PLAINVIEW, NY / ACCESSWIRE / August 14, 2017 / Vaso Corporation ("Vaso") (OTC PINK: VASO) today reported its operating results
for the three months ended June 30, 2017.
"In the second quarter of 2017, we recorded a total revenue of $17.9 million, of which our IT, professional sales service, and
equipment segments contributed 60%, 34%, and 6%, respectively. Revenue decreased by $0.3 million as compared to the same period in
the prior year, principally due to a decrease in revenue in the professional sales service segment as a result of a lower equipment
deliveries in the quarter by our partner. Given that our order bookings in this segment remain very strong, as reflected in the
significant increase in the deferred commission revenue by $3 million, or 18%, from a year ago, we anticipate higher equipment
deliveries, thus higher revenues, in this segment in the future quarters," stated Dr. Jun Ma, President and Chief Executive Officer
of Vaso Corporation. "Revenue in our IT segment increased 7% but the real growth in our healthcare IT VAR business is still yet to
manifest in the financial statements, as order backlog in the VAR operations was almost double from a year ago, which will turn
into revenue once the underlying products and services are delivered."
"Therefore, we expect to deliver another profitable year in 2017 and maintain a strong financial position as we continue to
generate positive cash flow from operating activities," concluded Dr. Ma.
Financial Results for Three Months Ended June 30, 2017
For the three months ended June 30, 2017, revenue decreased 2% to $17.9 million, from $18.2 million for the same period of 2016,
due to the decrease of $0.9 million in commission revenue in our professional sales service segment as a result of lower equipment
deliveries by our partner, as well as lower equipment sales in our equipment segment, partially offset by an increase of $0.7
million, or 7%, in revenue in our IT segment.
Gross profit for the second quarter of 2017 decreased 3% to $9.8 million, compared with a gross profit of $10.1 million for the
second quarter of 2016. This decrease is primarily the result of the decrease in revenue in the professional sales service segment
resulting in a decrease in segment gross profit of $0.6 million as well as a decrease in gross profit in the equipment segment,
partially offset by an increase of $0.4 million in gross profit in the IT segment.
Selling, general and administrative (SG&A) expenses for the second quarter of 2017 increased 5% to $10.2 million, compared
to $9.7 million for the second quarter of 2016. The increase is primarily attributable to an increase in personnel costs in the
professional sales service and IT segments.
Research and development costs increased 148% to $260 thousand in the second quarter of 2017 compared to the same quarter of
2016, due to an increase in software and product development costs.
Net loss for the three months ended June 30, 2017 was $1.0 million, compared with a net income of $0.2 million for the three
months ended June 30, 2016.
Net cash provided by operating activities was $1.4 million and $3.7 million for the six months ended June 30, 2017 and 2016,
respectively. Net cash at June 30, 2017 was $6.5 million, compared to $7.1 million at December 31, 2016.
Deferred revenue remains substantial, at approximately $20.7 million as of June 30, 2017, up by $1.3 million from $19.4 million
as of December 31, 2016, which will be recognized in the future when the underlying equipment or services are delivered and
accepted at the customer site. Our shareholders' equity decreased to $10.2 million as of June 30, 2017 from $12.9 million as of
December 31, 2016.
About Vaso
Vaso Corporation is a diversified medical technology company with several distinctive but related specialties: managed IT
systems and services, including healthcare software solutions and network connectivity services; professional sales services for
diagnostic imaging products; and design, manufacture, and sale of proprietary medical devices.
The Company operates through four wholly owned subsidiaries. Vaso Technology, Inc. provides network and IT services through two
business units: VasoHealthcare IT Corp., 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, and NetWolves
Network Services LLC, a managed network services provider with an extensive, proprietary service platform to a broad base of
customers. Vaso Diagnostics, Inc., d.b.a. VasoHealthcare, provides professional sales services and is the operating subsidiary for
the exclusive sales representation of GE Healthcare diagnostic imaging products in certain market segments in the USA. Vasomedical
Solutions, Inc., manages and coordinates the design, manufacture, and sales of EECP® Therapy Systems and other medical equipment
operations. Vasomedical Global Corp operates the Company's overseas assets including China-based subsidiaries (Biox Instruments Co.
Ltd. and Life Enhancement Technology Limited) as well as the minority interest in VSK Medical Limited, a marketing and sales
company for ECP products in the international market. Additional information is available on the Company's website at
www.vasocorporation.com.
Summarized Financial Information
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED STATEMENTS OF OPERATIONS June 30, 2017
June 30, 2016 June 30, 2017 June 30, 2016 (In thousands) Revenue $ 17,853 $ 18,214 $ 34,227 $ 35,756 Gross profit 9,798 10,113
18,868 20,125 Operating (loss) income (709 ) 264 (2,550 ) 423 Other (expense) income, net (167 ) (102 ) (348 ) (263 ) (Loss) income
before taxes (876 ) 162 (2,898 ) 160 Income tax (expense) benefit (111 ) 51 (220 ) (51 ) Net (loss) income $ (987 ) $ 213 $ (3,118
) $ 109 Income tax expense (benefit) 111 (51 ) 220 51 Interest expense (income), net 166 154 331 311 Depreciation and amortization
588 536 1,170 1,059 Non-cash stock-based compensation 98 34 317 67 Adjusted EBITDA* $ (24 ) $ 886 $ (1,080 ) $ 1,597
*Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and non-cash stock-based
compensation
BALANCE SHEETS June 30, 2017 December 31, 2016 (In thousands) Total current assets $ 21,667 $ 25,083 Total assets $
53,349 $ 57,381 Total current liabilities $ 26,720 $ 25,650 Total stockholders' equity $ 10,199 $ 12,911
Except for historical information contained in this report, the matters discussed are forward-looking statements that involve
risks and uncertainties. When used in this report, words such as "anticipates," "believes," "could," "estimates," "expects," "may,"
"plans," "potential," "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 IT
and healthcare; continuation of the GEHC agreements; the impact of competitive technology 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; 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.
Investor Contact: Michael J. Beecher Investor Relations Phone: 516-508-5840 Email: mbeecher@vasocorporation.com
SOURCE: Vaso Corporation
