QHR ANNOUNCES RECORD 2009 REVENUES AND EARNINGS RESULTS
Kelowna, BC, April 29, 2010 – (TSX-V: QHR)QHR Technologies Inc. (“QHR” or the “Company”), (TSX Venture: QHR) announced today the release of its annual audited financial statements for the year ended December 31, 2009. Annual revenues increased 112% to a record $13.8 million. Net earnings were 6 cents per share compared to 1 cent per share in 2008.
HIGHLIGHTS
- Revenue for the year ended December 31, 2009 was $13.8 million compared to $6.5 million in 2008.
- Net earnings were $1.35 million compared to $0.25 million in 2008.
- EMS division revenues increased 137% to $10.2 million.
- EMR division revenues increased 63% to $3.6 million.
- Annualized recurring revenue increased 140% to $11.5 million at year end compared to $4.8 million last year.
- Annual service, selling and administrative expenses declined from 90% of revenue to 74% of revenue.
- Revenue of $4.2 million for the fourth quarter of 2009 was a new record for a quarter.
- The Company has been profitable in twelve of the last fourteen quarters.
- Shareholders’ equity at year end was $6.1 million compared to $1.8 million at the end of 2008.
In 2009, the Company successfully completed two major acquisitions: the financial management software division of Momentum Healthware, Inc., in January, and Clinicare Corporation in December. These acquisitions, combined with organic growth in both of the Company’s divisions led to the record revenues and earnings.
“We are very pleased to see such significant revenue growth across both of our divisions, and to have completed two strategic acquisitions that have now been successfully consolidated into our business. The results of our efforts have been recognized as QHR was recently named as one of the TSX Venture 50 companies for 2010, and was also named as one of the Top 5 Pure-play Healthcare ICT Companies and one of the Top 10 Growth Companies on the 2010 Branham 300 list. Looking forward, we expect our 2010 revenues will exceed $20 million based on the full year impact of the acquisitions and on the continued organic growth of both of the Company’s divisions” stated Al Hildebrandt, President and CEO.
OPERATING RESULTS
Revenue – for the period ended December 31
| 2009 3 months |
2008 3 months | % increase | 2009 12 months |
2008 12 months | % increase | |
| EMS division | $3,064,667 | $1,398,058 | 119% | $10,216,665 | $4,315,181 | 137% |
| EMR division | 1,124,604 | 642,940 | 75% | 3,606,339 | 2,206,183 | 63% |
| Total revenue | $4,189,271 | $2,040,998 | 105% | $13,822,994 | $6,521,364 | 112% |
Revenue increased by $7.3 million in 2009, of which approximately $1.8 million was attributable to the acquisitions of the Financials Division of Momentum Healthware, Inc., in January and Clinicare Corporation in December. A key component of the Company’s strategy is to build recurring revenues, and these had reached an annualized level of approximately $11.5 million at the end of 2009, compared to $4.8 million at the end of the previous year.
Operating expenses – for the period ended December 31
| Operating Expenses | 2009 3 months |
2008 3 months | % increase | 2009 12 months |
2008 12 months |
% increase |
| Service costs | $1,301,019 | $635,804 | 105% | $5,608,349 | $3,112,410 | 80% |
| Selling/admin expenses | 1,202,986 | 882,152 | 36% | 4,638,819 | 2,780,972 | 67% |
| Total | $2,504,077 | $1,517,956 | 65% | $10,247,168 | $5,893,382 | 74% |
Service costs of $5.6 million in 2009 increased 80% over 2008 due to the inclusion of the operating costs of the acquisitions made during the year, as well as the addition of implementation staff – particularly in Ontario where the Company has substantially grown its EMS business. Service costs declined from 48% of annual revenue in 2008 to 41% of annual revenue in 200
Selling and administrative expenses increased by 67% to $4.6 million, also reflecting the operating costs of the acquisitions made during the year. Selling and administrative expenses declined from 43% of annual revenue in 2008 to 34% of annual revenue in 2009.
Net earnings
Net earnings for the year ended December 31, 2009 were $1,354,237 or 6 cents per share, compared to $253,627 or 1 cent per share in 2008. Net earnings increased from 3.9% of revenue in 2008 to 9.8% of revenue in 2009 as the company’s revenue growth rate exceeded its expense growth rate.
OUTLOOK FOR 2010
The Company continues to execute its business model based on recurring revenues. Recurring revenues had reached approximately $11,500,000 on an annualized basis at December 31, 2009 as compared to $4,800,000 as at December 31, 2008.
The Company made two major acquisitions in 2009: the financial management software division of Momentum Healthware, Inc., in January, and Clinicare Corporation in December. These acquisitions add to the Company’s customer base and recurring revenues, and they strengthen the Company’s competitive position in both the EMS and EMR markets. In addition, the Company formed Cloudwerx, which builds on its data hosting capability and provides EMR customers with additional choices when implementing EMR solutions.
Management expects to achieve continued growth in revenues and earnings during 2010. Revenues are forecasted to exceed $20,000,000based on the full year impact of the acquisitions, the strong base of recurring revenue, and on an acceleration of activity in both of the Company’s divisions. Growth of the Company’s EMR division depends on the actions of provincial governments and their funding policies. Delays in implementing funding models in each province could restrict revenue growth. Sales in the EMS division are subject to the long procurement processes of public institutions and this could result in significant variations in quarterly revenues, depending on when new sales are closed. 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.
Management believes the industry that the Company participates in will continue to grow in coming years, driven by an aging population and ongoing demands for improved healthcare services. Current healthcare spending in Canada is approximately $183 billion. The segments of the industry that the Company deals with, including regional health districts, hospitals, other healthcare facilities such as long term care facilities, and physicians offices collectively account for approximately 52% or $95 billion of this spending. Management expects industry spending to be relatively unaffected by recession, and that the publicly-funded nature of the industry gives it stability.
Management also believes that there are two significant trends in the healthcare industry over the coming years. First, is the conversion from manual and paper-based systems throughout the healthcare system to the implementation of robust and interoperable technology systems to manage patient information and healthcare procedures and records. The second is an increased focus on cost control and improved resource utilization to deal with the pressure of ever-increasing healthcare costs. Management believes that the Company is well positioned to assist the healthcare industry in meeting its challenges and will benefit from these trends.
Effective April 30, 2010, the Company’s CFO, Tom Mamic will be departing QHR to pursue other interests. The Company is currently undertaking a process to find his replacement. Charles LaFlèche will oversee the Company’s financial operations during the interim period. Mr. LaFlèche, FCMA is Executive Vice President of QHR Software, a Director of QHR Technologies and the former Founder and CFO of Momentum Healthware.
QHR operates two business units in two distinct markets:
The Enterprise Management Software (“EMS”) division (formerly the HR division), specializes in workforce management software which consists of integrated payroll, staff scheduling and human resource applications; and in customized financial management software built on the Microsoft Dynamics GP (formerly Great Plains) 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 physicians, medical specialists and surgeons, as well as an electronic patient record that is a key component of the move throughout Canada to provide electronic health records for all Canadians.
For a more complete business and financial profile of the Company, management encourages interested parties to visit the Company’s website, www.QHRtechnologies.com.
On behalf of the Board of Directors
Al Hildebrandt, President and CEO
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 that we expect our 2010 revenues will exceed $20 million; that we will have continued organic growth of both of the Company’s divisions; that recent acquisitions strengthen the Company’s competitive position in both the EMS and EMR markets; that 2010 revenues are forecasted to exceed $20,000,000; that profitability of the Company should continue to improve; that we can add new revenues at low marginal costs; that the Company’s industry will grow in coming years; that spending in the industry are stable; that trends of the medical industry include interoperable systems and cost control, and the Company is well situated to assist in these endeavours; 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 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.
For a more complete business and financial profile of the Company, management encourages interested parties to visit the Company’s website, www.QHRtechnologies.com.
For further information, please contact:
Al Hildebrandt at (250) 979-1701 Investor Relations – Tangent Mgmt. 1-866-345-0115
ahildebrandt@QHRtechnologies.com info@tangentmanagementcorp.com
