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AUXILIO, Inc. (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 year ended December 31, 2013.


   -- Increased 2013 revenues 21% to $43.0 million; service revenues increased 
      22% to $37.1 million 
   -- Achieved operating income margins of 4% in FY 2013 vs. (5%) in FY 2012 
   -- Generated $2.6 million of cash flows from operations in 2013, up from 
      -$30,000 in 2012 
   -- Added three new recurring revenue contracts during 2013 and three more 
      since December 31, 2013

"I am pleased with the progress we made in 2013," stated Joseph J. Flynn, president and CEO of AUXILIO, Inc. "We continue to deliver value to our clients by streamlining their business processes and helping them become more efficient across their entire print services functions. Our pipeline of potential new clients remains strong as we see tremendous opportunities to provide value added services to existing and new clients."

Financial Results

For the twelve months ended December 31, 2013

For the twelve months ended December 31, 2013, the company reported revenues of $43.0 million, an increase of 21% when compared to $35.6 million in the same period in 2012. Recurring service revenues increased 22% from nine new contracts implemented in 2012 and 2013 and expansion of services with existing customers.

Cost of revenue was $35.3 million, an increase of 14% compared to $31.0 million in 2012. The increase in the cost of revenues is attributed primarily to staffing and service costs to support the new and expanded recurring service contracts. Gross profit for the twelve months of 2013 was $7.7 million, or 18% of revenues, compared to $4.6 million or 13% for the same period of 2012. The gross margin improvement was a result of more contracts moving beyond the initial implementation phase, which require more upfront investment.

Operating expenses for 2013 were $5.9 million, a decrease of 6% from $6.3 million in 2012. Sales and marketing expenses fell by 19% due to the termination of a joint marketing agreement with a channel partner in 2013. General and administrative expenses increased 4% to $3.8 million due to additional staffing to handle the increase in transaction volume. The Company generated $1.8 million of operating income in 2013 compared to an operating loss of $1.6 million in 2012.

Net income for the twelve months ended December 31, 2013 was $1.3 million, or $0.06 fully diluted earnings per share, compared to a net loss of $2.4 million or $0.12 fully diluted loss per share, in the same period of 2012. The weighted average diluted shares outstanding increased to 22.8 million shares.

After excluding charges of $576,000 related to stock-based compensation and $190,000 in charges related to stock granted for marketing activities, non-GAAP measure of adjusted income from operations for the twelve months ended December 31, 2013 was $2.5 million or 6% of revenue compared to a loss of $759,000 or (2%) of revenue after excluding charges of $391,000 related to stock-based compensation and $480,000 in charges related to stock granted for marketing and consulting activities in the same period of 2012.

At December 31, 2013, the Company had $4.7 million of cash and cash equivalents, up $2.5 million from the same period a year ago. Cash provided by operating activities amounted to $2.6 million compared to $30,000 of cash used for operating activities during the same period in 2012. Working capital improved to $254,000 at December 31, 2013 compared to -$661,000 at December 31, 2012.

Paul Anthony, CFO of AUXILIO, stated: "We are pleased with the steady improvements in our cash flows and margins over the past five quarters. This reflects additions of recurring revenues from new and existing contracts and excellent cost controls. While we expect to incur higher costs at the start of our engagements with new customers as well as making additional investments in our business, we are confident in reaching our long term margin objectives."

Business Updates

On January 13, 2014, AUXILIO announced a five-year MPS contract with the University of San Diego Health System with over 850 physicians and 565 beds. AUXILIO won this competitive bid as a result of their exceptional customer service reputation and guaranteed cost savings.

The Company secured a three-year service agreement with New Hanover Regional Medical Center ("New Hanover"), the largest health care provider in Wilmington, North Carolina in February 2014. The agreement covers New Hanover's 729 beds and numerous specialty treatment centers located in the Wilmington region.

Beth Israel Deaconess Medical Center ("Beth Israel Deaconess"), a leading hospital in Boston, Massachusetts with 649 beds and 1,250 full time physicians, awarded a Managed Print Consulting services contract to AUXILIO in February 2014.

AUXILIO announced the hiring of Mark Dressel for the newly created position of Executive Vice President, Consulting and Managed IT Services Group on March 27, 2014. Mark's role is to drive new sources of revenue from current and prospective customers through healthcare consulting, IT sourcing/outsourcing and other high demand offerings that enhance our position as a strategic healthcare IT service partner.

Conference Call Information

CEO Joe Flynn and CFO Paul Anthony will host a conference call with investors to discuss its full year 2013 earnings results.

Date:                Monday, March 31, 2014 
Time:                5:00 pm ET 
US:                  877-941-1427 
International:       480-629-9664 
Conference ID:       4674877 

A replay of the call will be available from 8:00 pm ET on March 31, 2014 to 11:59 pm ET on April 14, 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 4674877.

About AUXILIO, Inc.

AUXILIO is the pioneer of Managed Print Services for the healthcare industry, working exclusively with hospitals and hospital systems throughout the United States. A true Management Services company, AUXILIO streamlines systems and aligns processes and infrastructure for onsite print operations that reduce cost, increase productivity and meet and exceed customers' patient care standards. AUXILIO also provides a wide range of healthcare consulting and managed IT services using the same focused approach on cost savings and operational efficiencies as their core managed print services business.

Founded in 2004, AUXILIO serves a national portfolio of over 100 hospital campuses and manages over 1.3 billion documents produced annually from more than 50,000 devices supporting over 250,000 caregivers. AUXILIO's is independent, works with all print vendors, and provides full-time, on-site customer service and technical representatives.

For more information about AUXILIO, visit

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 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.

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