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AUXILIO, Inc. (OTCQB: 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 quarter ended March 31, 2014.

Highlights

   -- Q1 2014 revenues increased 2% to $10.2 million; service revenues 
      increased 10% to $9.8 million 
 
   -- Non-GAAP measure of adjusted income from operations were 2% of revenue in 
      Q1 2014 vs. 3% in Q1 2013 
 
   -- Generated $0.1 million of cash flows from operations in Q1 2014 
 
   -- Added two new recurring revenue contracts in first three months of 2014 
 
   -- Signed one renewal contract in the first three months of 2014

"We carried the positive momentum from 2013 into the first quarter of 2014 which included the signing of two new health systems and a key renewal," stated Joseph J. Flynn, president and CEO of AUXILIO, Inc. "Our value proposition is becoming more evident as more hospitals seek to outsource their print services to a trusted provider like AUXILIO, proven to deliver superior service while reducing the total cost of operating their print systems. We are also excited about expanding our IT consulting services for hospitals by leveraging our strong customer relationships with a network of new industry contacts through our Consulting and Managed IT Services Group to further drive incremental revenue and profit."

Financial Results

For the three months ended March 31, 2014

For the three months ended March 31, 2014, the company reported revenues of $10.2 million, an increase of 2% when compared to $10.1 million in the same period in 2013. Recurring service revenues increased 10% from four new contracts implemented since the first quarter of 2013 and expansion of services with existing customers. Equipment revenues were approximately $0.4 million in the first quarter of 2014 compared to $1.2 million for the same period in 2013.

Cost of revenue was $8.5 million, essentially unchanged from the same period a year ago. Gross profit for the first three months of 2014 was $1.7 million, or 17% of revenues, compared to $1.6 million or 16% for the same period of 2013. The gross margin improvement was a result of more contracts moving beyond the initial implementation phase, which require more upfront investment.

Operating expenses for 2014 were $1.71 million, an increase of 2% from $1.67 million in the first quarter of 2013. Sales and marketing expenses fell by 26% due to the termination of a joint marketing agreement with a channel partner in 2013. General and administrative expenses increased 21% to $1.2 million due to non-recurring severance compensation and additional travel incurred for the purpose of promoting customer relations and extended new business development opportunities. The Company generated $0.03 million of operating income in the first quarter of 2014 compared to an operating loss of $0.1 million in first quarter of 2013.

After excluding charges of $201,000 related to stock-based compensation, the non-GAAP measure of adjusted income from operations for the three months ended March 31, 2014 was $254,000 or 2% of revenue compared to $323,000 or 3% of revenue after excluding charges of $197,000 related to stock-based compensation and $190,000 in charges related to stock granted for marketing and consulting activities in the same period of 2013.

Net loss for the three months ended March 31, 2014 was $71,000, or $0.00 per basic share, compared to a net loss of $230,000 or $0.01 per share, in the same period of 2013. The weighted average diluted shares outstanding increased to 22.3 million shares from 20.1 million in the first quarter of 2013.

At March 31, 2014, the Company had $4.8 million of cash and cash equivalents, up from $4.7 million at December 31, 2013. Cash provided by operating activities amounted to $0.1 million compared to $1.0 million during the same period in 2013. Net working capital improved to $0.5 million at March 31, 2014 compared to $0.3 million at December 31, 2013.

Paul Anthony, CFO of AUXILIO, explained: "We generated our sixth consecutive quarter of positive adjusted income from operations. Our achievement was impressive given the upfront investments we made in new contracts and new business development opportunities. We will continue to balance our goal of maintaining solid margins with investing prudently in future growth initiatives."

Business Updates

Mark Dressel joined AUXILIO in March 2014 to head up the Company's new Consulting and Managed IT Services Group. The Company is expanding services beyond core MPS to meet the needs of existing and new customers in the health care market. Mark will be responsible for driving new sources of revenue from current and prospective customers through health care consulting, IT sourcing and other high demand offerings; integrate AUXILIO's MPS into strategic IT consulting opportunities; and develop non-MPS health care-related opportunities. Mr. Dressel has more than 25 years of experience in developing innovative solutions for health care companies. He served as Director and Global Practice Manager for Dell's Healthcare Consulting Group prior to joining AUXILIO.

Conference Call Information

CEO Joe Flynn and CFO Paul Anthony will host a conference call with investors to discuss its first quarter 2014 earnings results.

 
 
Date:              Wednesday, May 14, 2014 
Time:              4:30 p.m. ET 
US:                877-941-1428 
International:     480-629-9665 
Conference ID:     4682383 
Webcast:           http://public.viavid.com/confi...on/confirmwebcast.ph 
                   p?id=o5aroJib 
 

A replay of the call will be available from 7:30 p.m. ET on March 14, 2014 to 11:59 p.m. ET on May 28, 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 4682383.

About AUXILIO, Inc.

AUXILIO is the leading provider of Managed Print Services for healthcare. A true Management Services company, AUXILIO takes full responsibility for health care customers' onsite 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.

Founded in 2004, AUXILIO serves a national portfolio in excess of 100 hospital campuses and manages over 1.3 billion documents annually from more than 59,000 devices supporting over 250,000 caregivers. AUXILIO's business model is vendor neutral, provides full-time, on-site customer service and technical experts and is exclusive to the health care industry.

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 
               CONDENSED CONSOLIDATED BALANCE SHEETS 
 
                              MARCH 31, 2014     DECEMBER 31, 2013 
                             ----------------  --------------------- 
                               (unaudited) 
 
          ASSETS 
Current assets: 
   Cash and cash 
    equivalents               $    4,752,319    $       4,668,624 
   Accounts receivable, net        3,592,189            3,856,791 
   Supplies                        1,039,388              967,354 
   Prepaid and other 
    current assets                   345,859              332,759 
                                 -----------       -------------- 
      Total current assets         9,729,755            9,825,528 
                                 -----------       -------------- 
 
Property and equipment, net          151,222              160,709 
Deposits                              34,413               34,413 
Loan acquisition costs                29,236               51,162 
Goodwill                           1,517,017            1,517,017 
                                 -----------       -------------- 
      Total assets            $   11,461,643    $      11,588,829 
                                 ===========       ============== 
 
      LIABILITIES AND 
    STOCKHOLDERS' EQUITY 
 
Current liabilities: 
   Accounts payable and 
    accrued expenses          $    5,231,390    $       5,057,339 
   Accrued compensation and 
    benefits                       1,130,925            1,556,513 
   Line of credit                    400,000              400,000 
   Deferred revenue                  848,397              868,186 
   Convertible notes 
    payable, net of 
    discount of $47,000 and 
    $82,250 at March 31, 
    2014 and December 31, 
    2013, respectively             1,553,000            1,617,750 
   Current portion of
    capital lease 
    obligations                       64,960               71,933 
                                 -----------       -------------- 
      Total current 
       liabilities                 9,228,672            9,571,721 
                                 -----------       -------------- 
 
Long-term liabilities: 
   Capital lease 
    obligations less 
    current portion                   32,692               46,558 
                                 -----------       -------------- 
      Total long-term 
       liabilities                    32,692               46,558 
                                 -----------       -------------- 
 
Commitments and 
 contingencies 
 
Stockholders' equity: 
   Common stock, par value 
    at $0.001, 33,333,333 
    shares authorized, 
    20,743,966 and 
    20,643,966 shares 
    issued and outstanding 
    at March 31, 2014 and 
    December 31, 2013, 
    respectively                      20,745               20,645 
   Additional paid-in 
    capital                       23,791,992           23,491,490 
   Accumulated deficit           (21,612,458)         (21,541,585) 
                                 -----------       -------------- 
      Total stockholders' 
       equity                      2,200,279            1,970,550 
                                 -----------       -------------- 
      Total liabilities and 
       stockholders' 
       equity                 $   11,461,643    $      11,588,829 
                                 ===========       ============== 
 
 
 
 
                  AUXILIO, INC. AND SUBSIDIARIES 
         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
                           (UNAUDITED) 
 
                                   Three Months Ended March 31, 
                                ---------------------------------- 
                                      2014              2013 
                                -----------------  --------------- 
Revenues                         $    10,244,574   $ 10,092,152 
Cost of revenues                       8,504,940      8,515,938 
                                    ------------    ----------- 
Gross profit                           1,739,634      1,576,214 
                                    ------------    ----------- 
Operating expenses: 
   Sales and marketing                   508,210        682,187 
   General and administrative 
    expenses                           1,201,874        992,479 
                                    ------------    ----------- 
      Total operating expenses         1,710,084      1,674,666 
                                    ------------    ----------- 
Income (loss) from operations             29,550        (98,452) 
                                    ------------    ----------- 
Other income (expense): 
   Interest expense                      (98,823)      (126,348) 
                                    ------------    ----------- 
      Total other income 
       (expense)                         (98,823)      (126,348) 
                                    ------------    ----------- 
Loss before provision for 
 income taxes                            (69,273)      (224,800) 
Income tax expense                         1,600          5,500 
                                    ------------    ----------- 
Net loss                         $       (70,873)  $   (230,300) 
                                    ============    =========== 
 
Net loss per share: 
   Basic                         $         (0.00)  $      (0.01) 
                                    ============    =========== 
   Diluted                       $         (0.01)  $      (0.01) 
                                    ============    =========== 
 
Number of weighted average 
 shares: 
   Basic                              20,658,573     20,115,873 
                                    ============    =========== 
   Diluted                            22,258,573     20,115,873 
                                    ============    =========== 
 
 
 
 
                          AUXILIO, INC. AND SUBSIDIARIES 
             CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 
                         THREE MONTHS ENDED MARCH 31, 2014 
                                    (UNAUDITED) 
 
 
                                      Additional                        Total 
                    Common Stock        Paid-in     Accumulated     Stockholders' 
                   Shares    Amount     Capital       Deficit          Equity 
                 ----------  -------  -----------  -------------  ----------------- 
Balance at 
 December 31, 
 2013            20,643,966  $20,645  $23,491,490  $(21,541,585)   $   1,970,550 
Stock 
 compensation 
 expense for 
 options and 
 warrants 
 granted to 
 employees and 
 directors                -        -      200,602             -          200,602 
Conversion of 
 convertible 
 note payable       100,000      100       99,900             -          100,000 
Net loss                  -        -            -       (70,873)         (70,873) 
                 ----------   ------   ----------   -----------       ---------- 
Balance at 
 March 31, 
 2014            20,743,966  $20,745  $23,791,992  $(21,612,458)   $   2,200,279 
                 ==========   ======   ==========   ===========       ========== 
 
 
 
 
                  AUXILIO, INC. AND SUBSIDIARIES 
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
                           (UNAUDITED) 
 
                                   Three Months Ended March 31, 
                                ---------------------------------- 
                                      2014              2013 
                                -----------------  --------------- 
Cash flows from operating 
 activities: 
   Net loss                      $       (70,873)  $   (230,300) 
Adjustments to reconcile net 
 loss to net cash provided by 
 operating activities: 
   Depreciation                           24,169         34,487 
   Stock compensation expense 
    for warrants and options 
    issued to employees and 
    directors                            200,602        196,516 
   Fair value of stock granted 
    for marketing services                     -        190,484 
   Interest expense related to 
    accretion of debt discount 
    costs                                 35,250         35,250 
   Interest expense related to 
    amortization of loan 
    acquisition costs                     21,926         37,052 
Changes in operating assets 
 and liabilities: 
Accounts receivable                      264,602        697,236 
   Supplies                              (72,034)      (197,928) 
   Prepaid and other current 
    assets                               (13,100)       (54,040) 
   Deposits                                    -          1,250 
   Accounts payable and 
    accrued expenses                     174,051        915,760 
   Accrued compensation and 
    benefits                            (425,588)      (603,921) 
   Deferred revenue                      (19,789)        25,843 
                                    ------------    ----------- 
      Net cash provided by 
       operating activities              119,216      1,047,689 
                                    ------------    ----------- 
Cash flows from investing 
 activities: 
   Purchases of property and 
    equipment                            (14,682)             - 
                                    ------------    ----------- 
      Net cash used for 
       investing activities              (14,682)             - 
                                    ------------    ----------- 
Cash flows from financing 
 activities: 
   Net repayments on line of 
    credit agreement                           -       (528,486) 
   Payments on capital leases            (20,839)       (26,460) 
   Net proceeds from issuance 
    of common stock through 
    employee stock options                     -          1,175 
                                    ------------    ----------- 
      Net cash used for 
       financing activities              (20,839)      (553,771) 
                                    ------------    ----------- 
Net increase in cash and cash 
 equivalents                              83,695        493,918 
Cash and cash equivalents, 
 beginning of period                   4,668,624      2,190,972 
                                    ------------    ----------- 
Cash and cash equivalents, end 
 of period                       $     4,752,319   $  2,684,890 
                                    ============    =========== 
 
 
 
 
                     AUXILIO, INC. AND SUBSIDIARIES 
      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) 
                              (UNAUDITED) 
 
                                          Three Months Ended March 31, 
                                        -------------------------------- 
                                               2014             2013 
                                        ------------------  ------------ 
Supplemental disclosure of cash flow 
 information: 
 
   Interest paid                         $          42,313  $     54,045 
                                            ==============   =========== 
 
   Income taxes paid                     $          49,460  $      5,655 
                                            ==============   =========== 
      Non-cash investing and financing 
       activities: 
                                         $               -  $     25,834 
                                            ==============   =========== 
   Property and equipment acquired 
    through capital leases 
 
   Conversion of note payable into 
    common stock                         $         100,000  $          - 
                                            ==============   =========== 
 
 
 
    CONTACT: MZ North America

Dustin Salem, SVP

949-259-4998

dustin.salem@mzgroup.us

 
    SOURCE: AUXILIO, Inc. 
Copyright Business Wire 2014 

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