Navigation Links
BPO Management Services Announces Financial Results for Fourth Quarter and Full Year 2008

Revenue Increases 71% for the Year as Demand Remains Strong Across All Business Segments

Company Expects 35% Sequential Increase in Revenue for Q1 09 as Healthaxis Integration Proceeds According to Plan

ANAHEIM, Calif., April 1 /PRNewswire-FirstCall/ -- BPO Management Services Inc., (OTC Bulletin Board: HAXS), a full-service healthcare and business process outsourcing company focused on serving the middle-market, today announced its financial results for the fourth quarter and full year 2008 ended December 31, 2008. The income statement does not reflect the merger of BPO Management Services and Healthaxis, Inc., which was completed on December 30, 2008.

Operational Highlights

  • BPOMS continues to experience solid growth in its ITO business segment as the Company continues to sign long-term, recurring revenue contracts. Concurrent with this effort, expenses for this segment were higher, as a percentage of revenue, than normal as the Company ramps up to support new contract revenue. Typically, there is a 3 to 6 month lag after contract signing before new revenue commences, while customer systems are being migrated. During this short period of time, the Company will experience higher expense levels without matching revenue.

  • BPOMS signed a multi-year agreement to provide ITO services to Forrest T. Jones & Company, Inc. (FTJ), an insurance agency and administrator. Under the terms of this agreement BPOMS will host and manage FTJ's IT infrastructure environment, including monitoring, support and maintenance of all related network components and devices from BPOMS full-service 24/7/365 support center located in Pearl River, NY. BPOMS will also provide dedicated Disaster Recovery services from its high-availability recovery center in Branchburg, NJ.

< 146,695 257,091 Other current liabilities 1,010,767 - Total current liabilities 20,814,907 13,054,169 Lines of credit and long-term debt, net of current portion and net of discount of $1,139 and $4,825, respectively 727,998 24,117 Capital lease obligations, net of current portion 690,278 392,942 Other long-term liabilities 232,115 33,115 Total liabilities 22,465,298 13,504,343 Commitments and contingencies (Note 8) Stockholders' equity Convertible preferred stock, Series A, par value $.01; authorized 1,608,12 shares, 0 and 1,608,612 shares issued and outstanding, respectively - 16,086 Convertible preferred stock, Series B, par value $1.00 and $.01 respectively; authorized 21,105,000 and 1,449,204 shares, respectively; 21,103,955 and 1,449,204 shares issued and outstanding, respectively 21,103,955 14,492 Non-convertible preferred stock, Series C, par value $.01; authorized 21,378,000 shares; 0 and 916,667 shares issued and outstanding, respectively - 9,167 Convertible preferred stock, Series D, par value $.01; authorized 1,500,000 shares; 0 and 1,458,334 shares issued and outstanding, respectively - 14,583 Convertible preferred stock, Series D-2, par value $.01; authorized 1,500,000 shares; 0 and 729,167 shares issued and outstanding, respectively - 7,292 Convertible preferred stock, Series F, par value $.01; authorized 1,300,000 shares; 0 and 894,942 shares issued and outstanding, respectively - - Common stock, par value $0.10 and $.01, respectively; authorized 1,900,000,000 and 1,500,000 shares, respectively; 15,165,586 and 12,171,034 shares issued and outstanding, respectively 1,516,559 121,711 Additional paid-in capital 14,687,206 27,500,477 Accumulated deficit (28,706,729) (10,568,915) Accumulated other comprehensive income, foreign currency translation adjustments (317,283) 446,265 Total stockholders' equity 8,283,708 17,561,158 $30,749,006 $31,065,501 BPO MANAGEMENT SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Year Ended December 31, December 31, 2008 2007 2008 2007 Revenues: Enterprise content management $3,270,928 $4,274,213 $14,169,854 $10,141,210 IT outsourcing services 3,455,225 2,754,348 12,213,508 5,616,239 Human resource outsourcing servicing 388,639 451,364 1,727,631 711,552 Total revenues 7,114,792 7,479,925 28,110,993 16,469,001 Operating expenses: Cost of services provided 4,929,326 3,608,992 15,321,356 8,045,756 Selling, general and administrative 3,258,471 4,983,125 15,254,214 11,965,666 Research and development 94,618 36,473 322,876 298,211 Depreciation and amortization 391,128 1,242,123 2,948,660 1,466,767 Stock-based compensation 665,773 101,860 1,287,048 360,721 Goodwill and intangible asset impairment 10,570,561 - 10,570,561 - Total operating expenses 15,578,665 9,972,573 45,704,715 22,137,121 Loss from operations (13,393,199) (2,492,648) 17,593,722 (5,668,120) Interest expense (income) Related parties 21,393 27,349 - 117,168 Amortization of related party debt discount - - 102,246 594,029 Other (net) 94,013 14,858 267,596 90,903 Other Expense - 1,091 - (2,011) Total interest and other expense 115,406 43,298 369,842 800,089 Loss before taxes (13,508,605) (2,535,946) (17,963,564) (6,468,209) Income tax expense 110,852 - 174,250 - Net loss 13,619,457) (2,535,946) (18,137,814) (6,468,209) Foreign currency translation gain (loss) (818,331) 222,406 (763,548) 553,586 Comprehensive loss $(14,437,788) $(2,313,540) $(18,901,362) $(5,914,623) Basic and diluted net loss per share $(5.74) $(0.67) Basic and diluted weighted average common 1,516,559 9,513,749

  • BPOMS completed a planned infrastructure upgrade to its Pearl River data center facility in order to provide additional electrical capacity to support future customer processing requirements. With this upgrade in place the Company is now positioned to increase revenue generated by its ITO segment approximately four-fold, without incurring any significant capital expenditures.

    • BPOMS experienced continuing progress in its ECM business segment with significant improvements in both top- and bottom-line financial performance for Q4, as compared sequentially to the prior quarter. The Company anticipates continuing business improvement in this segment, yielding increasing revenues and bottom-line profitability in the coming quarters. The Company continues to focus on growing its recurring revenue content in this segment, reducing its historic reliance on one-time project implementations.

    • In its HRO segment, the Company continues to grow and transition into a "Software as a Service" (SaaS) business model with customers signing up to use its signature HRAdvocate Human Resource Information Systems (HRIS) offering hosted by BPOMS, under a multi-year contract arrangement, in order to manage their human resource function in a cost-effective manner.

    • As revenue grows and ongoing Company integration activities take hold, BPOMS continues to drive down SG&A as a percentage of revenue. This is an important trend that will continue as the Company grows its top line and integrates consolidated Company SG&A activities. This bellweather trend demonstrates the BPOMS operating leverage as incremental revenue drives increasingly higher margins going forward. As the Company grows its revenue base and achieves critical mass, SG&A as a percentage of revenue will continue to drop-off significantly.

    • BPOMS completed its merger with Healthaxis during the fourth quarter, bringing to the Company a robust Healthcare Claims Processing capability in a rapidly expanding Healthcare marketplace. The sophisticated Healthaxis technology provides another important vertical to further leverage key underlying Company technology, processes and infrastructure. The related integration activity is well advanced and will generate improved top- and bottom-line results in the quarters and years ahead.

    • With the Healthaxis merger completed the Company has increased its recurring revenue content to approximately 80%, and continues to drive towards its goal of 90%-plus of revenues derived from recurring revenue contracts.

    Financial Results

            (in $ thousands)
                        Q4 2008  Q4 2007   % Change   FY 2008    FY 2007  % Change
        Revenues         $7,115   $7,480      (4.9)%  $28,111    $16,469      71%
          ECM            $3,271   $4,274     (23.5)%  $14,170    $10,141      40%
          ITO            $3,455   $2,754      25.4%   $12,214    $ 5,616     118%
          HRO            $  389   $  452     (13.9)%  $ 1,728    $   712     143%
        Loss from
         Operations    $(13,393) $(2,493)      437%  $(17,594)   $(5,668)    210%
        Net Loss       $(13,619) $(2,536)      437%  $(18,138)   $(6,468)    180%
        Income (loss)
         from Operations
         before non-cash
         items          $(1,402) $(1,462)     17.4%   $(2,787)   $(4,154)  (24.2)%

    Patrick Dolan, chief executive officer of BPOMS, said, "We continue to believe that the Company is well-positioned to succeed in the current economic environment as the middle market looks for ways to reduce their cost of ownership, improve operational efficiencies and enhance the quality of their technology investment. We are operating at approximately 25% percent capacity, providing lots of room to grow without adding significant costs. Our future ability to grow has been somewhat tempered by the ongoing crisis in the capital/credit markets, which like most companies today, has made obtaining additional growth capital very challenging. We are actively pursuing several strategic alternatives in order to strengthen our balance sheet and provide the necessary working capital to fully accelerate our growth as we continue to drive towards critical mass."

    Fiscal 2008 Financial Results

    Revenue for the full year ended December 31, 2008 was $28.1 million, an increase of 71% compared to the $16.5 million for the full year 2007. The Company experienced a 40% increase in Enterprise Content Management (ECM) revenue, to $14.2 million compared to $10.1 million last year. IT Outsourcing Services (ITO) revenue increased 118% to $12.2 million from $5.6 million last year. Human Resource Outsourcing (HRO) revenue increased 143% to $1.7 million from $712,000 in the year-ago period.

    Total operating expenses increased 106.5% to $45.7 million after a goodwill and intangible asset charge of $10.6 million compared to $22.1 million for of the same period last year. Inclusive in this increase was an increase in cost of services provided to $15.3 million from $8.0 million last year. SG&A expenses, as a percent of revenue, decreased to 53% from 72.7% in the full year last year, demonstrating strong expense management and the inherent leverage in the Company's business model. The loss from operations for the year was $17.6 million, inclusive of $14.8 million in non-cash expenses, compared to a loss from operations of $5.7 million, inclusive of $3.0 in non-cash expenses in 2007. The non-cash expenses included a one-time, non-cash $10.6 million charge for impairment of goodwill and intangible assets. Excluding non-cash expenses, the loss from operations for the full year period was $2.8 million from $3.8 million in the year-ago period. The net loss for the full year 2008 was $18.1 million, or $(5.74) per basic and fully diluted share (based on 3.2 million shares) compared to a net loss of $5.9 million, or $(0.67) per basic and fully diluted share (based on 9.5 million shares).

    Fourth Quarter 2008 Financial Results

    For the fourth quarter, total revenue decreased 4.9% to $7.1 million from $7.5 million for the same period last year. The change was due to decreases in the ECM and HRO business segments offset by a 25.5% increase in ITO revenue. ECM revenue reduction was a result of the recent decline in value of the Canadian dollar vs. the U.S. dollar and greater focus on higher margin opportunities yielding improved bottom-line performance. HRO experienced a revenue decline as the Company shifts focus from one-time licensing fees to growing Software as a Service, recurring revenue contracts generating long-term customer relationships Total operating expenses for the quarter were $20.5 million, an increase of 105.6% compared to total operating expenses of $10.0 million during the fourth quarter last year. Included in the operating expenses was a 36.5% increase in cost of services provided, reflecting a spike in short-term migration expenses as new ITO service contracts are migrated into the BPOMS processing environment. The loss from operations for the quarter increased to $13.4 from $2.5 million in the prior-year fourth quarter. Included in the operating loss was a one-time, non-cash charge for the impairment of goodwill totaling $10.6 million, as well as depreciation and amortization and share-based compensation, which in aggregate totaled $12.0 million for the fourth quarter of 2008 and $2.5 million for the fourth quarter of 2007. Excluding these non-cash expenses, the Company's operating loss was $1.4 million during the fourth quarter, compared to a loss of $1.5 million in the fourth quarter last year. The net loss for the quarter was $13.6 million compared to a net loss of $2.5 million in the fourth quarter last year.

    Mr. Dolan continued, "Demand for our services, technology and infrastructure, provided on a recurring revenue basis, remains consistently strong across all business segments, including our Healthcare segment which was created through the recent Healthaxis merger. We anticipate continuing business improvement in the first quarter as we expand our revenue base and ongoing Company-wide integration activities reduce SG&A expenses. Going forward we continue to expand our pipeline of new business opportunities, grow our recurring revenue content and relentlessly drive operating efficiencies through cross-organization integration activities. The integration of Healthaxis is well-advanced and should contribute strong top-line growth to accelerate our overall progress during the first quarter. As of December 31, 2008, approximately 80% of our revenues were derived from recurring revenue activities and we continue to focus on building out our backlog of future business to be delivered in the years. This growing base of recurring revenue business serves as the platform on which we will build future shareholder value, and management is confident that as capital/credit markets loosen we are well-positioned to accelerate growth and achieve positive cash flow from operations in fairly short order."

    Mr. Dolan concluded, "We believe our revenue will grow approximately 35% on a sequential basis, compared to the $7.1 million reported for the fourth quarter and including the contribution of Healthaxis' healthcare claims processing business. We anticipate continued improvement in our gross profit margin and ongoing reductions in SG&A expenses, as a percent of revenue, as we more effectively leverage our fixed infrastructure across an increasing base of revenue. We remain squarely focused on achieving cash flow break-even as quickly as possible, and expect to narrow our cash burn in the first quarter."

    As of December 31, 2008, BPOMS' balance sheet showed $2.8 million in cash compared to $0.9 million at December 31, 2007.

    About BPO Management Services, Inc.

    BPO Management Services (BPOMS) is a healthcare and business process outsourcing (BPO) service provider that offers a diversified range of on-demand services, including claims processing, human resources, information technology, and enterprise content management, to support the back-office business functions of the middle-market on an outsourced basis. BPOMS supports middle-market businesses new to the BPO market, established businesses that already outsource, and businesses seeking to maximize return-on-investment from their in-house workforce. For more information, please visit

    Forward-Looking Statements

    Certain statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate," "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements, involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of BPO Management Services, Inc. (the "Company") to be materially different from those expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to: (i) the Company's ability to obtain sufficient capital or a strategic business arrangement to fund its current operational or expansion plans; (ii) the Company's ability to build and maintain the management and human resources and infrastructure necessary to support the anticipated growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission, which are available for review at under "Search for Company Filings."

        Investor contact:
        Hayden IR
        Brett Maas, 646-536-7331
        Media contact:
        Richard Stern
        Stern & Co.
        Alison Simard
        Stern & Co.
        Company Contact:
        BPO Management Services, Inc.
        Patrick Dolan, Chairman & CEO

                             CONSOLIDATED BALANCE SHEETS
                      AS OF DECEMBER 31, 2008 AND DECEMBER 31, 2007
                                                            2008            2007
        Current assets:
          Cash and cash equivalents                    $2,784,155        $888,043
          Restricted cash                                       -         922,888
          Accounts receivable, net of allowance
           for doubtful accounts of $530,050
           and $347,797, respectively                   7,425,805       4,768,618
          Inventory                                       181,968         268,160
          Prepaid expenses and other
           current assets                               1,384,696         417,041
            Total current assets                       11,776,624       7,264,750
        Equipment and leaseholds, net of
         accumulated depreciation of $1,864,728
         and $931,268, respectively                     7,735,777       4,834,941
        Goodwill                                        4,856,171       9,029,142
        Intangible assets, net of accumulated
         amortization of $2,347,659
         and $266,194, respectively                     5,500,829       9,898,219
        Other assets                                      879,605          38,449
                                                      $30,749,006     $31,065,501
        Current liabilities:
          Current portion of lines of credit
           and long-term debt, net of
           discount of $2,733
           and $3,405, respectively                      $138,666         $17,024
          Current portion of capital
           lease obligations                              394,765         149,653
          Accounts payable                              5,591,976       3,540,827
          Accrued expenses                              3,428,573       1,927,451
          Working capital and equipment lines
           of credit                                    3,195,468         795,132
          Accrued interest-related party                        -          36,672
          Accrued dividend payable                      1,369,331         379,222
          Accrued dividend payable-related party          651,281          67,242
          Amount due former shareholders
           of acquired companies                        1,000,000       2,101,771
          Deferred revenues                             2,957,139       2,509,885
          Related party notes payable                     930,246       1,200,000
          Severance obligations payable                         -          72,199
          Income taxes payable                     
    SOURCE BPO Management Services, Inc.
    Copyright©2009 PR Newswire.
    All rights reserved

    Related medicine news :

    1. Director of Healthcare Solutions Appointed to Guide Workforce Management Initiatives for Hospitals and Long Term Care Facilities
    2. Mercy Regional Medical Center Selects Management Health Solutions, Inc. for Inventory Services
    3. Covance Experts to Present Key Insights on Risk Management at Bio/Pharmaceutical Drug Safety Forum
    4. Axsium Group Launches Workforce Management Practice for Healthcare Industry
    5. Best Practice Database Adds Research Highlighting the Value of Portfolio Management in Early-Stage Commercialization and Customer-Focused Software Quality Assurance
    6. iMedica Partners With Colorado Medical Society To Offer Electronic Health Record, Practice Management Solutions
    7. Nations Largest Home Care Provider Welcomes New Management Team to San Francisco Office
    8. SingaporeMedicine Highlights Singapore's Advanced Pain Management Techniques
    9. KMSI Announces KMx Update That Provides eLearning, Knowledge Management and Collaboration Tools for Apple iPhone and Other Mobile Devices
    10. QHR Management Client Hancock Medical Center Named Mississippi Hospital of the Year
    11. InSight Health Services Holdings Corp. and Perot Systems Corporation Announce Seven-Year Revenue Cycle Management Agreement
    Post Your Comments:
    (Date:10/10/2015)... ... October 10, 2015 , ... Isabel Healthcare will participate in the Cerner Health ... the release of the Institute of Medicine’s latest report “Improving Diagnosis in Healthcare”, Isabel ... that assist healthcare providers and consumers to potentially reduce the chance of error. The ...
    (Date:10/10/2015)... ... October 10, 2015 , ... In the inaugural people’s choice contest, entitled ... To Work in Jacksonville, amongst medium-sized companies with 25 – 99 employees. The announcement ... with a celebratory gala on October 1st. , Many of the features of ...
    (Date:10/9/2015)... California (PRWEB) , ... October 09, 2015 , ... ... Osteopathic Medicine of the Pacific Associate Dean for Graduate Medical Education J. Michael ... of the Year Award. Finley was selected for his impact on graduate medical ...
    (Date:10/9/2015)... Los Angeles, CA (PRWEB) , ... October 09, 2015 , ... ... awareness for breast cancer victims, survivors, and the ongoing effort to find a cure. ... patients another outlet for helping women in need. With their Bra Collection Campaign, Beverly ...
    (Date:10/9/2015)... ... October 09, 2015 , ... A new health tool that helps identify if ... online ( ) – just in time for the cold and flu season, ... However, for many in the U.S., the real start of cold/flu season is the ...
    Breaking Medicine News(10 mins):
    ... ... medical journal Osteoporosis International found that women taking AdvaCAL® calcium had the highest bone ... 32 studies involved 3,169 postmenopausal women, 79 skeletal measures and 7 different types of ... ...
    ... ... Dermatologist settled in Dubai, received the very prestigious ,HIND RATTAN AWARD, this ... Rattan was presented at a ceremony in connection with the yearly International ... Heavy Industries and Public Enterprises, Government of India. Dr. Mehta was awarded ...
    ... ... IL based management consulting and technology firm, today announced it will merge ... Gold Certified Partner, effective January 1, 2010. Logan Consulting is ... America, Europe and Asia since 1992. Under the new structure, ...
    ... , ... Omnetics Connector Corporation, the leading manufacturer of miniature high-rel connectors, is utilizing their ... , ... MN (Vocus) January 29, 2010 -- Omnetics Connector Corporation, the leading manufacturer of ...
    ... ... Vemma Nutrition Company launches Vemma ... or other sports drinks, Vemma THIRST goes beyond hydration by ... minerals, while replenishing the body with necessary electrolytes, specialized carbohydrates ...
    ... , , Majority of Mississippi ... Jan. 28 The following is a statement by ... Consumer Healthcare Products Association (CHPA): , "Today, the Mississippi ... that, if it becomes law, will greatly limit how cold and ...
    Cached Medicine News:
    (Date:10/8/2015)... , Oct. 8, 2015  Ardelyx, Inc. ... focused on gastrointestinal and cardio-renal diseases, today announced ... candidate, tenapanor, will be presented at the 2015 ... findings will include measures of sustained response in ... blind, placebo-controlled, randomized Phase 2 trial. The meeting ...
    (Date:10/8/2015)...  Trovagene, Inc., (NASDAQ:   TROV) a developer ... of results from a field experience analysis featuring ... (PCM) platform to accurately identify mutational status, ... appropriate therapy for patients. Mark Erlander , ... the results today in an oral presentation titled ...
    (Date:10/8/2015)... Oct. 8, 2015  Following months of investigation, Ross ... the nation alleging that the anticoagulant Xarelto,s recommended dosage doesn,t ... Philadelphia on behalf of a ... stroke because the drug didn,t work as the manufacturer suggested. ... other suits shortly on behalf of clients from across the ...
    Breaking Medicine Technology:
    ... /PRNewswire/ --,Pieris AG, a bio-pharmaceutical company ... human protein therapeutics, announced today,that its ... targeting potential. , Commenting on this ... and Preclinical Development of Pieris said: ...
    ... NJ (June 21, 2007) Nymox Pharmaceutical,Corporation (NASDAQ: ... Company’s recently completed studies of NX-1207 for,benign ... a series of,upcoming U.S. urology meetings, beginning ... Association Meeting in Colorado,Springs. These independent podium ...
    Cached Medicine Technology:
    ... reference laboratory and a worldwide leader in ... an extensive test menu of highly complex ... anatomic pathology. Owned by the University of ... half of the nation's university teaching hospitals ...
    ... is a national reference laboratory and a ... development. ARUP offers an extensive test menu ... in clinical and anatomic pathology. Owned by ... include more than half of the nation's ...
    ... ARUP Laboratories is a national reference ... laboratory research and development. ARUP offers an ... unique medical tests in clinical and anatomic ... ARUP Laboratories' clients include more than half ...
    ... a national reference laboratory and a worldwide ... ARUP offers an extensive test menu of ... clinical and anatomic pathology. Owned by the ... more than half of the nation's university ...
    Medicine Products: