WESTBURY, N.Y., Aug. 13, 2013 /PRNewswire/ -- Vasomedical, Inc. ("Vasomedical") (OTC BB: VASO) today reported its operating results for the three months ended June 30, 2013.
"We are pleased by the continued growth reported for the second quarter of 2013, mostly attributable to the increased activity in our sales representation business in the U.S. and our operations in China," stated Dr. Jun Ma, President and Chief Executive Officer of Vasomedical, Inc. "We are encouraged by the success of our diversification and growth strategy, and look forward to seeing our efforts through to fruition in all aspects of our business."
"Looking ahead, we will continue to implement the Company's growth strategy by expanding the sales teams for each of our subsidiaries and looking to develop new services and product lines. These investments have already had an early impact on our results establishing a solid foundation from which to drive future growth. While it is still early in the process, we believe these investments will have a positive impact on a long-term basis."
"As previously announced, we initiated a share repurchase program in April, which we believe provides a strong vote of confidence to the investment community. As of July 30, 2013, we had acquired approximately 8 million shares of the Company's common stock. Our board of directors recently increased the buyback program by $500,000, for a total of $2 million. This program is part of our multi-pronged strategy to build shareholder value," concluded Dr. Ma.
Three Months Ended June 30, 2013 Financial Results
For the three months ended June 30, 2013, revenue increased 3% to $7.9 million from $7.7 million for the three months ended June 30, 2012. This is primarily attributable to an increase in commission revenue recognized from our Sales Representation business in the second quarter of 2013, as a result of an increase in volume of equipment delivered by GEHC.
Gross profit for the second quarter of 2013 was $5.4 million, compared to a gross profit of $5.5 million for the second quarter of 2012. The decrease is primarily due to a decrease in the sales representation segment margin, offset by an increase in equipment segment margin. The equipment segment gross margin increased to 62.9% for the three months ended June 30, 2013 from 56.7% for the same period in 2012. The decrease in the margin in the sales representation segment is due to the lower commission rate on GEHC orders received in 2012 and delivered in 2013. We anticipate that these margins will improve in the second half of 2013 as we expect to achieve a higher commission rate on 2013 orders.
Selling, general and administrative (SG&A) expenses for the second quarter of 2013 were $5.7 million compared to $5.3 million for the same period last year. The increase in SG&A expenditures in the second quarter of 2013 resulted primarily from increased costs associated with the expansion of the Equipment segment sales team of approximately $200,000, as well as $140,000 higher costs in the Sales Representation segment, of which $76,000 are non-recurring costs associated with the extension of our GEHC contract.
Net loss for the three months ended June 30, 2013 was $537,000, or $0.00 per basic and diluted common share, compared to net income of $54,000, or $0.00 per basic and diluted common share, for the three months ended June 30, 2012.
Cash flow from operations for the six months ended June 30, 2013 was $336,000. We continue to maintain a strong financial position with a cash balance of $11.6 million at June 30, 2013.
Conference Call Information
The Company will host a conference call tomorrow, Wednesday, August 14th at 11:00 a.m. ET. To dial into the conference call, please dial 1-866-393-1344 from the U.S. or 1-631-291-4996 internationally. All dial-in participants must use the following code to access the call: 26595138. 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, and www.kcsa.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 or www.kcsa.com. A dial-in replay of the call will also be available until September 16, 2013; please dial 1-855-859-2056 or 1-404-537-3406. All dial-in participants must use the following code to access the call: 26595138.
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's main proprietary products are EECP® Therapy systems, the gold standard of ECP treatment. The Company operates through three wholly owned subsidiaries: VasoSolutions, Vasomedical Global and VasoHealthcare. VasoSolutions 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; and VasoHealthcare is the operating subsidiary for the exclusive sales representation of GE Healthcare diagnostic imaging products in certain markets. Additional information is available on the Company's website at www.vasomedical.com.
Summarized Financial Information
FOR THE THREE MONTHS ENDED
FOR THE SIX MONTHS ENDED
STATEMENTS OF OPERATIONS
June 30, 2013
June 30, 2012
June 30, 2013
June 30, 2012
Operating (loss) income
Other income (expense), net
(Loss) income before taxes
Income tax expense
Net (loss) income
June 30, 2013
December 31, 2012
Total current assets
Total current liabilities
Total stockholders' equity
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.
Todd Fromer / Garth Russell
KCSA Strategic Communications
Phone: 212-896-1215 / 212-896-1250
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SOURCE Vasomedical, Inc.