ROCHESTER, New York, May 3 /PRNewswire-FirstCall/ -- VirtualScopics, Inc. , a leading developer of image-related biomarkers, today announced sales for the first quarter 2006 rose to $1.024 million, a 46% increase over the prior year.
Net loss for the first quarter was $994,133, which included $424,884 of non-cash compensation expense related to the adoption of a new accounting rule. Excluding non-cash items, the net loss for the three months ended March 31, 2006 was $464,752, an improvement of $105,779, or 19%, over the prior year's comparable period.
The gross margin for the first quarter of 2006 was 37%, compared to 24% for the first quarter of 2005. The improvement in the gross margin is largely attributable to process efficiencies and the higher volume of sales.
"We are extremely pleased with the record sales for the quarter which was a direct result of the entire company's efforts in sales, operations and development," stated Robert Klimasewski, president and CEO of VirtualScopics. "We continue to receive favorable comments from our existing customer base as to the benefits they derive from our services. Our focus on delivering a quality service has resulted in the ongoing interest from current and new customers."
VirtualScopics will hold its annual stockholders' meeting on May 11, 2006 at 11am at the Country Club of Rochester.
About VirtualScopics, Inc.
VirtualScopics, Inc. is a provider of advanced medical image analysis services. The company evolved from research first carried out at the University of Rochester Medical Center and School of Engineering. VirtualScopics has created a suite of image analysis tools used in detecting and analyzing specific structures in volumetric medical images, as well as characterizing minute changes in structures over time, providing vital information to support clinical trials and diagnostic applications. The firm's proprietary software algorithms can assemble hundreds of separate medical images taken during an MRI session into a single, three-dimensional model, bringing a new and previously unobtainable source of data to clinical researchers. For more information about VirtualScopics, visit http://www.virtualscopics.com.
Forward-Looking Statements
The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created thereby. These forward-looking statements include, but are not limited to, statements regarding the awards of a potential contract from the U.S. Department of Defense and the expected benefits to the Company from that award and its existing contract with Pfizer and/or statements preceded by, followed by or that include the words "believes," "could," "expects," "anticipates," "estimates," "intends," "plans," "projects," "seeks," or similar expressions. Forward-looking statements deal with the Company's current plans, intentions, beliefs and expectations. Investors are cautioned that all forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Many of these risks and uncertainties are discussed in the Company's Current Report on Form 8-K for November 4, 2005 filed with the Securities and Exchange Commission (the "SEC"), and in any subsequent reports filed with the SEC, all of which are available at the SEC's website at http://www.sec.gov. These include without limitation: risks related to the dependence on our strategic alliance with Pfizer until we can diversify our customer base; risks of contract performance; risks of contract termination; and, our ability to successfully enter into a contract with the Department of Defense for the award we obtained and our ability to do so on terms favorable to us. Factors that could cause or contribute to such differences include, but are not limited to, those discussed from time to time in reports filed by the Company with the Securities and Exchange Commission.
CONTACT: Tracy Bagatelle-Black Bagatelle-Black Public Relations 661/263-1842 tracy@bagatelleblack.com VirtualScopics, Inc. Consolidated Statements of Operations (unaudited) Three Months Ended March 31, 2006 2005 Revenue $1,024,353 $699,063 Cost of services 640,747 530,603 Gross profit 383,606 168,460 Operating expenses: Research and development 239,299 231,603 Sales and marketing 186,582 177,460 General and administrative 451,872 328,499 Stock option compensation expense 424,884 - Depreciation and amortization 104,497 97,184 Total operating expenses 1,407,134 834,746 Operating loss (1,023,528) (666,286) Other income (expense) Interest income 36,572 7,774 Other expense (7,177) (9,203) Total other income (expense) 29,395 (1,429) Net Loss $(994,133) $(667,715) Net loss per share Basic and diluted $(0.05) $(0.04) Weighted average shares used in computing net loss per share Basic and diluted 21,889,075 17,326,571 VirtualScopics, Inc. Consolidated Balance Sheet As of March 31, 2006 (unaudited) Assets Current assets Cash and cash equivalents $5,382,309 Accounts receivable 719,343 Prepaid expenses and other assets 383,672 Total current assets 6,485,324 Patents, net 1,853,056 Property and equipment, net 355,920 Other assets 508,965 Total assets $9,203,265 Liabilities and Stockholders' Equity Current liabilities Notes payable, current portion $72,000 Accounts payable and accrued expenses 421,459 Accrued payroll 293,112 Unearned revenue 372,601 Total current liabilities 1,159,172 Notes payable - long term 65,838 Commitments and Contingencies Stockholders' Equity Preferred stock, $0.001 par value; liquidation preference $1,000 per share; 15,000,000 shares authorized; 8,400 shares designated Series A; 7,000 issued and outstanding 7 Common stock, $0.001 par value; 85,000,000 shares authorized; 21,889,075 shares issued and outstanding 21,889 Additional paid-in capital 9,510,250 Accumulated deficit (1,553,891) Total stockholders' equity 7,978,255 Total liabilities and stockholders' equity $9,203,265
VirtualScopics, Inc.CONTACT: Tracy Bagatelle-Black of Bagatelle-Black Public Relations,+1-661-263-1842, or tracy@bagatelleblack.com, for VirtualScopics, Inc.
Web site: http://www.virtualscopics.com/
