ROCHESTER, N.Y., Feb. 25 /PRNewswire-FirstCall/ -- VirtualScopics, Inc. , a leading provider of quantitative imaging for clinical trials, announced today that the company reported net income in the fourth quarter of 2009 of $373,917. This is the first reported quarterly net income in the company’s history. Fourth quarter 2008 reported a loss of ($304,536).
Other highlights for the fourth quarter ended December 31, 2009 include:
Highlights for the full year ended December 31, 2009 include:
“We are delighted to report net income for the first time, yet we continue to believe Adjusted EBITDA is the best measure of the company’s success,” stated Jeff Markin, president and chief executive officer of VirtualScopics. He added, “Adjusted EBITDA reflects the true cash generation and profitability of the company. For the full year 2009, our Adjusted EBITDA increased $2.4 million when compared to 2008, resulting in an Adjusted EBITDA of nearly $1.3 million for 2009.” He further added, “To meet the growing demand of our customers, we increased our operational staff by nearly 50% throughout 2009 while maintaining a corresponding focus on operational efficiency, thereby enabling us to report a 54% gross profit margin last year. We believe this will effectively position us to deliver upon the project volume we expect in 2010.”
“Over the past two years we’ve increased our revenues by 85% and reduced our operating loss by 94%,” stated Molly Henderson, chief business and financial officer of VirtualScopics. She continued, “This represents a nearly 90% net margin on new business which not only demonstrates the strength of our business but also the efficiency of our operations.” She added, “Of further significance during 2009 was the increase in our average contract size which ultimately demonstrates our customers’ confidence and the value of our services. In 2009, our average contract size increased 50% to just over $500,000 per contract.” Ms. Henderson concluded, “2009 was the cornerstone year for us in that we exceeded $10 million in revenues, $5.6 million in gross profit, and generated over $1 million in cash. We fully anticipate leveraging this growth throughout 2010 and beyond. As such, we estimate revenue growth of at least 25% for 2010 bringing our forecasted full-year revenues over $13 million with a full-year gross margin approximating 50% in 2010 and Adjusted EBITDA of $1.5 million.”
Jeff Markin and Molly Henderson will provide a business and 2010 update and discuss these results during the conference call on Thursday, February 25, 2010 at 11:00 a.m. EST. Interested participants should call 877-407-8035 when calling within the United States or 201-689-8035 when calling internationally. This call can also be accessed at www.virtualscopics.com and will be available for 30 days after the call.
The Company provides Adjusted EBITDA as a supplemental measure to GAAP regarding the Company’s operational performance. The Company defines Adjusted EBITDA as earnings less interest, taxes (if any), depreciation and amortization as further adjusted to exclude stock compensation expense and the loss on derivative instrument (mark to market adjustment for warrants). This financial measure excludes the impact of certain items and, therefore, has not been calculated in accordance with GAAP. The Company’s method of calculating Adjusted EBITDA, however, may differ from methods used by other companies, and, as a result, Adjusted EBITDA measures disclosed herein may not be comparable to other similarly titled measures used by other companies. The Company continues to provide information in accordance with GAAP, however, with the adoption of ASC 815-40 and the non-cash variable nature of stock compensation expense and their very substantial impact on the overall reported net income/loss, the Company believes it is also helpful for investors to receive additional information relating more specifically to the Company’s operating results. Accordingly, the Company has presented Adjusted EBITDA which excludes the non-cash effects of ASC 815-40 and ASC 718 on its financial results. Management uses Adjusted EBITDA (a) to evaluate the Company’s financial performance, (b) to set internal spending budgets, and (c) to measure operational profitability. In addition, investors have requested these non-GAAP financial measures as a means of providing consistent and comparable information with past reports of financial results. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, net income/(loss), below.
About VirtualScopics, Inc.
VirtualScopics, Inc. is a leading provider of imaging solutions to accelerate drug and medical device development. VirtualScopics has developed a robust software platform for analysis and modeling of both structural and functional medical images. In combination with VirtualScopics’ industry-leading experience and expertise in advanced imaging biomarker measurement, this platform provides a uniquely clear window into the biological activity of drugs and devices in clinical trial patients, allowing sponsors to make better decisions faster. For more information about VirtualScopics, visit 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 expected benefits of the Company’s investment in infrastructure and new customer contract signings and awards 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2008 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 www.sec.gov. These include without limitation: the risk of cancellation or delay of customer contracts or specifically as it relates to contact awards, the risk that they may not get signed. Other risks include the company’s dependence on its largest customers and risks of contract performance, protection of our intellectual property and the risks of infringement of the intellectual property rights of others. All forward-looking statements speak only as of the date of this press release and the Company undertakes no obligation to update such forward-looking statements.
-Financial tables to follow-
CONTACT: Molly Henderson, Chief Business and Financial Officer,
+1-585-249-6231
Web site: http://www.virtualscopics.com/
