QHR TECHNOLOGIES REPORTS FIRST QUARTER RESULTS FOR 2005
May 26, 2005 (QHR-TSX Venture Exchange) Mr. Al Hildebrandt, President and CEO of the Company, announces that the Company has released its financial statements for the first quarter of 2005. The Company completed the three months ended March 31, 2005 with a consolidated loss of $177,287 ($.01 per share) compared to earnings of $12,959 ($.00 per share) for the first quarter of 2004.
The largest component of the overall loss is attributable to the continued market development of our AccuroTM Electronic Medical Records (“EMR”) software that we added to our product offerings in 2004. The AccuroTM product continued to achieve an increased adoption rate in 2005 as our EMR market development moves AccuroTM closer to profitability. We believe, that despite the loss for the quarter that we will come to regard the acquisition of AccuroTM and the ongoing development of the software as one of the most important milestones in the Company’s development.
Revenue grew to $1,033,421 for the three months ended March 31, 2005 compared to $802,031 for the three months ended March 31, 2004. The increase of 29% reflects an increase in revenue from the Company’s primary product, Quadrant HRTM as well as the growth in the revenue from AccuroTM.
At March 31, 2005 the Company had a current asset position of $1,886,508 comprised of cash on deposit of $596,440, accounts receivable in the amount of $1,203,658 and prepaid expenses in the amount of $86,410. The Company had a working capital deficiency of $865,604, including $2,155,975 in deferred revenue that will be satisfied through the delivery of products and services in future periods. Deferred revenue will be recognized as revenue in the financial statements when the contractual obligations with the customer are met in accordance with the Company’s disclosed accounting policy.
Management calculates its adjusted working capital for internal purposes as current assets less current liabilities before deferred revenue. At March 31, 2005, this adjusted working capital amount was $1,290,371. This is an improvement of $190,878 from December 31, 2004. QHR continues to maintain a favourable current asset position which we believe will be sufficient to meet our financial obligations and business strategies through 2005.
Total assets rose to $3,192,301 at March 31, 2005 up from $3,051,568 at December 31, 2004. Shareholders’ equity declined to $290,143 at March 31, 2005 down from $467,430 at December 31, 2004. Canadian GAAP requires that all investments in product development must be expensed as they are incurred. As a result, no asset value has been assigned to the Company’s proprietary products on the financial statements. Shareholders’ equity has been eroded by this policy and investment in product development now exceeds $6,000,000 since inception. Management believes that its products have considerable commercial value that is not reflected on the financial statements.
Long-term debt which relates to leasehold improvements, capital equipment leases and a Bank Small Business Improvement Loan was reduced to $107,467 at March 31, 2005 from $229,303 at December 31, 2004. Of this long-term debt reduction $116,365 was the payment in full of the Small Business Improvement Loan.
The Company invested $176,549 in sales and marketing activities during the three months ended March 31, 2005 compared to $146,349 in 2004. The increase of $30,200 is due to the addition of sales and marketing staff to sell both Quadrant HRTM and AccuroTM.
Service delivery expenses for the three months ended March 31, 2005 increased to $333,752 compared to $240,308 for 2004. These expenses include the cost of software implementation, training and support. This increase was due to additional personnel acquired to service the growth in new and existing contracts relating to both Quadrant HRTM and AccuroTM initiatives.
Administrative expenses for the three months ended March 31, 2005 increased to $320,154 compared to $200,852 for 2004. The key increases were attributable to the rental of additional office space, rising accounting and audit fees and the addition of administrative staff.
Product development expenditures increased to $282,214 for the three months ended March 31, 2005 compared to $173,886 for 2004. These expenditures reflect the ongoing improvements and additional functions for Quadrant HRTM and AccuroTM.
Items not affecting cash resources include amortization of capital assets in the amount of $38,200 and $52,833 in amortization relating to the purchase of AccuroTM software and QHR Atlantic customer list in 2004.
For a more complete business and financial profile of the Company, management encourages interested parties to visit the Company’s website, www.QHRtechnologies.com
This news release may contain opinions and forward-looking statements that reflect the Company’s current expectations, forecasts and assumptions. These may involve risks and uncertainties that could cause actual future results to be materially different. Investors are cautioned against placing undue reliance on forward-looking statements. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
On behalf of the Board of Directors
“Al Hildebrandt”
Al Hildebrandt President & Chief Executive Officer
