QHR Technologies Inc.
TSX VENTURE : QHR

QHR Technologies Inc.

March 25, 2008 15:51 ET

QHR Announces Increased Revenue and Earnings for 2007

KELOWNA, BRITISH COLUMBIA--(Marketwire - March 25, 2008) - 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, 2007. QHR provides integrated human resource management, payroll and staff scheduling ("HR") software systems for the healthcare and social services sector, and electronic medical records ("EMR") applications for physicians' medical offices.

HIGHLIGHTS

- Company recorded its highest annual revenue in 2007. Revenue for the year ended December 31, 2007 increased 25% to $5,893,684 compared to $4,721,439 for the previous year.

- Recurring revenue increased 58% to $3,800,000 at year end compared to $2,400,000 last year.

- EMR division revenue for 2007 increased 158% to $1,440,397 compared to $558,705 in 2006.

- Earnings for 2007 were $212,555 compared to a loss of 520,646 in 2006, a turnaround of $733,201.

- Revenue of $1,772,000 for the fourth quarter 2007 was a new record. The Company has achieved net earnings in each of the last six quarters.

- EBITDA was $530,316 for 2007 compared to a loss of $118,670 for the previous year.

- Cash at December 31, 2007 was $493,405 compared to $48,182 in 2006.

- Working capital before deferred revenue at year-end was $1,073,336 compared to $250,416 the previous year.

- Shareholders' equity at year-end was $1,451,856 compared to a deficit of $260,854 for 2006.

- Private placement of 3,500,000 shares was successfully completed for net proceeds of $960,000.

- Acquisition of National Medical Solutions ("National") on August 1, 2007 added $454,000 to 2007 revenues.



OPERATING RESULTS

Revenue

Revenue for the year ended December 31, 2007 2006 % increase
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HR division $4,453,287 4,162,734 7%
EMR division 1,440,397 558,705 158%
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Total revenue $5,893,684 4,721,439 25%
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Revenue increased $1,172,245 in 2007, representing an increase of 25% compared to the previous year. Approximately 61% of this increase in revenue was attributable to organic growth in both of the Company's divisions, with the remaining 39% being attributable to the acquisition of National.

A key part of the Company's strategy is to build recurring revenues and these had reached approximately $3,800,000 at year-end, including $600,000 attributable to the acquisition of National. Recurring revenue was equal to 64% of 2007 revenues and sets the foundation for future revenue growth.



Operating expenses

Operating expenses in 2007 were $5,363,368 compared to $4,840,109 in 2006,
an increase of 11%.

Operating expenses for the year
ended December 31, 2007 2006 % increase
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Sales and marketing $1,205,828 1,098,637 10%
Service and delivery 1,786,271 1,472,403 21%
General and administrative 1,279,131 1,098,341 16%
Product development 1,092,138 1,170,728 (7%)
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Total operating expenses $5,363,368 4,840,109 11%
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Sales and marketing expenses were $1,205,828 for 2007, an increase of 10% over last year. The increase was the result of the acquisition of National. These additional expenses had been eliminated by year-end with the integration of National operations into QHR.

Service and delivery expenses were $1,786,271 for 2007, an increase of 21% over last year. The increase was the result of expanded operations in the EMR division necessary to support the revenue growth and the costs assumed with the acquisition of National. Most of the National costs had been eliminated by year-end.

Administrative expenses were $1,279,131 for 2007, an increase of 16% over last year. Approximately $80,000 of the increase was related to the increasing costs of running a public company; approximately $60,000 was related to the acquisition of National and the balance the result of expanded operations in the EMR division. Again, by year-end the National costs had been eliminated.

Product development expenses were $1,092,138 for 2007, a decrease of 7%. The increase in costs associated with the acquisition of National was more than offset by the capitalization of development costs. For 2007 the Company capitalized $226,057 of new product development expenses compared to nil for 2006.

Net earnings

Net earnings for the year ended December 31, 2007 were $212,555 compared to a loss of $520,646 for 2006. The increase in net earnings is the result of the continued success in the HR division and the rapid increase in revenue from the EMR division resulting in the division achieving profitability for the first time during the fourth quarter of 2007.

OUTLOOK FOR 2008

The Company continues to execute its business model based on recurring revenues. The Company commences 2008 with a base of $3,800,000 recurring revenue equal to 64% of 2007 revenue.

The Company operates in two business segments with growth potential. However, the growth of the Company's EMR division depends heavily 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 HR 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 "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". 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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