Auxilio Rolls Along, Signs Another
By Ken Nagy, CFA
On January 24, 2013, Auxilio, Inc. (OTC Markets:AUXO), the Mission Viejo, California based Managed Print Services (:MPS) company for the health care industry, reported that it signed a five year, $4.5 million MPS contract with Citrus Valley Health Partners, located our of Covina, California.
Citrus Valley Health Partners serves over one million people in the San Gabriel Valley in Southern California.
The health care system has approximately 3,000 employees and nearly 1,000 physicians located in three hospital campuses, including Citrus Valley Medical Center-Queen of the Valley Campus in West Covina, Foothill Presbyterian Hospital in Glendora, and Citrus Valley Medical Center-Inter-Community Campus in Covina.
The contract adds to Auxilio’s national portfolio and continues its momentum into 2013.
Over a 12 month period, Auxilio will have implemented its print services program in over 30 new hospitals and hundreds of their affiliated entities; grown its hospital portfolio by over 50% and now manages the process and production of over 1.5 billion documents per year for more than 250,000 caregivers, physicians and health care employees across the country.
Likewise, Auxilio completed the implementation of its MPS program in 15 new customer hospitals during the third quarter of fiscal 2012.
Auxilio operates on-site in 22 states throughout the nation representing more than 26,000 patient beds in over 80 hospitals.
Moreover, in an effort to scale its business to meet the evolving U.S. healthcare industry acceleration, Auxilio has recently made several key operational enhancements including scaling sales and business development efforts.
The Company remains focused on building awareness in the healthcare industry to add new accounts with large healthcare systems, expanding its geographic presence domestically, renewing existing accounts for three to five year terms, and moving all new accounts toward profitability.
Along the same lines the Company’s MPS offerings continue to be in high demand as health care systems and hospitals increasingly search for solutions to reduce costs and enhance efficiencies.
With its exclusive focus on the healthcare industry, the Healthcare Information Technology (:HITECH) portion of the American Recovery and Reinvestment Act of 2009 (:ARRA) offers Auxilio a unique growth opportunity.
The HITECH portion of the bill includes nearly $20 billion of reimbursement incentives to those providers achieving “Meaningful Use” for the implementation of an Electronic Medical Record System.
Auxilio’s unshared position as the only managed print service provider in the U.S. dedicated exclusively to the health care industry and hospitals allows it to tap into HITECH incentives indirectly by bringing a unique exposure and knowledge in assisting customers in the preparation of electronic records management and the complex compliance requirements of the ‘meaningful use’ criteria federal mandates.
As Hospitals and IT departments are pressured to further reduce cost and enhance efficiencies as well as act quickly on cost cutting measures to comply with these EHR (Electronic Health Records) mandates, it leads to shorter sales cycles for Auxilio.
Similarly, the continued trend of high levels of consolidation within the healthcare industry should work to the Company’s advantage.
As healthcare systems consolidate and become larger, the need to streamline cost and increase efficiencies also grows, presenting a strong demand driver for Auxilio’s MPS solutions.
For additional research on small-cap stocks, please visit scr.zacks.com.
To become a subscriber to Zacks SCR and receive SCR blogs and research reports emailed directly to your inbox, please visit our Subscribe page.
More From Zacks.com