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AUXILIO Reports Second Quarter 2011 Financial Results

August 15, 2011

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Second quarter 2011 net revenue increased 34% over second quarter 2010

Mission Viejo, CA – August 15, 2011 – AUXILIO, Inc. (OTCBB: AUXO), the nation’s pioneer and leading Managed Print Services (MPS) company for health care, announced its financial results for the quarter ended June 30, 2011.  The company will host its second quarter 2011 financial results conference call today at 1:30 p.m. PDT / 4:30 p.m. EDT, the details for which follow.

“Second quarter 2011 revenue grew 34% over the second quarter 2010 as we started to gain traction from the MPS contracts we signed over the past 12 months,” stated Joseph J. Flynn, president and CEO of AUXILIO, Inc.  “During the quarter we secured a marketing alliance with Sodexo, which provides us with increased resources and deepens our market reach into health care facilities across the country and enhances our visibility in the U.S. health care market.  In addition, we continued to build our presence in our current markets by expanding our relationship with Saint Alphonsus Health System in Idaho, Saint Joseph’s Medical Center of Yonkers in New York and MemorialCare Health System in Southern California.  Most recently, we built on this momentum by signing a three-year contract with Holy Cross Hospital in Maryland.  This continued track record of growth in customers and contracts further validates the value of our MPS business model.  We intend to build on this momentum to expand our market presence and ultimately return value to our shareholders.”

Financial Results

For the quarter ended June 30, 2011, AUXILIO reported net revenue of $4.8 million, an increase of 34% when compared to net revenue of $3.6 million in the same period of 2010. Cost of revenues was $4.0 million for the second quarter of 2011, compared to $2.8 million in the same period of 2010.  Gross profit for the second quarter of 2011 was $785,000 or 16% of sales, compared to $790,000 million or 22% of sales, in the same period of 2010.  Operating expenses for the second quarter of 2011 were $1.4 million, compared to $1.1 million in the same period of 2010. Net loss for the second quarter of 2011 was $570,000, or $0.03 per share, compared to a net loss of $353,000 or $0.02 per share, in the same period of 2010.

For the six months ended June 30, 2011, the company reported net revenue of $9.5 million, an increase of 30% when compared to $7.3 million in the same period of 2010.  Gross profit for the first six months of 2011 was $1.1 million, compared to $1.8 million for the first six months of 2010.  Net loss for the first six months of 2011 was $1.4 million compared to $348,000 in the first six months of 2010.

Paul Anthony, CFO of AUXILIO, Inc., stated: “Our strong revenue growth was largely driven by the five new MPS contracts beginning in the fourth quarter of 2010.  Also contributing to revenue was our solid recurring revenue base that reflects our 100% customer retention rate.  As expected, our gross margins were impacted by the cost of implementing our services with new customers.  We absorb our new customer’s legacy contracts with third-party vendors.  As we implement our programs we strive to improve upon these legacy contracts thus reducing costs over the term of the contract and improving margins.”

Conference Call Information

The company will host its second quarter 2011 financial results conference call today at 1:30 p.m. PDT / 4:30 p.m. ET, the details for which follow.  To access the call in the U.S. please dial 1-877-941-1427 and for international calls dial 1-480-629-9664 approximately 10 minutes prior to the start of the conference.  The conference ID is 4458395.  The conference call will also be broadcast live over the Internet and available for replay for 15 days at www.auxilioinc.com.  In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call.  To listen to the replay, in the U.S., please dial 1-800-406-7325 and internationally, 1-303-590-3030.  Enter access code 4458395.

About AUXILIO, Inc.

AUXILIO, Inc. is the pioneer of managed print services for the health care industry, working exclusively with hospitals and hospital systems throughout the United States.  We are vendor independent and provide intelligent solutions, a risk free program and guaranteed savings. AUXILIO assumes all costs related to print business environments through customized, streamlined and seamless integration of services at predictable fixed rates that are unmatched in the industry. We work collaboratively to assist our health care-partners in the delivery of quality patient care.  The service and solutions provided by our on-site Centers of Excellence professional print strategy consultants deliver unparalleled customer service across the industry. For more information about AUXILIO, visit www.auxilioinc.com.

Forward Looking Statements

This release contains certain forward-looking statements relating to the business of AUXILIO, Inc. that can be identified by the use of forward-looking terminology such as ``believes,'' ``expects,'' “anticipates,” “may” or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including uncertainties relating to product/services development, long and uncertain sales cycles, the ability to obtain or maintain patent or other proprietary intellectual property protection, market acceptance, future capital requirements, competition from other providers and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our Form 10-K and Form 10-Q filings with the Securities and Exchange Commission, which are available at http://www.sec.gov. AUXILIO, Inc. is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

Download the Press Release to view Second Quarter 2011 Financial Tables