MISSION VIEJO, CA -- (Marketwired) -- 08/08/16 -- Auxilio, Inc. (OTCQB: AUXO), a leading provider of complete Document Workflow Solutions and IT Security for the healthcare industry, today announced financial results for the second quarter ended June 30, 2016.
Financial and operational highlights for the second quarter of 2016 include:
- Net Income for the quarter was $0.6 million or $0.03 per basic and diluted share compared to a net loss of $0.6 million or $0.03 per basic and diluted share in the second quarter of 2015.
- Adjusted Income from Operations for the quarter was $0.9 million or $0.04 per basic and diluted share.
- Gross Margin was 20% for the second quarter compared to 14% in the second quarter of 2015 and 16% in the first quarter of 2016.
- Revenues for the quarter were $15.2 million, a decrease of 3% from $15.6 million in the second quarter of 2015 - excluding equipment sales, revenues grew 11%
- At June 30, 2016 the Company had $4.4 million in cash and $3.8 million in working capital.
- Entered into a partnership agreement with HealthWare Systems - expanding service offerings to include additional solutions for document workflow, patient registration, electronic signature and electronic forms.
- Added new and diverse skill sets to the Board of Directors with recent nominations - additional expertise to support growth and product expansion initiatives.
- Redspin Security Group received numerous contract wins from healthcare institutions for threat assessment services.
Joseph J. Flynn, President and CEO commented, "We were very pleased with both the fundamental performance and the progress made with our core strategic initiatives. We continue to provide leading technology and service solutions which drive inefficiencies out of our clients' operations, streamlining and securing their document workflow processes while guaranteeing cost savings." Flynn continued, "The partnership we entered with HealthWare Systems during the quarter was an excellent example of how we can further leverage the Auxilio platform, providing clients with additional cutting edge solutions across the entire document workflow lifecycle. We are a trusted partner on the front lines within some of the largest health systems in the country and we will continue to seek opportunities of this nature to expand and extend those customer relationships going forward."
CFO Paul Anthony added, "During the quarter we delivered solid services revenue growth and margins improved substantially. We are nearing completion of the implementation phase on the large contracts announced late last year and the costs associated with that process are abating, which should continue to support margins through the balance of the year."
Financial Results for the Three Months and Six Months Ended June 30, 2016
For the three months ended June 30, 2016, we reported revenues of $15.2 million, a decrease of 3% when compared to $15.6 million reported in the second quarter of 2015. The addition of $3.1 million of new recurring service revenue contracts was offset by reductions of approximately $1.8 million due to volume reductions and terminated services. Equipment revenues in the second quarter were $0.9 million compared to approximately $2.7 million in the second quarter of 2015.
Cost of revenue was $12.1 million, compared to $13.5 million in 2015. The Company incurred approximately $0.1 million in additional staffing costs, including contract labor, and approximately $0.1 million in additional service and supply costs, primarily as a result of new customers. Equipment costs decreased by approximately $1.6 million, largely as a result of the decrease in equipment revenues. Gross profit for the second quarter of 2016 was $3.1 million, or 20% of revenues, compared to $2.1 million or 14% of revenues, for the same period in 2015. The increase in gross margin is due to the maturation of previously announced large contracts.
Operating expenses for the second quarter were $2.4 million, a decrease of $0.4 million compared to the second quarter of 2015. Sales and marketing expenses decreased by 10% due to decreased marketing spend when compared to the same period in 2015. General and administrative expenses decreased 14% to $1.6 million. The decrease in general and administrative expenses is attributed to approximately $0.3 million of fees associated with the two acquisitions made in 2014 and 2015.
Net income for the three months ended June 30, 2016, was $0.6 million, or $0.03 per basic and diluted share, compared to a net loss of $0.6 million, or $0.03 per basic and diluted share, in the same period of 2015. The Company achieved an adjusted income from operations of $0.9 million or $0.04 per basic and diluted share in the second quarter of 2016, compared to an operating loss of $0.3 million or $0.01 per basic and diluted share in the second quarter of 2015, after excluding charges in both periods of $0.2 million related to stock-based compensation and amortization of intangibles.
For the six months ended June 30, 2016, the Company reported revenues of $29.7 million, a marginal increase when compared to $29.5 million reported in the same period of 2015. The Company added approximately $5.9 million of new recurring service revenue contracts, offset by a decrease of $3.2 million in equipment revenue, compared to the same period in 2015.
Cost of revenue was $24.3 million compared to $25.2 million in 2015 representing a decrease of 4% or $0.9 million. Gross profit for the six months ended June 30, 2016, was $5.4 million, or 18% of revenues, compared to $4.2 million, or 14% of revenues, for the same period in 2015.
Operating expenses for the six months ended June 30, 2016, were $4.8 million, a decrease of 1% from $4.9 million in the same period of 2015. Sales and marketing expenses decreased by 10% due to lower compensation expense and reduced marketing spend. General and administrative expenses increased 3% to $3.4 million due to amortization expenses from the acquisition of Redspin.
Net income for the six months ended June 30, 2016 was $0.5 million, or $0.02 per basic and diluted share, compared to a net loss of $0.7 million, or $0.03 per basic and diluted share, in the same period of 2015. The Company achieved an adjusted income from operations of $1.0 million or $0.04 per basic and diluted share for the six months ended June 30, 2016, compared to an adjusted loss from operations of $0.2 million or $0.01 per basic and diluted share, after excluding charges in both periods of $0.4 million related to stock-based compensation and amortization of intangibles.
At June 30, 2016, the Company had $4.4 million of cash and cash equivalents and working capital of $3.8 million.
Conference Call Information
Date: Tuesday, August 9, 2016
Time: 1:30pm PT, 4:30 pm ET
US: 1-888-221-9554
International: 1-913-312-1480
Conference ID: 3402154
Webcast: http://public.viavid.com/index.php?id=120629
A replay of the call will be available from 7:30pm ET on August 9, 2016 to 11:59 pm ET on August 24, 2016. To access the replay, please dial 1-877-870-5176 from the U.S. and 1-858-384-5517 from outside the U.S. The PIN is 3402154.
About Auxilio, Inc.
Since 2004, Auxilio provides solutions and services that address three critical areas hospitals are facing today. These areas include mitigating risk, reducing costs and providing operational efficiency. Auxilio's Managed Print Service and iPLATFORM, an intelligent workflow automation suite offers an innovative and customer driven approach for healthcare organizations to secure PHI, reduce waste and drive additional savings opportunities. Hospitals and health systems benefit from streamlined and aligned processes and infrastructure that results in a print avoidance program that reduces cost, increases employee productivity, and meet and exceed patient care standards.
Auxilio serves a national portfolio of nearly 220 hospital campuses and manages over 1.5 billion documents annually from over 90,000 devices supporting over 280,000 caregivers. Auxilio's Managed Print Services' business model is vendor neutral, provides full-time, on-site customer service and technical experts and is exclusive to the healthcare industry.
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.
AUXILIO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
JUNE 30, 2016 2015
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,449,013 $ 6,436,732
Accounts receivable, net 8,712,220 7,397,957
Supplies 1,326,764 1,458,609
Prepaid and other current assets 490,432 625,806
-------------- --------------
Total current assets 14,978,429 15,919,104
-------------- --------------
Property and equipment, net 543,824 495,324
Deposits 41,522 58,118
Intangible assets, net 2,460,417 2,731,250
Goodwill 3,665,656 3,665,656
-------------- --------------
Total assets $ 21,689,848 $ 22,869,452
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 7,756,823 $ 8,306,860
Accrued compensation and benefits 2,166,952 2,856,165
Deferred revenue 599,346 913,677
Current portion of long-term liabilities 609,125 598,750
-------------- --------------
Total current liabilities 11,132,246 12,675,452
-------------- --------------
Long-term liabilities:
Term loan, less current portion 1,000,000 1,250,000
Capital lease obligations less current
portion 82,313 125,496
-------------- --------------
Total long-term liabilities 1,082,313 1,375,496
-------------- --------------
Commitments and contingencies
Stockholders' equity:
Common stock, par value at $0.001,
33,333,333 shares authorized, 24,557,224
and 24,452,085 shares issued and
outstanding at June 30, 2016 and December
31, 2015, respectively 24,559 24,453
Additional paid-in capital 27,844,298 27,682,061
Accumulated deficit (18,393,568) (18,888,010)
-------------- --------------
Total stockholders' equity 9,475,289 8,818,504
-------------- --------------
Total liabilities and stockholders' equity $ 21,689,848 $ 22,869,452
============== ==============
AUXILIO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
2016 2015 2016 2015
------------ ------------ ------------ ------------
Revenues $ 15,162,070 $ 15,616,530 $ 29,677,709 $ 29,464,445
Cost of revenues 12,070,163 13,500,076 24,276,490 25,215,670
------------ ------------ ------------ ------------
Gross profit 3,091,907 2,116,454 5,401,219 4,248,775
------------ ------------ ------------ ------------
Operating expenses:
Sales and
marketing 730,149 808,816 1,401,496 1,550,888
General and
administrative
expenses 1,649,006 1,923,027 3,412,027 3,309,369
------------ ------------ ------------ ------------
Total operating
expenses 2,379,155 2,731,843 4,813,523 4,860,257
------------ ------------ ------------ ------------
Income (loss)
from operations 712,752 (615,389) 587,696 (611,482)
------------ ------------ ------------ ------------
Other income
(expense):
Interest expense (23,554) (34,347) (49,254) (68,397)
------------ ------------ ------------ ------------
Total other
income
(expense) (23,554) (34,347) (49,254) (68,397)
------------ ------------ ------------ ------------
Income (loss) before
provision for
income taxes 689,198 (649,736) 538,442 (679,879)
Income tax expense (41,600) - (44,000) (2,400)
------------ ------------ ------------ ------------
Net income (loss) $ 647,598 $ (649,736) $ 494,442 $ (682,279)
============ ============ ============ ============
Net income (loss)
per share:
Basic $ .03 $ (.03) $ .02 $ (.03)
============ ============ ============ ============
Diluted $ .03 $ (.03) $ .02 $ (.03)
============ ============ ============ ============
Number of weighted
average shares:
Basic 24,510,984 24,191,316 24,481,372 23,936,832
============ ============ ============ ============
Diluted 24,812,743 24,191,316 24,907,470 23,936,832
============ ============ ============ ============
AUXILIO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 2016
(UNAUDITED)
Additional Total
Common Stock Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
----------- -------- ------------ ------------ -------------
Balance at
December 31,
2015 24,452,085 $ 24,453 $ 27,682,061 $(18,888,010) $ 8,818,504
Stock
compensation
expense for
options and
warrants
granted to
employees and
directors - - 102,192 - 102,192
Stock options
and warrants
exercised 105,139 106 60,045 - 60,151
Net income - - - 494,442 494,442
----------- -------- ------------ ------------ -------------
Balance at
June 30, 2016 24,557,224 $ 24,559 $ 27,844,298 $(18,393,568) $ 9,475,289
=========== ======== ============ ============ =============
AUXILIO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended June 30,
--------------------------
2016 2015
------------ ------------
Cash flows from operating activities:
Net income (loss) $ 494,442 $ (682,279)
Adjustments to reconcile net income (loss) to
net cash (used for) provided by operating
activities:
Depreciation 101,854 71,830
Amortization of intangible assets 270,833 196,250
Stock compensation expense for warrants and
options issued to employees and directors 102,192 184,000
Stock compensation expense for restricted
stock issued to key employee - 40,613
Interest expense related to accretion of debt
discount costs - 27,182
Changes in operating assets and liabilities:
Accounts receivable, net (1,314,263) (1,159,186)
Supplies 131,845 (69,402)
Prepaid and other current assets 135,374 (624,637)
Deposits 16,596 (71,420)
Accounts payable and accrued expenses (550,036) 2,010,470
Accrued compensation and benefits (689,213) 609,283
Deferred revenue (314,332) 4,279
------------ ------------
Net cash (used for) provided by operating
activities (1,614,708) 536,983
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (128,184) (12,010)
Payment for purchase of Redspin - (1,876,966)
------------ ------------
Net cash used for investing activities (128,184) (1,888,976)
------------ ------------
Cash flows from financing activities:
Net repayments on line of credit agreement - (200,000)
Proceeds from term loan - 2,000,000
Payments on term loan (250,000) -
Proceeds from issuance of common stock through
warrants 60,151 -
Payments on notes payable to related party - (52,944)
Payments on capital leases (54,978) (49,835)
------------ ------------
Net cash (used for) provided by financing
activities (244,827) 1,697,221
------------ ------------
Net (decrease) increase in cash and cash
equivalents (1,987,719) 345,228
Cash and cash equivalents, beginning of period 6,436,732 4,743,395
------------ ------------
Cash and cash equivalents, end of period $ 4,449,013 $ 5,088,623
============ ============
AUXILIO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
Six Months Ended June 30,
-------------------------
2016 2015
------------ ------------
Supplemental disclosure of cash flow information:
Interest paid $ 49,254 $ 41,215
============ ============
Income taxes paid $ 71,703 $ 135,480
============ ============
Non-cash investing and financing activities:
Property and equipment acquired through capital
leases $ 22,170 $ 128,935
============ ============
Conversion of note payable to related party $ - $ 257,835
============ ============
Common stock issued in connection with the
acquisition of Redspin $ - $ 593,000
============ ============
Contact:
Investor Relations:
MZ North America
Mike Cole
949-259-4988
Vice President
mike.cole@mzgroup.us
http://www.mzgroup.us/
or
Media Relations:
Auxilio Inc.
Carrie Mulcahy
949-310-2548
Director of Corporate Marketing
carrie.mulcahy@auxilioinc.com
http://www.auxilioinc.com/
