AUXILIO reports $15.4 million net revenue for 2010

AUXILIO, Inc. (OTCBB:AUXO), the nation's pioneer and leading Managed Print Services (MPS) company for health care, announced its financial results for the 2010 fiscal year.

“During the year, we ramped up our MPS business by achieving significant customer wins, including hospitals from some of the largest health care systems in the US, which demonstrates our growing leadership position in the industry and our unique value proposition to our customers.”

"We are encouraged by our progress in 2010, which was driven by the success of our MPS solutions, our organic sales efforts, and our joint marketing relationship with Sodexo," stated Joseph J. Flynn, president and CEO of AUXILIO, Inc. "During the year, we ramped up our MPS business by achieving significant customer wins, including hospitals from some of the largest health care systems in the US, which demonstrates our growing leadership position in the industry and our unique value proposition to our customers."

"Already in 2011, we are making significant progress on our growth objectives. We recently announced a five-year MPS contract renewal with the prestigious Saint Barnabas Health Care System (SBHCS) in New Jersey. With its six campuses, over 18,000 employees, 2,300 beds, nearly 5,000 physicians and more than two million patients treated annually, SBHCS is the largest customer in our national hospital portfolio. Looking ahead, we are focused on maintaining our 100% customer retention rate, adding new customer contracts, and growing our sales and assessment infrastructure to enable us to capture the increasing demand for Managed Print Services in the health care industry," concluded Flynn.

Financial Results

For the year ended December 31, 2010, AUXILIO reported net revenue of $15.4 million, compared to $16.0 million in 2009. Gross profit for the year was $2.9 million, or 19% of sales, compared to $4.0 million or 25% of sales, in 2009. Operating expenses for the year were $4.4 million, compared to $4.0 million in 2009. Net loss for the year was $1.5 million, or $0.08 per share, compared to a net loss of $35,700 or breakeven, in 2009.

Paul Anthony, AUXILIO's Chief Financial Officer stated, "We signed five new long-term contracts in the second half of 2010. As such, our fiscal 2010 results only reflect a portion of the revenue related to these new contracts but recognize many of the costs related to starting up an account, such as commissions, travel, recruiting and onboarding of new employees, and other upfront costs. In addition, we assume the customer's legacy contracts with third-party vendors when we sign a new account and absorb related costs at the beginning of the relationship; however, after a period of time we are able to favorably restructure the contracts. As a result of these factors, beginning in the first quarter fiscal 2011 we expect our gross and operating margins will be negatively impacted but are expected to improve over the life of the contracts. These factors are symptomatic of a services model and, as such, we expect for these trends to continue as we grow the business by continuing to add new customer contracts."