WESTBURY, NY--(Marketwired - August 13, 2015) - Vasomedical, Inc. ("Vasomedical") (OTCBB: VASO) today reported its operating results for the three months ended June 30, 2015.
"We are pleased to report continued growth at Vasomedical in the second quarter of 2015, during which our total revenue grew to $10.9 million, a $3.0 million increase from the same quarter a year ago. The growth was primarily due to the inclusion of one month of operations of NetWolves, which we acquired at the end of May 2015. Our existing operations also saw a year-over-year growth of 2.1% and 3.5% during the 3-month and 6-month periods ended June 30, 2015, respectively," stated Jun Ma, President and CEO of Vasomedical, Inc. "As a result, we recorded a net income of $191 thousand for the second quarter of 2015, compared to a net loss of $176 thousand for the same period in 2014. We are confident that, based on our current expectations, we are on track to be profitable for the year 2015."
"We are very excited about the newly acquired NetWolves, as, again, the second quarter financial results reflected only one month of activity from its operations. However, the impact of NetWolves operations to our revenue and profitability is beyond just the consolidation of its current operations. We believe the synergies it brings to our healthcare IT unit are more significant: while the integration enhances our healthcare IT value added resale business, we will also see more growth opportunities for NetWolves managed network services among healthcare customers," added Dr. Ma.
Three Months Ended June 30, 2015 Financial Results
For the three months ended June 30, 2015, revenue increased $3.0 million, or 38% year-over-year, to $10.9 million compared to $7.9 million for the same period of 2014. The increase was principally due to $2.8 million in revenue from our recently acquired NetWolves operations. Sales Representation segment revenue increased $352 thousand or 5% to $7.0 million, due primarily to increased commission rates, while revenue from the Equipment Segment declined $184 thousand or 16% to $1.0 million, due primarily to lower EECP® revenues.
Gross profit for the second quarter of 2015 increased 34% to $7.3 million, compared with $5.5 million for the second quarter of 2014. The increase is primarily due to $1.2 million of gross profit in the IT segment as a result of the NetWolves acquisition and an increase of $0.7 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 second quarter of 2015 was $7.0 million or 64% of revenues, compared with $5.5 million, or 70% of revenues for the same period last year. The increase in SG&A expenditures resulted primarily from the acquisition of NetWolves, partially offset by lower costs in our Equipment and Sales Representation segments.
Net income for the three months ended June 30, 2015 was $0.2 million, a significant improvement compared to the net loss of $0.2 million for the three months ended June 30, 2014. This improvement is principally due to an increase in gross profit and a decrease in SG&A costs in the Sales Representation segment and lower costs in the Equipment segment.
At June 30, 2015 the Company had net cash and cash equivalents of $2.9 million compared to $9.1 million at December 31, 2014. The decrease is principally due to the cash used for the NetWolves acquisition. We expect our cash position to improve during the remainder of 2015.
Conference Call Information
The Company will host a conference call at 11:00 a.m. ET on August 20, 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 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 20, 2015, please dial 1-877-660-6853 or 1-201-612-7415. All dial-in participants must use the following code to access the call: 13617230.
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: Vaso Diagnostics, Inc. d.b.a. VasoHealthcare, VasoTechnology, Inc., which operates through its subsidiaries VasoHealthcare IT Corp. and Netwolves Network Services LLC, Vasomedical Solutions, Inc., and Vasomedical Global Corp. 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. Netwolves Network Services LLC, a Florida based limited liability company, provides managed network services with an extensive, proprietary service platform to a broad base of customers -- predominantly domestically based, however supporting their needs globally as well -- including many Fortune 500 corporations. 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. Additional information is available on the Company's website at www.vasomedical.com.
Summarized Financial Information
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED ENDED
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June 30, June 30, June 30, June 30,
STATEMENTS OF OPERATIONS 2015 2014 2015 2014
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(In thousands)
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Revenue $ 10,843 $ 7,864 $ 18,297 $ 14,956
Gross profit 7,328 5,482 12,896 10,648
Operating income (loss) 206 (206) (80) (1,294)
Other (expense) income, net (9) 44 30 98
Income (loss) before taxes 197 (162) (50) (1,196)
Income tax benefit (expense) (6) (14) (12) (24)
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Net income (loss) $ 191 $ (176) $ (62) $ (1,220)
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BALANCE SHEETS June 30, 2015 December 31, 2014
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(In thousands)
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Total current assets $ 14,536 $ 28,994
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Total assets $ 46,320 $ 40,991
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Total current liabilities $ 24,820 $ 19,779
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Total stockholders' equity $ 7,980 $ 7,751
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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.
Investor Contacts:
Michael J. Beecher/Amanda Jiang
Investor Relations
Phone: 212-508-5840
Email: mbeecher@vasomedical.com / ajiang@vasomedical.com
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