SOURCE: Vasomedical, Inc.

Vasomedical, Inc.

May 14, 2015 09:00 ET

Vasomedical Announces First Quarter 2015 Financial Results

The Company Reports 5% Revenue Growth Year-Over-Year

WESTBURY, NY--(Marketwired - May 14, 2015) - Vasomedical, Inc. ("Vasomedical") (OTCBB: VASO) today reported its operating results for the three months ended March 31, 2015.

"We are excited to report that during the quarter, the Company generated a 5% increase in revenue compared to the first quarter of 2014 as well as a positive cash flow of $6.3 million from operating activities, thanks to improved performance in the Equipment segment and in the Sales Representation segment," commented Dr. Jun Ma, President and Chief Executive Officer of Vasomedical, Inc. "While we usually incur a loss for the beginning part of the fiscal year due to the seasonality of our business, our net loss for the first quarter of 2015 reduced significantly to $252 thousand compared to a loss of $1.0 million for the same quarter a year ago. Given this momentum, we expect to maintain annual profitability in 2015."

"Our recently formed IT segment, which only began operations in the second half of 2014, accounted for an operating loss of $355 thousand for the quarter, but through its booked orders and pipeline, it is beginning to penetrate the market and starting to show the potential for significant future revenue growth. We are optimistic about the future of this business as well as our VSK joint venture for international EECP sales, which began operations in the first quarter of 2015, and we anticipate positive results from these new endeavors in the near future," concluded Dr. Ma.

Three Months Ended March 31, 2015 Financial Results

For the three months ended March 31, 2015, revenue increased by 5% to $7.5 million from $7.1 million for the same period of 2014. This is mainly attributable to an increase of 25% in our Equipment segment revenue resulting from an increase in volume of EECP system sales and an increase in sales in our China operations. Commission revenue in our Sales Representation segment increased by 2% as a result of an increase in equipment deliveries by GEHC.

Gross profit for the first quarter of 2015 increased 8% to $5.6 million, compared with $5.2 million for the first quarter of 2014. Gross profit increased due to an increase in margin in our Equipment segment as a result of an increase in EECP system shipments, and an increase in profit margin in our Sales Representation segment due to an increase in deliveries of equipment and a decrease in commission expense.

Selling, general and administrative (SG&A) expenses for the first quarter of 2015 decreased 5% to $5.7 million or 77% of revenues, compared with $6.0 million, or 85% of revenues for the same period last year. This is mainly attributable to our cost reduction program in our Equipment segment and the holding of the annual national sales meeting in the Sales Representation segment in the second quarter of 2015 instead of the first quarter as in 2014.

Net loss for the three months ended March 31, 2015 was $0.3 million, a 76% decrease compared with a net loss of $1.0 million for the three months ended March 31, 2014. Included in the loss was the approximately $0.4 million loss in our newly launched IT segment. The significant loss reduction was a result of an increase in gross profit and reduced SG&A expenses as discussed above.

As of March 31, 2015, the Company had cash and cash equivalents of approximately $15.3 million and short-term investments of $109 thousand. We anticipate continued positive cash flows from operations for the current year. 

Conference Call Information

The Company will host a conference call at a date to be announced later.

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.

 
 
Summarized Financial Information
             
    FOR THE THREE MONTHS ENDED  
STATEMENTS OF OPERATIONS   March 31, 2015     March 31, 2014  
    (In thousands)  
                 
Revenue   $ 7,453     $ 7,091  
Gross profit     5,567       5,164  
Operating loss     (286 )     (1,090 )
Other income, net     40       56  
Loss before taxes     (246 )     (1,034 )
Income tax benefit (expense)     (6 )     (10 )
Net loss   $ (252 )   $ (1,044 )
                 
                 
BALANCE SHEETS   March 31, 2015     December 31, 2014  
    (In thousands)  
                 
Total current assets   $ 25,464     $ 28,994  
Total assets   $ 36,298     $ 40,991  
Total current liabilities   $ 18,015     $ 19,779  
Total stockholders' equity   $ 7,525     $ 7,751  
                 
                 

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.

Contact Information