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Auxilio inc. (AUXO)
Current Price: $0.94
Target Price: $3.35
Auxilio, Inc. (the “Company” or “AUXO”) saw its share price increase by 25% in 2012 and liquidity has improved by nearly 400% since we initiated coverage in July 2012. AUXO engages in the provision of outsourced print management services to the healthcare industry, working exclusively with hospitals in the United States. AUXILIO manages over 1.5 billion documents annually and maintains more than 45,000 devices from multiple manufacturers while serving over 250,000 caregivers from coast to coast. AUXILIO’s unique MPS program is guaranteed to save hospitals between 10% and 30% in print-related costs while taking on all expenses related to the production of a document, including services, supplies, equipment, finance charges and labor. As the only vendor neutral, health care exclusive MPS company in the country, AUXILIO is at the forefront of providing hospitals with specialized knowledge of hospital print environments that ensures cost reduction, assistance with e-records execution and on-site planning as a strategy partner to reduce volume substantially.
On February 12, 2013, Auxilio announced that New-Jersey-based Palisades Medical Center (PMC) has extended its contract until 2015. PMC is the largest employer in its service area with more than 1,300 employees. The original contract between AUXILIO and PMC was signed in 2010. The three-year extension is representative of the proven value and results that AUXILIO’s MPS program has delivered to substantially reduce the hospital’s print-related expense, optimize its document production processes and provide excellent customer service to caregivers.
The Company announced in January a five-year $4.5M MPS contract with Citrus Valley Health Partners. Located in Covina, California, Citrus Valley Health Partners has approximately 3,000 employees and nearly 1,000 physicians located in three hospital campuses. All encompassing, Citrus Valley Health Partners serves over one million people in the San Gabriel Valley in Southern California.
On November 13th, Auxilio announced a new five-year contract with LRGHealthcare in New Hampshire to implement its Managed Print Services program in the care organization’s Lake’s Region General Hospital and Franklin Regional Hospital. LRGHealthcare is the second hospital group affiliated with the Granite Healthcare Network (GHN), a partnership of five independent New Hampshire charitable organizations, to contract with AUXILIO. Last May, Wentworth-Douglass Hospital (WDH), one of the largest acute care and multi-specialty hospitals in the Seacoast region of New Hampshire and Southern Maine, contracted with AUXILIO as its preferred MPS solutions company. AUXILIO’s print services model will achieve cost cuts upwards of 20% in the care organizations’ print environment through volume reduction initiatives, device and supply chain management and improvements in document workflow processes.
It is worth noting that AUXO announced in December that they enjoyed a record-setting year for 2012 and maintained its guidance of revenue growth in excess of 50% in 2012. The company earned the largest number of new contract wins in company history in 2012 and has doubled the size of its national portfolio to over 80 hospitals. Since January 2012 it has simultaneously completed the integration of its MPS program in over 33 hospitals and hospitals systems, the largest number of implementations in a single year. Based on all contracts closed since December 2011, the company expects to reach cash flow positive from operations during 2013. Between December 2011 and June 2012, AUXILIO signed contracts worth an estimated $90 million in new service revenue over the life of the contracts that are all five years. The contracts represent 45 hospitals including some of the nation’s most prestigious health care provider organizations and health care systems. Also, according to AUXO, all existing contracts with AUXILIO’s customer base, including these recent wins, will deliver savings to hospital customers in excess of $70 million in print-related expenses over the next five years.
It is worth noting that William Leonard purchased shares in December 2012 and now owns 6.2% of the shares outstanding. Mr. Leonard was the former CEO of Aramark, a leader in professional services, providing award-winning food services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world. Also, Insider and Director Michael J. Joyce purchased AUXILIO shares in November 2012.
For additional information on Auxilio, Inc. please download our FREE update of coverage report dated December 5, 2012; the report is available on our website: www.vistapglobal.com.
