2015. The Company achieved an adjusted income
from operations of $1.0 million in the third quarter of 2016,
compared to an adjusted income from operations of $0.9 million in
the third quarter of 2015 after excluding charges of $0.2 million
and $0.3 million respectively, related to stock-based compensation
and amortization of intangibles.
For the nine months ended September 30, 2016, the Company
reported revenues of $44.0 million, a decrease of 3% compared to
$45.2 million reported in the same period of 2015. The Company
added approximately $3.4 million of net new recurring service
revenue contracts, offset by a decrease of $4.6 million in
equipment revenue, compared to the same period in 2015.
Cost of revenue was $35.4 million compared to $38.1 million in
2015 representing a decrease of 7% or $2.7 million. Gross profit
for the nine months ended September 30, 2016, was $8.6 million, or
20% of revenues, compared to $7.1 million, or 16% of revenues, for
the same period in 2015.
Operating expenses for the nine months ended September 30, 2016,
were $7.3 million, an increase of 1% from $7.2 million in the same
period of 2015. Sales and marketing expenses decreased by 9% due to
lower compensation expense and reduced marketing spend. General and
administrative expenses increased 6% to $5.2 million due to
increased rent and non-recurring consulting fees.
Net income for the nine months ended September 30, 2016 was $1.2
million, or $0.05 per basic and diluted share, compared to a net
loss of $0.2 million, or $0.01 per basic and diluted share, in the
same period of 2015. Excluding $0.6 million in charges related to
stock based compensation and amortization of intangibles, the
Company achieved an adjusted income from operations of $1.9 million
for the nine months ended September 30, 2016, compared to adjusted
income from operations of $0.7 million, after excluding charges of
$0.7 million related to stock-based compensation and amortization
of intangibles for the same period in 2015.
At September 30, 2016, the Company had $5.4 million of cash and
cash equivalents and working capital of $4.4 million.
Conference Call Information
Date: Wednesday, November 9, 2016
Time: 1:30pm PT, 4:30 pm
ET
US: 1-888-778-9065
International: 1-913-312-0497
Conference ID: 3320086
Webcast: http://public.viavid.com/index.php?id=121713
A replay of the call will be available
from 7:30pm
ET on November 9,
2016 to 11:59 pm
ET on November 24, 2016. To
access the replay, please dial 1-844-512-2921 from
the U.S. and 1-412-317-6671 from
outside the U.S. The PIN is 3320086.
About Auxilio, Inc.
Since 2004, over 220 of the nation's leading hospitals and health
systems have turned to Auxilio to solve broken document and digital
workflow processes. Auxilio's Document Solutions are proven to
reduce waste, safeguard PHI, and improve operational efficiency
while driving incredible cost savings for a healthcare
organization. Auxilio delivers its proven results through its core
services lines, Managed Print Services, Document Consulting and
iPLATFORM, an intelligent workflow automation suite.
Auxilio's Managed Print Services' business model is vendor
neutral, provides full-time, on-site customer service and technical
experts while guaranteeing 20% cost savings starting day-one of the
contract. Auxilio's Document Consulting analyzes and remediates
inefficient document workflow programs bringing transparency of
what is printed, by department, by user and how much to find
opportunities for process improvement and increased security for
HIPAA compliance. iPLATFORM, helps make clinical and administrative
tasks easier and faster, improving the patient experience by 50%,
creating a 99% registration accuracy rate and producing practical
cost-effective digital workflows, eliminating 90% of fax
documents.
Auxilio's cybersecurity arm, Redspin, helps hospitals, health
systems and Business Associates find and fix network and
application security issues. Their fully
comprehensive portfolio of services and technology include HIPAA
security risk assessments, penetration testing, risk and compliance
consulting and a SaaS technology solution, Delphiis ™ IT Risk
Manager.
For more information about Auxilio, visit http://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, expectations relating to momentum of
the business, expectations of increased demand for Auxilio's
services, growth of Auxilio's vertical framework, anticipated
results from cross-selling efforts, growing demand for Auxilio's
MPS programs, 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.