Message #21 From:
NewsBot Date: March 27, 2007 06:57:00 AM
BGAT News Bluegate Reports 2006 Results: Revenues Up 49%
HOUSTON--(BUSINESS WIRE)--Bluegate Corp. (OTCBB:BGAT) the nation’s premier provider of outsourced healthcare IT solutions, professional technology consulting services and Medical Grade Network®, announced improved financial results for the year ended December 31, 2006, with annual sales increasing approximately 50%.
Financial highlights and operational milestones from 2006:
Revenues increased approximately 50% or more for the third consecutive year
Signed five-year renewal contract with Memorial Hermann Health Network Providers for network and managed security services
Strategic expansion to first markets outside of Texas and increased penetration within Texas.
Expanded management and sales team in preparation for expanded penetration in the greater Houston market and growth into new geographic markets
Stark Law exceptions made in late 2006 have created an ideal business environment for Bluegate in 2007 and beyond and have been driving expansion of Bluegate’s sales pipeline
Financial Overview
Bluegate recognized revenues of $3,708,000 for the year ending December 31, 2006, an increase of $1,215,000 or 49% compared to revenue of $2,493,000 in 2005. The increase was attributable to Bluegate’s acquisition of the assets and customers of Trilliant Corp., an increase in engineering services and the Company’s efforts to market its Medical Grade Network® core business. The 2006 revenue of $3,708,000 represents an increase of 13% over the pro forma combined revenues of $3,269,000 for Bluegate and Trilliant assuming the acquisition occurred on January 1, 2005 rather than the actual acquisition date of September 15, 2005.
Gross profit for 2006 was $1,965,000 or 53% versus $1,383,000, or 55% for 2005. The gross profit decrease was due to higher interconnect fees and costs associated with the expansion of the Medical Grade Network® services.
Selling, general and administrative (SG&A) expenses were $3,903,000 in 2006, compared to $3,328,000 in 2005. The increase in SG&A of $575,000 is principally attributable to an increase in payroll and payroll related expenses associated with Bluegate’s strategic sales, marketing and administrative team expansion in preparation to penetrate more markets.
Interest expense for 2006 was $772,000, an increase of $391,000 from $381,000 in 2005 as a result of issuing common stock warrants for the extension of repayments of the convertible notes payable.
Net loss in 2006 was $9,192,000 compared to a net loss of $4,165,000 in 2005. Basic and diluted loss per common share for 2006 was $1.04 compared to $0.90 for 2005.
Guidance and Outlook
“The Stark Law changes enacted in 2006 that enable hospitals to provide funding and technology for electronic medical record software and technology infrastructure to physician offices are very favorable to Bluegate’s business model and are expanding our sales pipeline for 2007 and beyond,” said Bill Koehler, president of Bluegate. “Hospitals are eager to fund the majority of the cost for the technology and connectivity, such as our Medical Grade Network® and outsourced IT services, because they recognize that these are key elements needed by most physician practices in order to adopt the new technologies. As a result, we are expecting that our revenue growth will accelerate in 2007 and that we will begin realizing economies of scale inherent in our business model.”
Bluegate CEO Manfred Sternberg noted, “In 2006, we began laying the ground work to expand Bluegate’s scaleable business model to major markets across the country, with a vision that the Medical Grade Network® we built and continue to expand in Texas will become the base of the national ‘grid’ that all vested parties in a National Health Information Network (NHIN) turn to for securely connecting physicians with hospitals, other providers and insurance companies. Initial healthcare IT analysis projects in 2006 with major healthcare systems in several states were successful, leading to contract negotiations for related large-scale projects incorporating our Medical Grade Network® that we expect to announce very soon.”
Bluegate’s Form 10-KSB filing for 2006 can be accessed in its entirety at www.sec.gov.
About Bluegate Corporation
Through its exclusive Medical Grade Network®Bluegate provides hospitals with systems, IT solutions and remote management services specifically designed to increase revenue, decrease operating costs and operate more efficiently while promoting physician integration. It provides IT consulting through its professional services division and HIPAA-compliant, turnkey managed security services and interoperability solutions across its Medical Grade Network® to hospitals, physicians, and other health care facilities. Publicly traded Bluegate (OTCBB:BGAT) is a three-time recipient of Houston's Fast Tech 50 Award, honoring the fastest growing Houston-based technology companies. For further information, visit www.bluegate.com or call 713-686-1100.
Safe Harbor
This press release may contain "forward-looking statements." All statements, other than statements of fact, included in this release and without limitation statements regarding potential future plans and objectives of the Company, are forward-looking statements that involve risks and uncertainties. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements.
