WESTBURY, NY--(Marketwired - Mar 30, 2015) - Vasomedical, Inc. ("Vasomedical") (OTCQB: VASO) today reported its operating results for the three months and year ended December 31, 2014.
"With a 6.3% year-over-year growth in annual revenue in 2014, we are pleased to report Vasomedical's return to profitability as we recorded a net profit of $1.13 million for the year," stated Dr. Jun Ma, President and Chief Executive Officer of Vasomedical, Inc. "Our VasoHealthcare subsidiary continued to be the most significant contributor to our success in 2014 and again exceeded its annual performance target. Currently our cash balances are approximately $16 million and our total deferred revenue has grown 25.0% in 2014 to $22.5 million, providing additional financial stability to the Company."
"Looking forward to 2015, we remain committed to our growth and diversification strategy and expect continued profitability for the year. Our partnership with General Electric Healthcare ("GEHC") continues to be strong as evidenced in the extension of our exclusive sales representation agreement to December 31, 2018 and the start of our value added reseller business for the sales, implementation and ongoing support of the GEHC IT products in the second half of 2014. We expect significant growth in 2015 in this recently initiated healthcare IT business segment and in the wireless patient monitoring product and related intellectual properties we acquired in August 2014," concluded Dr. Ma.
Financial Results for Three Months Ended December 31, 2014
For the three months ended December 31, 2014, revenue increased 23% to $12.4 million from $10.1 million for the same period of 2013. This is attributable to a 30% increase in our commission revenue from our Sales Representation segment resulting from an increase in deliveries of GEHC equipment in the quarter and higher commission rates for the equipment delivered, offset by a decrease in Equipment segment revenues.
Gross profit for the fourth quarter of 2014 increased 33% to $9.2 million, compared with a gross profit of $6.9 million for the fourth quarter of 2013. This increase is primarily a result of the higher revenue as noted above.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2014 increased 3% to $6.5 million compared to $6.3 million for the fourth quarter of 2013. The increase is primarily attributable to expenses incurred in the commencement of our new IT segment, offset by a decrease in expenses in our Equipment segment resulting from our cost reduction efforts. SG&A expenses were 52% of revenue in the fourth quarter 2014 compared to 62% of revenue for the same quarter of 2013.
Net income for the three months ended December 31, 2014 was $2.5 million, a 390% improvement compared with a net income of $.5 million for the three months ended December 31, 2013.
Financial Results for Year Ended December 31, 2014
For the year ended December 31, 2014, revenue increased $2.1 million, or 6%, to $35.0 million, compared with $32.9 million for the year 2013. Commission revenues in our Sales Representation segment increased by 14% to $30.2 million for the year 2014, as compared with $26.6 million for the prior year. The increase was due primarily to higher installations of underlying equipment by GEHC in 2014 as well as higher commission rates for the equipment installed in 2014. Equipment segment revenue for the year decreased by 25% to $4.7 million, principally due to a decrease in volume from EECP sales and a decrease in sales in our Biox subsidiary in China.
Gross profit for the year ended December 31, 2014 increased 12% to $25.2 million, compared with $22.5 million in 2013. This increase is due primarily to higher revenue in the Sales Representation segment as noted above.
Selling, general and administrative expenses for the year ended 2014 increased 1% to $23.3 million, compared with $23.1 million for the same period in 2013. The increase resulted primarily from costs incurred in our new IT segment which began operations in the third quarter 2014, offset by a decrease in expenses in our Equipment segment as a result of our cost reduction efforts beginning in the third quarter 2014 in this segment.
For the year ended December 31, 2014, the Company had net income of $1.1 million, or $0.01 per common share, compared with a net loss of $1.1 million, or $0.01 per common share, for the year ended December 31, 2013.
Net cash increased by $1.1 million to $9.1 million at December 31, 2014, compared with net cash of $8.0 million at December 31, 2013. As of March 27, 2015, the Company's net cash was approximately $16.0 million. Working capital increased to $9.2 million at December 31, 2014, compared to $6.7 million at December 31, 2013, an improvement of 37%.
Deferred revenue remains substantial, at approximately $22.5 million as of December 31, 2014, to be recognized in the future when the underlying equipment or services is delivered and accepted at the customer site. Our shareholders' equity increased to $7.8 million as of December 31, 2014, compared with $6.5 million as of December 31, 2013.
Conference Call Information
The Company will host a conference call on Monday, March 30, 2015 at 11:00 a.m. ET featuring remarks by Jun Ma, Ph.D., President and CEO of Vasomedical, and Michael Beecher, Chief Financial Officer of Vasomedical. To join the conference call, please dial 1-877-407-8033 from the U.S. or 1-201-689-8033 internationally. Please call at least five minutes before the scheduled start time. The conference call will also be available via webcast and can be accessed through the Investor Relations section of Vasomedical's website, http://www.vasomedical.com/. Please allow extra time prior to the call to visit the site and download any necessary software to listen to the live broadcast.
A replay of the conference call will be available approximately two hours after completion of the live conference call at http://www.vasomedical.com/. To access the dial-in replay of the call, which will be available until June 30, 2015, please dial 1-877-660-6853 or 1-201-612-7415. All dial-in participants must use the following code to access the call: 13604624.
About Vasomedical
Vasomedical, Inc. is a diversified medical technology company specializing in the manufacture and sale of medical devices and in the domestic sale of diagnostic imaging products. The Company operates through four wholly owned subsidiaries: Vasomedical Solutions, Inc., Vasomedical Global Corp., Vaso Diagnostics, Inc. d.b.a. VasoHealthcare, and VasoHealthcare IT Corp. Vasomedical Solutions manages and coordinates the design, manufacture and sales of EECP® Therapy systems and other medical equipment operations; Vasomedical Global operates the Company's China-based subsidiaries; VasoHealthcare is the operating subsidiary for the exclusive sales representation of GE Healthcare diagnostic imaging products in certain market segments; and VasoHealthcare IT is a national value added reseller of GE Healthcare IT's Radiology PACS (Picture Archiving and Communication System) software solutions and related services, including implementation, management and support. Additional information is available on the Company's website at www.vasomedical.com.
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| Summarized Financial Information |
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FOR THE THREE MONTHS ENDED |
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FOR THE YEAR ENDED |
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| STATEMENTS OF OPERATIONS |
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December 31, 2014 |
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December 31, 2013 |
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December 31, 2014 |
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December 31, 2013 |
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| (In thousands) |
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| Revenue |
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$ |
12,355 |
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$ |
10,095 |
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$ |
34,954 |
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$ |
32,890 |
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| Gross profit |
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9,169 |
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6,900 |
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25,192 |
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22,513 |
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| Operating income (loss) |
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2,506 |
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414 |
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1,063 |
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(1,290 |
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| Other income, net |
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39 |
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67 |
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|
192 |
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87 |
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| Income (loss) before taxes |
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2,545 |
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481 |
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1,255 |
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(1,203 |
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| Income tax benefit (expense) |
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(77 |
) |
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23 |
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(127 |
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58 |
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| Net income (loss) |
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$ |
2,468 |
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$ |
504 |
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$ |
1,128 |
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$ |
(1,145 | ) |
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| BALANCE SHEETS |
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December 31, 2014 |
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December 31, 2013 |
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(In thousands) |
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| Total current assets |
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$ |
28,994 |
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$ |
25,931 |
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| Total assets |
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$ |
40,991 |
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$ |
33,517 |
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| Total current liabilities |
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$ |
19,779 |
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$ |
19,215 |
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| Total stockholders' equity |
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$ |
7,751 |
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$ |
6,465 | |
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Except for historical information contained in this release, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this release, words such as "anticipates", "believes", "could", "estimates", "expects", "may", "plans", "potential" and "intends" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company's management, as well as assumptions made by and information currently available to the Company's management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the effect of the dramatic changes taking place in the healthcare environment; the impact of competitive procedures and products and their pricing; medical insurance reimbursement policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in the conduct of clinical trials and other product development programs; the actions of regulatory authorities and third-party payers in the United States and overseas; uncertainties about the acceptance of a novel therapeutic modality by the medical community; continuation of the GEHC agreement; and the risk factors reported from time to time in the Company's SEC reports. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.