QHR Technologies Inc.
TSX VENTURE : QHR

QHR Technologies Inc.

April 20, 2009 08:00 ET

QHR Announces Financial Results for 2008

KELOWNA, BRITISH COLUMBIA--(Marketwire - April 20, 2009) - 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, 2008. Revenues reached a record $6,521,364 and earnings increased to $253,627.

QHR operates two business units in two distinct markets.

The Enterprise Management Software ("EMS") division (formerly the HR division), specializes in workforce management software and consists of integrated payroll, staff scheduling and human resource software; 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.

HIGHLIGHTS

- Revenue for the year ended December 31, 2008 increased 11% to $6,521,364 compared to $5,893,684 for the previous year.

- Recurring revenue increased 26% to $4,800,000 at year end compared to $3,800,000 last year.

- EMR division revenue for 2008 increased 53% to $2,206,183 compared to $1,440,397 in 2007.

- Earnings for 2008 were $253,627 compared to $212,555.

- Revenue of $2,042,098 for the fourth quarter 2008 was a new record for a quarter.

- The Company has been profitable in nine of the last ten quarters.

- Shareholders' equity at year-end was $1,839,305 compared to $1,451,856 for 2007.

- Acquisition of Clinicvault in September 2008 added $282,000 to revenue since acquisition and strengthened the Company's competitive position in the EMR market.

- Acquisition of the financial management software division of Momentum Healthware, Inc. in January 2009.

- Management expects 2009 revenues of QHR to exceed $10,000,000 based on these acquisitions and the growth of both of the Company's divisions.



OPERATING RESULTS

Revenue

Revenue for the year ended December 31, 2008 2007 % increase
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EMS division $4,315,181 4,453,287 (3%)
EMR division 2,206,183 1,440,397 53%
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Total revenue $6,521,364 5,893,684 11%
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Revenue increased by $627,680 in 2008 of which approximately $450,000 was attributable to the acquisition of Clinicvault in September 2008 and to the full year impact of the acquisition of National Medical Solutions Inc. in August 2007.

A key part of the Company's strategy is to build recurring revenues, and these had reached approximately $4,800,000 on an annualized basis at year-end, compared to $3,800,000 last year.

Operating expenses

Operating expenses in 2008 were $5,907,204 compared to $5,363,368 in 2007, an increase of 10%.



Operating expenses for the year ended
December 31, 2008 2007 % increase
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Service costs 3,112,410 2,878,409 8%
Selling and administrative expenses 2,794,794 2,484,959 12%
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Total operating expenses $5,907,204 5,363,368 10%
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Service costs were $3,112,410 for 2008, an increase of 8% over last year. Service costs were reduced by investments tax credits recoverable of $247,000. Service costs before deducting the ITCs increased by $481,000 compared to last year. The increase was the result of the Clinicvault acquisition and additions to staff to support the growth of the Company. Gross margin for 2008 was 52% compared to 51% last year.

Selling and administrative expenses were $2,794,794 for 2008, an increase of 12% over last year. The acquisition of Clinicvault accounted for approximately 40% of the increase and the remainder was the result of the full year cost of salaries for employees hired during the previous year, an increase in investor relations activity and higher legal and audit costs associated with running a public company.

Net earnings

Net earnings for the year ended December 31, 2008 were $253,627 compared to $212,555 for 2007. Although revenue grew by $628,000 during 2008, expenses grew by slightly more before tax credits. Much of the increase in expenses was to position the Company for future growth and management expects that 2009 will see an increase in earnings based on acquisitions made and organic growth of the Company's two divisions.

OUTLOOK FOR 2009

On January 19, 2009 QHR announced the acquisition of the financial software division of Momentum Healthware, Inc. ("Momentum"), a privately held Manitoba based company. The acquisition was effective January 15, 2009 and the purchase completed on January 27, 2009. The acquired business was merged with the Company's HR division to form a new Enterprise Management Software ("EMS") division. Management considers that this acquisition gives QHR the opportunity to become a market leader in providing a comprehensive enterprise management software solution to the healthcare/social services market.

Management expects to achieve growth in revenues and earnings during 2009. Revenues are expected to exceed $10,000,000 based on the acquisitions reviewed above and on an acceleration of activity in both of the Company's divisions. The EMS division has a strengthening pipeline of opportunities and the EMR division is in the final stages of qualification as an approved vendor in both Saskatchewan and Manitoba. Successful qualification in those provinces should enable the EMR division to achieve revenue growth in the second half of 2009.

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. Also, 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.

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 contains "forward looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements are indicated expectations or intentions. Forward-looking statements included in this news release include that "Management expects 2009 revenue of QHR to exceed $10,000,000 based on these acquisitions and the growth of both of the Company's divisions", and, "Management considers that the acquisition of Momentum gives QHR the opportunity to become a market leader in providing a comprehensive enterprise management software solution to the healthcare/social service market", and "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 cost" and "management expects that 2009 will see an increase in earnings based on acquisitions made and organic growth". Factors which may result in changes include that our competitors may provide more competitive products, we not be able to comply with changing governmental regulations for healthcare or that the needs of our customers change. Additionally, market factors may increase our costs more than currently expected Results from operations in any given period are not necessarily indicative of results to be expected in future periods. QHR is a technology business development enterprise where investment; various trends and factors in the marketplace; and product enhancements must be carefully managed to achieve long-term revenue growth and profitability. 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 statements.

Further risk information on the Company is available at www.sedar.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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