WESTBURY, N.Y., March 27, 2014 /PRNewswire/ -- Vasomedical, Inc. ("Vasomedical") (OTC BB: VASO) today reported its operating results for the three months and year ended December 31, 2013.
"Our equipment segment, which includes EECP® and Biox products, showed momentum in the last quarter of 2013 with equipment sales up by 26% for the quarter, and, as a result, we increased our fourth quarter net profit by 19% from a year ago. Equipment sales also went up by 9% for the year; combined with a 15% increase in annual commission revenue in the sales representation segment, our net loss for the year was significantly narrowed to $1.1 million from $3.4 million last year, an improvement of $2.3 million," stated Dr. Jun Ma, President and Chief Executive Officer of Vasomedical, Inc. "Our VasoHealthcare subsidiary continues to deliver remarkable performance and in 2013 achieved the highest commission rate payable under our agreement with GEHC. Its overall impact, however, is not entirely reflected in the top line numbers since we recognize revenues when the underlying equipment or services are delivered to customers; prior to that we record commission receivables as deferred revenue, which is roughly 50% of the total commission revenue to be recognized in the future. As such, our total deferred revenue increased to $18.0 million as of December 31, 2013 compared with $15.6 million at December 31, 2012."
"The activities within each of our businesses are exciting and we are encouraged by the growth from both of our business segments. Looking ahead to 2014, we remain committed to our growth and diversification strategy and achieving profitability for the full year. We will continue to pursue opportunities to expand our product portfolio; the recently announced MobiCare wireless patient monitoring device, which has received marketing approval in China, is such an example. We are in continued discussions with our sales representation partner with regard to further developing the VasoHealthcare business to include more products and broader customer base. In addition, we continue to review potential accretive acquisitions and partnerships in the international and domestic markets," concluded Dr. Ma.
Three Months Ended December 31, 2013 Financial Results
For the three months ended December 31, 2013, revenue increased 3% to $10.1 million from $9.8 million for the same period of 2012. This is attributable to a 26% increase in our equipment sales revenue to $1.3 million, as a result of continued growth from our Biox subsidiary in China.
Gross profit for the fourth quarter of 2013 increased 1.2% to $6.9 million, compared with a gross profit of $6.8 million for the fourth quarter of 2012. This increase is primarily a result of the higher sales from our Biox subsidiary.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2013 was $6.3 million or 62% of revenues, compared with $6.3 million, or 64% of revenues for the same period last year.
Net income for the three months ended December 31, 2013 was $504,000, a 19% improvement compared with a net income of $425,000 for the three months ended December 31, 2012.
Year Ended December 31, 2013 Financial Results
For the year ended December 31, 2013, revenue increased $3.7 million, or 12%, to $32.9 million, compared with $29.2 million for the same period of 2012. Equipment sales revenues for the year increased by 9% to $4.6 million, principally due to growth in volume from our Biox subsidiary in China. Commission revenues in our Sales Representation segment increased by 15% to $26.6 million for the year 2013, as compared with $23.2 million for prior year. The increase was due primarily to higher installations of underlying equipment in 2013 as well as higher commission rates.
Gross profit for the year ended 2013 increased 9% to $22.5 million, compared with $20.6 million for the same period in 2012. This increase is due primarily to higher revenues in both the Sales Representation and Equipment segments, partially offset by a lower gross profit rate in the Sales Representation segment resulting from the new Medical Device Excise Tax imposed by the Patient Protection and Affordable Care Act. Equipment segment gross profit margin increased to 58% for the year ended December 31, 2013 from 55% for the same period in 2012. The increase in the margin is primarily due to higher sales volume and improved margins resulting from the Chinese subsidiaries.
Selling, general and administrative expenses for the year ended 2013 decreased 2% to $23.1 million, compared with $23.5 million for the same period in 2012, resulting primarily from decreased compensation expenses in the Sales Representation segment. In 2012 this segment incurred higher costs in conjunction with the extension of the GEHC agreement.
For the year ended December 31, 2013, the Company had a net loss of $1.1 million, or $0.01 per common share, compared with a net loss of $3.4 million, or $0.02 per common share, for the year ended December 31, 2012.
Net cash decreased by $3.5 million to $8.0 million at December 31, 2013, compared with net cash of $11.5 million as of December 31, 2012. This decrease in cash is mainly attributable to the $1.8 million incurred for our stock repurchase program and an increase in other assets. Based on current forecast, we anticipate cash flow from operating activities to be positive for 2014. As of February 28, 2014, the Company's cash balances were approximately $13.8 million.
Deferred revenue remains substantial, at approximately $18.0 million as of December 31, 2013, to be recognized in the future when the underlying equipment is accepted at the customer site. Our shareholders' equity decreased to $6.5 million as of December 31, 2013, compared with $9.0 million as of December 31, 2012, principally due to the stock buyback and net loss for the year.
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 1-866-393-1344 from the U.S. or 1-631-291-4669, internationally. All dial-in participants must use the following code to access the call: 15577369. 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 April 28, 2014, please dial 1-855-859-2056 or 1-404-537-3406. All dial-in participants must use the following code to access the call: 15577369.
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 YEAR ENDED
STATEMENTS OF OPERATIONS
December 31, 2013
December 31, 2012
December 31, 2013
December 31, 2012
Operating income (loss)
Other (expense) income, net
Income (loss) before taxes
Income tax benefit (expense)
Net income (loss)
December 31, 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.
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SOURCE Vasomedical, Inc.