NEWS RELEASE for April 12, 2006
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Contact: Paul T. Anthony
Chief Financial Officer
Auxilio, Inc.
(949) 614-0700
Auxilio, Inc. Announces 2005 Fourth Quarter,
Year End Results and a $3 Million Financing Transaction
Mission Viejo, California - April 12, 2006 - Auxilio, Inc. (OTCBB: AUXO),
a provider of Document Image Management services for Healthcare facilities,
reported today financial results for the quarter and year ended December 31,
2005.
As a result of the Company's acquisition of The Mayo Group on April 1,
2004, the financial statements for the year ended December 31, 2005, are not
comparable to the financial statements for the year ended December 31, 2004. In
March of 2004, the Company sold its previous product offerings, including
ClimateSight(TM), SkillSight(TM), PerformanceSight(TM), ComplianceSight(TM) and
HCM TOOLS(TM), to Workstream, Inc. and completed the Company's exit from its
previous business model.
Total revenues for the fourth quarter of 2005 were $1.3 million compared
with $1.7 million for the fourth quarter of 2004. For the full year 2005, total
revenue was $4.3 million compared to $7.3 million for the full year 2004.
Net loss was $1.0 million in the fourth quarter of 2005 compared to a net
loss of $0.2 million in the fourth quarter of 2004. Net loss for the full year
2005 was $3.4 million compared to a net income of $1.0 million for the full year
2004. Fully diluted loss per share for the fourth quarter of 2005 was $0.06
compared with $0.01 for the fourth quarter of 2004. For the full year 2005,
fully diluted loss per share was $0.21 compared to fully diluted earnings per
share of $0.07 for the full year 2004.
Net income for the year ended December 31, 2004 includes the gain from
discontinued operations of $0.5 million, pursuant to the Workstream transaction,
and our exit from the previous business model.
"To cap a very successful year of business development, the fourth quarter
was Auxilio's most successful to date in terms of sales although the 2005
financials do not reflect this result yet. The Company added seven major
campuses as clients including two campuses at Raritan Bay Medical Center, the
Company's first hospital system on the East Coast, four campuses at California
Pacific Medical Center, the flagship of the Sutter Healthcare System which is
one of California's leading healthcare provider groups, and the prestigious St.
Joseph Hospital of Orange, California, part of the St. Joseph Health System,"
stated Joe Flynn, Chairman & CEO of Auxilio, Inc.
Flynn further commented, "These deals were instrumental in our ability to
close a five-year agreement with Saint Barnabas Health Care System in West
Orange, New Jersey in the first quarter of 2006. This contract represents the
largest single contract secured by Auxilio to date and will dramatically expand
the Company's footprint on the East Coast". "Management accomplished two major
goals for the year; increasing market share and expanding outside of California.
Although we were disappointed with the earnings for 2005, we are very pleased
with the recent deal signings and look forward to a strong 2006. We are very
confident that our shareholders are in a much stronger position to realize long
term value out of Auxilio and we continue to work hard at building a world
class, high growth company."
Auxilio also announced today that on April 7, 2006 it entered into a
Securities Purchase Agreement with Laurus Master Fund, Ltd, pursuant to which
the Company issued a secured convertible term note ("Convertible Note") in the
principal amount of $3.0 million and a 7 year warrant ("Warrant") to purchase up
to 478,527 shares of the Company's common stock at a price of $1.96 per share.
The principal amount of the Convertible Note carries a minimum interest
rate of eight percent (8%), subject to adjustment, and such interest is payable
monthly. The monthly principal payments will commence on July 7, 2006. The
principal amount of the Convertible Note and accrued interest thereon is
convertible into shares of Auxilio common stock at prices between $1.68 and
$1.92 per share.
"The new financing will provide us with the necessary capital to implement
the Saint Barnabas contract and provide the necessary resources to continue to
expand our operations on a national scope" added Flynn.
Rodman & Renshaw LLC acted as placement agent to the company in this
transaction.
Auxilio intends to file a registration statement with the SEC to register
the shares underlying the Warrant and the Convertible Note for public resale.
Investor Conference Call Information
The company encourages all interested investors to join a conference call
on which company management will discuss fourth quarter and year ended December
31, 2005 results and provide guidance for future expectations. The call is
scheduled at 4:00 p.m. EST / 1:00 p.m. PST on April 17th, 2006. The phone number
for the call is (800) 289-0496. A re-broadcast of the conference call will be
available for two weeks at (888) 203-1112, Passcode 6794657.
About Auxilio, Inc.
Auxilio, Inc. provides total outsourced document image management services
and related financial and business processes for major healthcare facilities.
The company's proprietary technologies and unique processes assist hospitals,
health plans and health systems with strategic direction and services that
reduce document image expenses, increase operational efficiencies and improve
the productivity of their staff. Auxilio's analysts, consultants and resident
hospital teams work with senior hospital financial management and department
heads to determine the best possible long term strategy for managing the
millions of document images produced by their facilities on an annual basis.
Auxilio's document image management programs guarantee our clients immediate
measurable savings, a fully outsourced process and unparalleled service.
Auxilio's target market includes medium to large hospitals, health plans and
healthcare systems. Customers served by Auxilio include health systems such as
Raritan Bay Medical Center, California Pacific Medical Center, Memorial Health
Services, St. Joseph's Health System, Catholic Healthcare West and Huntington
Hospital of Pasadena, CA.
For more information, see the company's website at www.auxilioinc.com or
contact:
Paul T. Anthony
CFO
Auxilio, Inc.
27401 Los Altos, Suite 100
Mission Viejo, CA 92691
Phone: 949-614-0700
Fax: 949-614-0701
panthony@auxilioinc.com
Forward Looking Information
This Release contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements can be identified
by the fact that they do not relate strictly to historical or current facts and
often include the words "believe," "expect," "anticipate," "project," or words
of similar meaning, or future or conditional verbs such as "will," "would,"
"should," "could," or "may." Forward-looking statements are estimates of, or
expectations or beliefs regarding, our future financial condition or financial
performance that are based on current information. Our business is subject to a
number of risks and uncertainties that could adversely affect our ability to
grow earnings per share, expand net interest margin and maintain asset quality
and, therefore, could cause our future financial condition or operating results
to differ significantly from our current expectations and beliefs. Certain of
those risks and uncertainties are described in our Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2004, as filed with the Securities and
Exchange Commission. Readers of this Release are urged to read the cautionary
statements, which are set forth under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Forward Factors
That May Affect Future Results" in Part II of that Report. Due to these
uncertainties and risks, readers are cautioned not to place undue reliance on
forward-looking statements contained in this Release, which speak only as of
this date. We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
AUXILIO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31, 2005
ASSETS
Current assets:
Cash and cash equivalents $ 664,941
Accounts receivable, net 488,824
Prepaid and other current assets 91,365
Supplies 443,577
Investment in marketable securities 16,250
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Total current assets 1,704,957
Property and equipment, net 210,862
Deposits 41,355
Intangible assets, net 684,344
Goodwill 1,517,017
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Total assets $ 4,158,535
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 510,604
Accrued compensation and benefits 322,937
Deferred revenue 298,862
Current portion of long-term debt 16,626
Current portion of capital lease obligations 36,646
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Total current liabilities 1,185,675
Commitments and contingencies --
Stockholders' equity:
Common stock, par value at $0.001, 33,333,333 shares
authorized, 14,438,662 shares issued and outstanding 15,963
Additional paid-in capital 15,190,416
Accumulated deficit (12,233,519)
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Total stockholders' equity 2,972,860
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Total liabilities and stockholders' equity $ 4,158,535
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AUXILIO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
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2005 2004
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Net revenues $ 4,290,962 $ 7,281,809
Cost of revenues 3,225,155 4,012,100
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Gross profit 1,065,807 3,269,709
Operating expenses:
Sales and marketing 1,783,196 1,423,106
General and administrative expenses 2,327,497 1,285,576
Intangible asset amortization 482,564 333,092
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Total operating expenses
4,593,257 3,041,774
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Income (loss) from operations (3,527,450) 227,935
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Other income (expense):
Interest expense (148,365) (13,662)
Interest income 35,373 6,148
Other Income -- 3,250
Gain on sale of marketable securities 293,083 --
Loss on disposal of fixed assets (8,225) --
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Total other income (expense)
171,866 (4,264)
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Income (loss) before provision for income taxes (3,355,584) 223,671
Income tax expense (benefit) 3,200 (282,160)
------------ ------------
Net income (loss) from continuing operations (3,358,784) 505,831
Income (loss) from discontinued operations, (including gain
on disposal of $674,942), net of tax expense of $14,000 -- 487,895
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Net income (loss) $ (3,358,784) $ 993,726
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Net income (loss) per share - basic:
Income (loss) per share-continuing operations $ (0.21) $ 0.04
Income (loss) per share-discontinued operations $ -- $ 0.04
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Net income (loss) per share - basic $ (0.21) $ 0.08
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Net income (loss) per share - diluted:
Income (loss) per share-continuing operations $ (0.21) $ 0.03
Income (loss) per share-discontinued operations $ -- $ 0.04
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Net income (loss) per share - diluted $ (0.21) $ 0.07
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Number of weighted average shares outstanding
Basic 15,623,690 12,729,311
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Diluted 15,623,690 14,517,617
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