SOURCE: Vasomedical, Inc.

Vasomedical, Inc.

August 13, 2014 09:00 ET

Vasomedical Announces Second Quarter 2014 Results

WESTBURY, NY--(Marketwired - Aug 13, 2014) - Vasomedical, Inc. ("Vasomedical") (OTCBB: VASO) today reported its operating results for the three months ended June 30, 2014.

"We are pleased to report that during the second quarter of 2014 revenue from our Sales Representation Segment increased 4.6% to $6.7 million compared to the same period in 2013. While we experienced a decline in revenue from our Equipment Segment, the effect of the increased revenue in the Sales Representation Segment resulted in a 2.2% increase in gross profit to $5.5 million in the quarter. In addition, our selling, general and administrative costs decreased 4.4% to $5.5 million compared to $5.7 million for the second quarter of 2013. The net result was a decrease in our net loss to less than $0.2 million for the second quarter of 2014, compared to a loss of over $0.5 million for the same period in 2013. Based on current forecasts, the Company expects to be profitable for the year ended December 31, 2014," stated Jun Ma, President and CEO of Vasomedical.

"We were also excited to announce the signing of a multi-year Value Added Reseller Agreement ("VAR Agreement") with GEHC to become a national value added reseller of GE Healthcare IT's Radiology PACS (Picture Archiving and Communication System) software solutions and to provide related services, including implementation, management and support. We anticipate that this new business will result in a significant increase in revenue and profitability over time," added Dr. Ma.

Three Months Ended June 30, 2014 Financial Results

For the three months ended June 30, 2014, revenue was relatively flat at $7.9 million compared to $7.9 million for the same period of 2013. Sales Representation segment revenue increased $293 thousand or 4.6% to $6.7 million while revenue from the Equipment Segment declined $325 thousand or 21.6% to $1.2 million. The decrease in equipment segment revenue is primarily due to a lower EECP® revenues as a result of lower volumes and a decrease in revenue from our China operations. As we have stated previously, EECP sales are expected to remain soft unless the acceptance level for its currently indicated use and reimbursement policies change positively. Accordingly, we have engaged in a plan effective July 1, 2014, significantly reducing our EECP expenses, while at the same time remaining poised for future growth in the event of positive changes in the EECP business environment. The uncertain timing for expanded reimbursement or clearance for new clinical indications for EECP therapy to occur was ultimately the reason behind the Company's diversification strategy, which included entering the GEHC sales representation agreement for certain diagnostic imaging products and the recently signed GEHC IT VAR Agreement, as well as expanding the Company's product portfolio through acquisitions and partnerships.

Gross profit for the second quarter of 2014 increased 2.2% to $5.5 million, compared with $5.4 million for the first quarter of 2013. This increase is primarily a result of the higher commission revenues from the Sales Representation segment, arising from higher commission rates for orders booked in 2013, partially offset by lower equipment shipments in the Equipment segment.

Selling, general and administrative (SG&A) expenses for the second quarter of 2014 was $5.5 million or 70% of revenues, compared with $5.7 million, or 73% of revenues for the same period last year. The decrease in SG&A expenditures in the second quarter of 2014 resulted primarily from the national sales meeting costs in the Sales Representation segment (as the meeting took place in the first quarter of 2014 but in the second quarter in 2013), partially offset by increased staffing costs associated with the recently introduced MobiCare™ product in the Equipment segment.

Net loss for the three months ended June 30, 2014 was $0.2 million, a 67% improvement compared to the net loss of $0.5 million for the three months ended June 30, 2013. The decrease in the loss is principally due to the increase in gross profit from our Sales Representation segment partially offset by a decrease in the gross profit in our Equipment segment.

At June 30, 2014 the Company had net cash and cash equivalents of $10.0 million and working capital of $5.5 million.

Conference Call Information

The Company will host a conference call today at 10:00 a.m. ET featuring remarks by Jun Ma, Ph.D., President and CEO of Vasomedical, and Michael Beecher, Chief Financial Officer of Vasomedical. To dial into 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, 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 www.vasomedical.com. To access the dial-in replay of the call, which will be available until November 13, 2014, please dial 1-877-660-6853 or 1-201-612-7415. All dial-in participants must use the following code to access the call: 13588072.

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

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 agreements; 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.

                         
    FOR THE THREE MONTHS ENDED     FOR THE SIX MONTHS ENDED  
STATEMENTS OF OPERATIONS   June 30, 2014     June 30, 2013     June 30, 2014     June 30, 2013  
    (In thousands)  
                                 
Revenue   $ 7,864     $ 7,896     $ 14,956     $ 15,189  
Gross profit     5,482       5,363       10,648       10,425  
Operating income (loss)     (206 )     (532 )     (1,294 )     (1,214 )
Other (expense) income, net     44       44       98       82  
Income (loss) before taxes     (162 )     (488 )     (1,196 )     (1,132 )
Income tax benefit (expense)     (14 )     (49 )     (24 )     (57 )
Net income (loss)   $ (176 )   $ (537 )   $ (1,220 )   $ (1,189 )
                                 
                                 
BALANCE SHEETS   June 30, 2014     December 31, 2013                  
    (In thousands)                  
                                 
Total current assets   $ 22,359     $ 25,931                  
Total assets   $ 31,232     $ 33,517                  
Total current liabilities   $ 16,851     $ 19,215                  
Total stockholders' equity   $ 5,332     $ 6,465                  
                                 

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