QHR ANNOUNCES FINANCIAL RESULTS FOR 2010

KELOWNA, BC, April 29 /CNW/ - (TSXV: QHR) QHR Technologies Inc. ("QHR" or the "Company"), a leader in the Canadian Healthcare Information Technology sector, is pleased to announce today the release of its annual audited financial statements for the year ended December 31, 2010. Annual revenues increased 38% to a record $19.1 million, with the Electronic Medical Records ("EMR") division leading the growth; reporting a revenue increase of 195% and the Hosting ("Hosting") division (now be reported as a separate business segment) up 50% over 2009 revenues.   2010 earnings were $1.1 million or $0.04 EPS, as compared to $1.35 million or $0.06 EPS in 2009.

HIGHLIGHTS

  • Revenue for the year ended December 31, 2010 was $19.1million compared to $13.8 million in 2009.
  • EMR Division revenues increased 195% to $7.7 million, up from $2.6 million in 2009.
  • The acquisition of Clinicare in December 2009 added $3.3 million to 2010 revenue and significantly strengthened the Company's position in the EMR market.
  • EMR division's product Accuro was added to Ontario MD's qualified CMS 3.0 product list as of November 29, 2010 which provides opportunities for the company to expand its Ontario footprint of EMR clients and generate revenues from the 24,000 physicians in Ontario.
  • Annualized recurring revenue increased to $12.5 million at year end compared to $11.5 million in 2009.
  • Shareholders' equity at year end grew by 161% to $15.9 million from $6.1 million at the end of 2009.
  • EBITDA for 2010 was $2.5 million slightly down from $2.7 million in 2009, reflecting additional corporate activity development expenses and approximately $500,000 in non-recurring expenses related to the Clinicare acquisition.

The combination of increased recurring revenue, transitioning acquired companies clients to our core product line and attracting new customers led to the record revenues for the Company.   Based on the strength of our company's positioning in several markets, the Company raised $8 million through a public offering for debt reduction and capital investment on December 22, 2010.

Positive cash flows throughout the year, especially in Q4, along with the $8 million equity investment reflects a much stronger Balance Sheet through the elimination of all long term debt and a reduction in current liabilities, for a combined debt reduction of approximately $5 million.

"2010 was a year of growth for QHR that has really set the groundwork for the future. We are once again named by Branham Group as one of the Top 5 Pure-play Healthcare ICT Companies in Canada and ranking in the top 200 ICT companies in Canada" said Al Hildebrandt president and CEO of QHR

OPERATING RESULTS

Revenue - for the period ended December 31

  2010
3 months
2009
3 months
   %
increase
2010
12 months
2009
12 months
%
increase
             
EMS division $2,440,770 $3,064,667 -20% $9,851,761 $10,216,655 -4%
             
EMR division 1,914,517 776,081 147% 7,733,674 2,617,398 195%
             
Hosting division 315,399 348,523 -10% 1,485,465 988,941 50%
             
Total revenue $4,670,686 $4,189,271 11% $19,070,900 $13,822,994 38%

Revenue increased by $5.2 million in 2010, of which the majority is attributed to growth in the EMR division.   $3 million of this revenue growth came by way of the full year of Clinicare support revenue (acquired November 30, 2009) and the remaining $2.2 million was organic growth in EMR markets. Recurring revenue is a key component to the Company's growth strategy, and these had reached an annualized level of approximately $12.5 million at the end of 2010.

The Hosting division reported financial results under the EMR division in prior years.  Due to its growth, clarity of results and given because IFRS in Q1 2011 requires this as its own reporting segment, the financial results of the Hosting division is reported separately, including quarterly and annual comparisons to 2009 had it been reported in that fashion.   Segmenting the Hosting division will show more clearly the cost of goods more related to the Hosting division when computer equipment which are lower margin sales, or remote access licensing which have a related cost of goods.   We believe that our investment in the Hosting division over the past few years, will be a significant differentiator for our EMR and EMS divisions and 2011 will see a continuation of that investment.   Removing the Hosting division from what used to be included in the EMR division also allows the reader to determine the increased profitability of the EMR division which is approximately 90% recurring revenues.

The EMS division saw a slight decline of $360,000 in revenues in 2010 after significant licensing growth in 2009.  New licensing revenue from existing customers has already been announced in Q1, 2011.

Operating expenses - for the period ended December 31

Operating
Expenses
2010
3 months
2009
3 months
  %
increase
2010
12 months
2009
12 months
   %
increase
             
Service costs $2,087,814 $1,301,019 60% $7,983,610 $5,608,349 42%
             
Selling/admin expenses $1,403,021 1,982,253 -29% 6,681,652 4,638,819 44%
             
Total $3,490,835 $2,504,077 39% $14,665,262 $10,247,168 43%

Service costs of $7.9 million in 2010 increased 42% over 2009 mainly due to the addition of 34 employees at Clinicare, acquired late in 2009.

Selling and administrative expenses for the year increased $2.0 million, or 44%, reflecting increased corporate business development activities, complexities in auditing and financial reporting, costs associated with the shutdown of the Calgary Clinicare office and the one-time cost of decreasing the headcount in that acquisition.  Selling and administrative expenses are 35% of annual revenue in 2010, up only 1% over 2009 and then the reduction in headcount related to the Clinicare product line.

OUTLOOK FOR 2011

The Company's business model is strongly based on recurring revenue, in which it continues to execute on. The Company saw one major acquisition at the very end of 2009; Clinicare, which had a financial impact in increased revenues as well as increased expenses, mostly isolated to 2010.  The Clinicare acquisition has strengthened our EMR market position over the course of 2010. The consolidation of this acquisition into the EMR division and the increasing organic growth has solidified the Company's position in the Canadian EMR market which now services over 3,800 physicians.

Management expects growth in revenue and more specifically earnings in 2011. Provincial certification approvals in Manitoba and Saskatchewan have our EMR division being the clear leader of EMR system adoption in those two provinces.   With the recent November 29, 2010 CMS 3.0 Certification in Ontario for the EMR product has allowed our 400+ Clinicare Ontario physician clients to remain on the provincial funded systems, and provides the company with an opportunity to market to the 24,000 physicians in Ontario.

The investment into the Hosting division in 2010 is expected to accelerate revenue in 2011.  This division supplements the EMR division by giving clients a "one-stop-shop" for EMR hosting, ASP, IT infrastructure and services.   As the EMR division strengthens, management expects the Hosting division to also follow suit. Provided QHR meets its targets for revenue growth, the profitability of the Company should continue to improve because it has the capacity to add new revenues at low marginal costs. The Company enters 2011 with a strong financial position and acceleration in divisional activity.

Management considers the recent signing of EMS contracts as announced in Q1 2011 an indicator of the revenue growth opportunities for 2011.

Management continues to believe that the Healthcare IT industry which the Company participates in, will continue to grow in coming years, driven by an aging population and ongoing demands for improved healthcare services. There are three significant trends in the healthcare industry that the Company is well positioned to assist the healthcare industry and benefit from.

  • Firstly, the increasing importance for physicians to convert from paper-based systems to the implementation of robust and interoperable technology systems to manage patient information and healthcare procedures and records.
  • Secondly, the focus for physicians to support and host medical records externally with a credible and certified vendor rather than running back-up and IT services within the facility.
  • Finally is an increased focus on cost control and improved resource utilization to deal with the pressure of ever-increasing healthcare costs.

For a more complete business and financial profile of the Company, management encourages interested parties to visit the Company's website: www.QHRtechnologies.com

Conference Call Details: The Company executives will host a conference call at 2:00 PM EST (11:00 PDT) Tuesday, May 3, 2011 to discuss the results of the Company for the year ended December 31, 2011. To listen to the conference call, please dial 647-427-7450 (Toronto) or 778-371-9827 (Vancouver).

On behalf of the Board of Directors,

Al Hildebrandt
President and CEO   

About QHR Technologies Inc.

QHR now operates three business units in distinct markets:

The Enterprise Management Software ("EMS") division specializes in workforce management software, which consists of integrated payroll, staff scheduling and human resource software, and in customized financial management software built on the Microsoft Dynamics GP platform. These products are targeted at complex healthcare and social services environments.

The Electronic Medical Records ("EMR") division offers a suite of medical software modules that provides computer-based medical records for family physicians, medical specialists, and surgeons, as well as administrative modules for billing and patient scheduling, that is a key component of the move throughout Canada to provide electronic healthcare records for all Canadians.

The Hosting division specializes in EMR ASP Hosting solutions both on-site and off-site, which consist of custom application hosted solutions, exchange email hosting, office software packages, mobile messaging services, server archiving and many other custom solutions and services. These solutions are targeted at EMR clients looking for an enhanced ASP option, required by some provincial governments.

Legal Notice Regarding Forward Looking Statements

This news release may contain "forward looking statements" within the meaning of applicable Canadian securities legislation. These statements are subject to risks that may cause the actual results to be materially different in future periods from those expressed or implied by such forward looking statement. Forward looking statements in this press release include; Recent EMS contracts as an indicator of the revenue growth in 2011; significant investment into the Hosting division in 2010 is expected to accelerate revenue in 2011 and will be a significant differentiator for our EMR and EMS divisions; that profitability of the Company should continue to improve; that we can add new revenues; Risks that may prevent or delay the forward looking statements from coming to fruition include that we may not offer products that are acceptable to industry regulators or customers; competitors may offer better or cheaper products; we may not be able to raise sufficient capital to improve products to remain competitive; changing regulatory requirements may prevent our products and services from being sold as expected; we may not be able to attract or retain key personnel; our technology may become obsolete; and market factors may increase our costs more than expected. QHR is a technology business development enterprise where investment and product enhancements must be carefully managed to achieve long-term revenue growth and profitability. It is our policy not to update forward looking statements. Further information on the Company is available at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release

 

 

SOURCE QHR Technologies Inc.

For further information:

Al Hildebrandt
President & CEO
QHR Technologies Inc.
250-979-1701
ahildebrandt@QHRtechnologies.com

Investor Relations - Tangent Mgmt.
1-866-345-0115
info@tangentmanagementcorp.com

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QHR Technologies Inc.

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