InfoLogix Announces Record Revenue of $78.8 Million for the 2007 Fiscal Year

HATBORO, Pa., March 12 /PRNewswire-FirstCall/ -- InfoLogix, Inc. NASDAQ: IFLG, a leading technology provider of enterprise mobility solutions for the healthcare and commercial industries, today announced financial results for the quarter and year ended December 31, 2007. For the fourth quarter of 2007, the Company reported total revenue of $23.3 million, compared to $16.7 million for the fourth quarter of 2006, an increase of $6.6 million or 39.5%. For the full year 2007, the Company reported total revenue of $78.8 compared to $62.1 million in the full year 2006, an increase of $16.7 million or 26.9%.

    (Logo:  http://www.newscom.com/cgibin/prnh/20071101/NETH165LOGO )

    Key Operational Highlights in the Fourth Quarter
    -- Filled the last remaining key executive position with the addition of
       Eric N. Rubino as the new Chief Operating Officer; he is the former COO
       of SAP Americas and Neoware, Inc.
    -- Expanded business relationship with Dell to deliver professional
       services and wireless infrastructure solutions to current and
       prospective Dell customers in the rapidly growing healthcare market.
    -- Integrated the acquisition of the Healthcare Informatics Associates
       (HIA) business, realizing the benefits of an accretive acquisition.
    -- Signed largest international deal to date with healthcare solutions
       agreement in United Arab Emirates.
    -- Increased the number of hospitals served to over 1450 and overall
       customers served to 2100.
    -- Continued development of strategic intellectual property and patent
       expansion in the mobility and RFID areas.

"We are extremely pleased with the Company's recent achievements and strong financial performance," stated David Gulian, President and Chief Executive Officer of InfoLogix. "Our strong revenue growth and increasing market share have positioned us to capitalize on the rapidly expanding mobility and RFID technology trends in hospitals and commercial businesses. Based on our 2007 results and our strong first quarter to date we believe the Company will realize over $100 million in revenue and generate a profit in 2008."

Fourth Quarter 2007 Financial Results

Revenue for the fourth quarter ended December 31, 2007 increased 39.5% to $23.3 million from $16.7 million for the fourth quarter of 2006.

Gross margin increased to 26.9% for the fourth quarter of 2007 compared with 22.4% for the fourth quarter of 2006, primarily the result of an increase in the sale of higher margin professional services, custom software development and third-party software licenses.

Selling, general and administrative (SG&A) expenses totaled $7.7 million for the fourth quarter of 2007 compared with $7.8 million for the fourth quarter of 2006, a decrease of $0.1 million. SG&A expenses, net of non-cash FAS 123(R) expenses in the respective quarters, increased from $5.0 million in the fourth quarter of 2006 to $7.8 million in the fourth quarter of 2007, an increase of $2.8 million, or 56%. For the fourth quarter 2007, the Company recorded a net loss of $1.3 million, or $0.05 per basic and diluted share.

Full Year 2007 Financial Results

Revenue for the year ended December 31, 2007 increased 26.9% to $78.8 million from $62.1 million for the year ended December 31, 2006. The annual revenue increase was primarily attributed to the expansion of the Company's healthcare business as the result of the continued expansion of mobile point-of-care solution sales and an increase in mobile solutions sold to commercial customers. Mobile solutions include professional services, custom software development, managed services, and wireless devices and infrastructure.

Gross margin increased to 26.3% for the year ended December 31, 2007 compared with 24.1% for the year ended December 31, 2006. The increase in gross margin reflected the increased sales of more profitable mobile point-of-care solutions and professional consulting services, partially offset by an increase in lower margin third-party infrastructure.

Selling, general and administrative expenses totaled $25.2 million for 2007 compared with $17.9 million for 2006. The increase was primarily related to increases in salary, commission and other expenses related to an increased field-sales force and the hiring of key management staff, an increase in professional fees for legal and accounting services, partially offset by lower stock-based compensation expense attributable to options and warrants issued to management in 2006.

At December 31, 2007, InfoLogix had cash and cash equivalents totaling $6.1 million, working capital of $7.1 million, long-term debt of $6.9 million, and stockholders' equity of $18.5 million.

InfoLogix reported a net loss of approximately $3.2 million, or $0.13 per basic and diluted share for 2007, compared to a net loss of $1.9 million, or $0.14 per share, in 2006.

Outlook

InfoLogix intends to focus on, and make investments in, the following stated strategies for growth and expansion in 2008:

    -- Key Acquisitions:  Focus on potential acquisitions, similar to the
       newly acquired AMTSystems and HIA businesses.

    -- Organic Revenue Growth:  Leverage a newly expanded sales force to
       facilitate geographic extension and revenue growth, and create further
       penetration within current and new customers in existing markets.

    -- Service Line Mix:  Continue to shift service lines in favor of more
       solution sales and professional services which are higher margin
       engagements, through our direct accounts and expanded channel program.

    -- Proprietary Offerings: Develop and deliver new applications and
       software offerings centered around mobility and RFID.

    -- Optimize Operations:  Utilize the experience of Eric Rubino, Chief
       Operating Officer, to implement the roll-out of newly designed product
       management approaches and more efficient operations.  Throughout his
       25-year career, Mr. Rubino has held senior leadership positions with
       ground-breaking innovators and global information technology leaders,
       managing thousands of employees and the operations of an enterprise
       generating over $3 billion in revenue.

"We are excited with the significant accomplishments the Company has made to date and believe that executing on our strategic growth plan will allow the Company to improve on our strong momentum," continued Mr. Gulian. "InfoLogix is focused on shifting attention to our higher margin business lines such as solution sales and consulting services. In addition, we will utilize key management in order to optimize our operations to assure reaching profitability during the second quarter of 2008. We believe the steps taken in 2007, and our stated plan for 2008, will lead to increased shareholder value."

Conference Call and Webcast

Management will host a conference call with the investment community today, March 12, 2008 at 4:30 p.m. Eastern time. Interested parties may participate in the teleconference by pre-registering (This allows participants and speakers to pre-register for the call) at https://www.theconferencingservice.com/prereg/key.process?key=PK34646N6 and dialing 888-713-4216 or 617-213-4868 for international callers. When prompted, ask for the "Q4 2007 InfoLogix Inc. Earnings Conference Call." A telephonic replay may be accessed approximately two hours after the call through March 19, 2008, by dialing 888-286-8010 or 617-801-6888 for international callers and entering the replay access code 71515071#. The teleconference will be webcast simultaneously on the InfoLogix website at www.infologix.com under Investors: Event Calendar. The webcast replay will be archived for 12 months.

About InfoLogix

InfoLogix is a leading provider of technology and RFID based intelligence solutions that enable the mobile enterprise. InfoLogix uses the industry's most advanced technologies to increase the efficiency, accuracy, and transparency of complex business and clinical processes for the healthcare industry and the commercial marketplace. With 19 issued patents, InfoLogix provides mobile managed solutions, on-demand software applications, mobile infrastructure products, and strategic consulting services to over 2,000 clients in North America including Kraft Foods, Merck and Company, General Electric, News America Corporation, Mercedes Benz, Kaiser Permanente, Adventist Health, Universal Health Services, MultiCare Health System, University of California San Francisco, Swedish Medical Center, and Stanford School of Medicine. Founded in 2001 and headquartered in suburban Philadelphia, PA, InfoLogix has been named the sixth fastest growing new business in the United States for the last three years by Entrepreneur Magazine. InfoLogix is a publicly-traded company NASDAQ: IFLG. For more information on InfoLogix, please visit: www.infologix.com.

Safe Harbor Statement

This press release contains forward looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and that represent our expectations or beliefs about future events and financial performance. Forward-looking statements are identifiable by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties, including those under the heading "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 and other filings we make with the Securities and Exchange Commission. Actual results could differ materially from those suggested by the forward-looking statements. We do not make any commitment to revise or update any forward-looking statements to reflect new information events or circumstances occurring or existing after the date of any forward-looking statement is made.

                               INFOLOGIX, INC.
                         CONSOLIDATED BALANCE SHEETS
                          DECEMBER 31, 2007 AND 2006


                                    ASSETS

                                                 2007                2006
     Currents assets:
     Cash and cash equivalents                $6,100,995         $12,882,044
     Accounts and other receivables
      (net of allowance for doubtful
       accounts in the amount of
       $409,267 and $120,000 as of
       December 31, 2007 and 2006,
       respectively)                          20,301,369          11,797,265
     Unbilled revenue                          1,052,154                  --
     Inventory, net                            1,898,870           2,292,153
     Prepaid expenses and other
      current assets                             603,017             841,843
     Deferred tax assets-short-term              451,263             311,478

       Total current assets                   30,407,668          28,124,783

    Property and equipment, net                1,246,827           1,200,681
    Intangible assets, net                    14,029,743           1,111,633
    Deferred tax assets - long-term            2,955,822           1,375,486
    Deferred financing costs                      57,224                  --

       Total assets                          $48,697,284         $31,812,581


                     LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
     Accounts payable                         $8,650,237          $6,584,489
     Line of credit                            9,958,944           5,954,672
     Current portion of notes payable - bank     626,988             833,333
     Current portion of capital lease
      obligations                                139,335             116,973
     Sales tax payable                           299,246             342,064
     Accrued expenses                          3,560,152             767,967
     Deferred revenue                             74,680                  --
       Total current liabilities              23,309,582          14,599,498

    Notes payable - bank, net of
     current maturities                        6,817,631           1,194,445
    Capital lease obligations, net of
     current maturities                           93,968             130,378
       Total liabilities                      30,221,181          15,924,321

    Commitments and contingencies

    Stockholders' equity:
     Preferred stock, par value
     $.00001; authorized 10,000,000 shares;           --                  --
      none issued or outstanding
     Capital stock, par value $.00001;
      authorized 100,000,000 shares;
      issued and outstanding 24,909,301
      shares and 23,595,663 shares
      at December 31, 2007 and 2006,
      respectively                                   249                 236
     Additional paid in capital               23,579,533          17,802,373
     Retained earnings (deficit)              (5,103,679)         (1,914,349)
       Total stockholders' equity             18,476,103          15,888,260

        Total liabilities and
         stockholders' equity                $48,697,284         $31,812,581



                               INFOLOGIX, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                              December 31,        December 31,
                                                  2007               2006
    Operating activities:
      Net income (loss)
      Adjustments to reconcile net income
       (loss) to operating cash flow:        $(3,189,331)        $(1,869,486)
         Depreciation and amortization         1,666,826           1,319,845
         Allowance for doubtful
          accounts receivable                    289,267              20,000
         Inventory obsolescence                  285,978             123,965
         Amortization of deferred
          financing costs                         10,698                  --
         Loss on sale of property and
          equipment, net                         273,864                  --
         Stock based compensation and
          other payments                         893,910           2,773,434
         Deferred income tax benefit          (1,720,121)         (1,686,964)
      Changes in:
         Accounts receivable and
          unbilled revenue                    (8,716,759)         (1,594,241)
         Unbilled revenue                     (1,052,154)                 --
         Finished goods inventory                 42,353            (504,099)
         Prepaid expenses and other
          current assets                         282,107            (507,392)
         Accounts payable                      1,893,532            (551,467)
         Sales tax payable                       (42,818)             70,674
         Accrued expenses                      2,133,352             118,924
         Deferred revenue                         74,680            (186,397)
          Net cash provided by (used in)
           operating activities               (6,874,617)         (2,473,204)
    Investing activities:
      Cash acquisitions - AMT, HIA, DDMS
       business assets                        (3,088,576)                 --
      Acquisition of property, equipment
       and intangibles                        (1,974,462)         (1,382,535)
          Net cash used in investing
           activities                         (5,063,038)         (1,382,535)
    Financing activities:
      Proceeds from long-term debt             2,000,000           2,500,000
      Repayment of long-term debt               (801,412)         (1,160,597)
      Net borrowings from line of credit       4,004,270           1,511,345
      Deferred financing costs                   (46,253)                 --
      Repayment of notes payable -
       stockholders                                   --            (800,000)
      Common stock issued for cash, net
       of offering costs                              --          14,979,149
      Dividends paid to stockholders                  --            (740,015)
          Net cash provided by financing
           activities                          5,156,605          16,289,882
    Net change in cash and cash
     equivalents                              (6,781,048)         12,434,143
    Cash and cash equivalents at
     beginning of year                        12,882,044             447,901
    Cash and cash equivalents at
     end of year                              $6,100,996         $12,882,044
    SUPPLEMENTAL DISCLOSURE OF CASH FLOW
      Cash paid for interest                    $872,600            $664,543

    SUPPLEMENTAL DISCLOSURE OF NON-CASH
     FINANCING ACTIVITIES:
      Capital lease obligation incurred
       for new equipment                        $125,455                 $--



                               INFOLOGIX, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
      FOR THE FOURTH QUARTERS AND YEARS ENDED DECEMBER 31, 2007 AND 2006


                                 Fourth                        Full
                                 Quarter                       Year

                            2007          2006          2007          2006


    Revenues            $23,332,012   $16,741,133   $78,773,564   $62,112,744
    Cost of revenues     17,065,061    12,992,456    58,049,011    47,162,881
     Gross profit         6,266,061     3,748,677    20,724,553    14,949,863

    Selling, general
     and administrative
     expenses             7,675,818     7,845,052    25,210,547    17,897,567

    Operating (loss)
     income              (1,408,867)   (4,096,376)   (4,485,994)   (2,947,704)
    Interest expense
     (net)                  299,294       120,302       414,958       608,746
    Income (loss) before
     income tax benefit  (1,708,161)  (4,216,678)    (4,900,952)   (3,556,450)
    Income tax benefit      452,515    1,686,964      1,711,621     1,686,964

     Net (loss) income  $(1,255,646) $(2,529,714)   $(3,189,331)  $(1,869,486)

    (Loss) earnings
     per share:

     Basic                   $(0.05)       $0.02         $(0.13)       $(0.14)
     Diluted                 $(0.05)       $0.02         $(0.13)       $(0.14)

    Weighted average
     shares outstanding:
     Basic and diluted   24,901,667   16,479,966     24,173,182    13,503,170