Auxilio Inc. Reports Third Quarter 2015 Results
Record Revenue of $15.7 million increased 40% YOY
Auxilio Inc. Reports Third Quarter 2015 Results
MISSION VIEJO, Calif. — (BUSINESS WIRE) —
Auxilio, Inc. (OTCQB: AUXO), a leading provider of Managed Print Services (MPS) and IT Security for the healthcare industry, today announced financial results for the third quarter ended September 30, 2015.
“We’re pleased to announce a strong quarter, driven by solid operational execution as we have made excellent progress in implementing our new MPS contracts during 2015, which total more than $80M in five year recurring service revenue. Our team has delivered on our commitment to meet these aggressive implementation schedules and we have properly scaled the organization to meet this demand in an efficient manner,” stated Joseph J. Flynn, President and CEO. “We continue to see additional growth opportunities for MPS while the sector trends continue to be favorable for our security offerings. We are seeing increased demand for those services, evidenced by the fact that bookings were the strongest in company history for the month of October at Redspin. We remain very excited about this space.”
Financial Results for the three months ended September 30, 2015
For the three months ended September 30, 2015, the Company reported revenues of $15.7M, an increase of 39.7% when compared to $11.3M reported in the third quarter of 2014. Approximately $2.7M of the increase is a result of the addition of new MPS recurring service revenue contracts. The Company added approximately $1.1M in service revenues and software subscriptions from the IT Security Solutions offerings, in addition to an increase of $0.9M in equipment revenue, compared to the same period in 2014.
Cost of revenue for the three months was $12.9M, compared to $8.7M for the same period in 2014. The increase in cost of revenue in 2015 is attributable primarily to the addition of new recurring service revenue contracts. The Company incurred approximately $1.9M in additional staffing costs, which includes contract labor, approximately $1M in additional service and supply costs, and approximately $0.2M of additional travel costs, primarily as a result of implementations for our new customers. Equipment costs increased by approximately $0.9M in 2015, primarily as a result of the increase in equipment revenues from the copier fleet refresh activities. Gross profit for the third quarter of 2015 was $2.9M, or 18.3% of revenues, compared to $2.5M or 22.6% of revenues, for the same period in 2014. As the implementation phase for many of these large contracts is completed and transitions into the maintenance phase during the next twelve months, margins are expected to improve.
Operating expenses for the third quarter were $2.3M, an increase of $0.6M compared to the third quarter of 2014. Sales and marketing expenses increased by 36.6% due to increased headcount to expand our geographical reach and support the sales effort with the newly acquired businesses. General and administrative expenses increased 33.7% to $1.6M due to integration efforts across the Security Solutions business. The Company reported operating income of $0.6M in the third quarter of 2015 compared to operating income of $0.8M in the third quarter of 2014.
Net income for the three months ended September 30, 2015, was $0.5M, or $0.02 per basic and diluted share, compared to net income of $0.7M, or $0.03 per basic and diluted share, in the same period of 2014. Excluding $0.2M in charges related to stock based compensation and $0.1M in amortization of intangibles, we achieved adjusted income from operations of $0.9M in the third quarter of 2015, compared to adjusted income from operations of $1.0M, after excluding charges of $76,000 related to stock-based compensation and $53,000 in amortization of intangibles, for the same period last year.
Paul Anthony, CFO, stated, “As we expected, margins improved over Q2 as we get closer to completing the implementations of our recent large account wins. We continue to focus on driving revenue growth, while managing the improvement in the bottom line as our service model matures within our account base.”
At September 30, 2015, the Company had $5.2M of cash and cash equivalents and working capital of $1.9M. Cash provided by operating activities for the nine months ended September 30, 2015 was $0.9M compared to $1.0M during the same period in 2014. The Company maintains a line of credit with a commercial bank for up to $2M.
Financial Results for the nine months ended September 30, 2015
For the nine months ended September 30, 2015, the Company reported revenues of $45.2M, an increase of 41.8% when compared to $31.9M reported in the same period of 2014. Approximately $5.2M of the increase is a result of the addition of new recurring service revenue contracts. The Company added approximately $3.9M in service revenues and software subscriptions from the Company’s IT Security Solutions offerings, in addition to an increase of $4.4M in equipment revenue, compared to the same period in 2014.
Gross margins for the nine months ended September 30, 2015, was 15.8% of revenues, compared to 18.8% of revenues, for the same period in 2014.
Operating expenses for the nine months ended September 30, 2015, were $7.2M, an increase of 41.9% from $5.1M in the same period of 2014. Sales and marketing expenses increased by 40.4% and general and administrative expenses increased 42.6%. The Company reported a marginal operating loss for the nine months ended September 30, 2015 compared to operating income of $0.9M in the same period of 2014.
Net loss for the nine months ended September 30, 2015 was $0.2M, or $0.01 per basic and diluted share, compared to net income of $0.7M, or $0.03 per basic and diluted share, in the same period of 2014. Excluding $0.4M in charges related to stock based compensation and $0.3M in amortization of intangibles, we achieved an adjusted income from operations of $0.7M for the nine months ended September 30, 2015, compared to an adjusted income from operations of $1.3M, after excluding charges of $0.3M related to stock-based compensation and $53,000 in amortization of intangibles, for the same period last year.
Conference Call Information
CEO Joe Flynn and CFO Paul Anthony will host a conference call with investors to discuss its third quarter 2015 earnings results.
Date: Monday, November 16, 2015
Time: 4:30 pm ET
Conference ID: 8138034
A replay of the call will be available from 7:30 pm ET on November 16, 2015 to 11:59 pm ET on December 1, 2015. 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 8138034.
About Auxilio, Inc.
Since 2004, Auxilio has led the Managed Print Services industry by offering an innovative and customer driven approach for healthcare organizations. Auxilio takes full responsibility for healthcare customers’ on-site print environment through situation assessment, process analysis, strategy development and program implementation. Hospitals and health systems benefit from streamlined and aligned processes and infrastructure that result in print management programs that reduce cost, increase 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.
Through its Security Solutions Group, Redspin provides an end-to-end security offering that specifically addresses hospital security challenges or when a breach has occurred. The fully comprehensive portfolio of services and technology include HIPAA security risk assessments, vulnerability management, information security program development and a SaaS technology solution, Delphiis ™ IT Risk Manager to more than 140 hospitals. This complete service offering is unique to the marketplace to ensure enterprise-wide security and improve patient experience through its ability to mitigate risk and improve efficiency across the hospital or health system.
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.
Category: Business Wire