SOURCE: Vasomedical, Inc.

Vasomedical, Inc.

November 12, 2015 09:00 ET

Vasomedical Announces Third Quarter 2015 Results

Reporting 128% Revenue Growth and Operating Profit of $1.3 Million for the Quarter

PLAINVIEW, NY--(Marketwired - Nov 12, 2015) -  Vasomedical, Inc. ("Vasomedical") (OTC PINK: VASO) today reported its operating results for the three months ended September 30, 2015.

"We are very excited to report a 128% year-over-year revenue growth at Vasomedical for the third quarter of 2015, during which our total revenue grew to $17.4 million from $7.6 million a year ago. The majority of the growth was from the acquisition of NetWolves, which we completed at the end of May 2015. Our existing operations also saw significant year-over-year growth of 13.8% and 7.2% for the three- and nine-month periods ended September 30, 2015, respectively," stated Jun Ma, President and CEO of Vasomedical, Inc. "As a result, we recorded an operating profit of $1.3 million for the third quarter of 2015, a positive change of $1.5 million from an operating loss of $149 thousand for the same quarter of 2014. The operating results for the first nine months of the year were even more encouraging, as we reported an operating profit of $1.3 million, a remarkable turnaround from last year's $1.4 million operating loss. Based on our performance year to date, we expect to be profitable again for the year 2015."

"The NetWolves acquisition successfully diversified our business and reduced our dependence on any single source of revenue. We also expect to see much improved profitability down the road as we continue to recognize the benefits of our cost reduction initiatives implemented earlier this year," added Dr. Ma.

Three Months Ended September 30, 2015 Financial Results

For the three months ended September 30, 2015, revenue increased $9.8 million, or 128% year-over-year, to $17.4 million compared to $7.6 million for the same period of 2014. The increase was principally due to $8.7 million in revenue from our recently acquired NetWolves operations. Sales Representation segment revenue increased $1.2 million, or, 18% to $7.6 million for the third quarter, due primarily to increased commission rates and increased equipment deliveries during the quarter, while revenue from the Equipment segment declined $217 thousand or 18% to $1.0 million, due primarily to a lower revenues from the EECP® business.

Gross profit for the third quarter of 2015 increased 83% to $9.9 million, compared with $5.4 million for the third quarter of 2014. The increase is primarily due to $3.5 million of gross profit in the IT segment as a result of the NetWolves acquisition and an increase of $1.3 million in our Sales Representation segment, arising from higher commission rates in this segment, partially offset by lower gross profit in the Equipment segment.

Selling, general and administrative (SG&A) expenses for the third quarter of 2015 was $8.4 million or 48% of revenues, compared with $5.3 million, or 70% of revenues for the same period last year. The increase in SG&A expenditures is primarily due to the inclusion of the NetWolves operations for the quarter, partially offset by lower costs in our Equipment and Sales Representation segments.

Net income for the three months ended September 30, 2015 was $1.2 million, a significant improvement compared to the net loss of $0.1 million for the same period in 2014. This improvement is principally due to an increase in gross profit as discussed above.

At September 30, 2015 the Company had net cash and cash equivalents of $1.9 million compared to $9.1 million at December 31, 2014. The decrease is principally due to the cash used for the NetWolves acquisition in May 2015.

Conference Call Information

The Company will host a conference call at 2:00 p.m. ET on November 12, 2015 featuring remarks by Jun Ma, Ph.D., President and CEO, Peter Castle, Chief Operating Officer, 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, 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 at www.vasomedical.com approximately two hours after completion of the live conference call. To access the dial-in replay of the call, which will be available until November 20, 2015, please dial 1-877-660-6853 or 1-201-612-7415 and use the code 13624444.

About Vasomedical

Vasomedical, Inc. is a diversified medical technology company with several distinctive but related specialties: design, manufacture and sale of proprietary medical devices; professional sales services for diagnostic imaging products; and managed IT systems and services, including healthcare software solutions and network connectivity services.

Vasomedical operates through four wholly owned subsidiaries. Vaso Diagnostics, Inc. d.b.a. VasoHealthcare (www.vasohealthcare.com), 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. 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 (www.netwolves.com), a managed network services provider with an extensive, proprietary service platform to a broad base of customers. Vasomedical Solutions, Inc. (www.vasosolutions.com), manages and coordinates the design, manufacture and sales of EECP® Therapy Systems and other medical equipment operations. Vasomedical Global Corp. (www.vasoglobal.com), operates the Company's China-based subsidiaries, including Biox Instruments Co. Ltd. and Life Enhancement Technology Limited. It is also the minority shareholder of 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.vasomedical.com.

Summarized Financial Information

    FOR THE THREE MONTHS ENDED     FOR THE NINE MONTHS ENDED  
STATEMENTS OF OPERATIONS   September 30, 2015     September 30, 2014     September 30, 2015     September 30, 2014  
    (In thousands)  
                                 
Revenue   $ 17,401     $ 7,643     $ 35,698     $ 22,599  
Gross profit     9,850       5,375       22,746       16,023  
Operating income (loss)     1,337       (149 )     1,257       (1,443 )
Other (expense) income, net     (69 )     52       (40 )     150  
Income (loss) before taxes     1,268       (97 )     1,217       (1,293 )
Income tax benefit (expense)     (38 )     (26 )     (51 )     (50 )
Net income (loss)   $ 1,230     $ (123 )   $ 1,166     $ (1,343 )
                                 
                                 
                                 
BALANCE SHEETS   September 30, 2015   December 31, 2014
    (In thousands)
             
Total current assets   $ 15,923   $ 28,994
Total assets   $ 47,384   $ 40,991
Total current liabilities   $ 24,158   $ 19,779
Total stockholders' equity   $ 9,104   $ 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 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.

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