ROCHESTER, N.Y., Feb. 21, 2012 /PRNewswire/ -- VirtualScopics, Inc. (NASDAQ: VSCP), a leading provider of quantitative imaging for clinical trials, today announced revenues of $14,281,603 for the year ended December 31, 2011 compared to $13,393,120 for the year ended December 31, 2010, an increase of $888,483, or 7%. Net income for the twelve months ended December 31, 2011 was $703,295 compared to a net loss of $629,042 for the twelve months ended December 31, 2010.
Other full year results include:
- Gross profit of $6,274,138 compared to $6,824,092 for the full year of 2010.
- Research and development expenditures of $1,324,463, representing a $296,373, or 29%, increase compared to prior year.
- Earnings before interest, taxes, depreciation and amortization, and excluding stock compensation expense and gain/loss from derivative financial instrument ("Adjusted EBITDA") of $1,407,118 for the year ended December 31, 2011 compared to Adjusted EBITDA of $2,247,747 for the comparable period in 2010.
- Cash balance of $5,737,009 compared to $4,576,060 as of December 31, 2010.
Fourth quarter ended December 31, 2011 results were:
- Revenues of $3,500,892 compared to $3,509,930 in the fourth quarter of 2010.
- Gross profit of $1,356,753 compared to $1,699,680 in the fourth quarter of 2010.
- Operating loss of $141,747 compared to operating income of $248,100 in the fourth quarter of 2010.
- Adjusted EBITDA of $183,271 compared to $620,404 for the fourth quarter of 2010.
Jeff Markin, president and chief executive officer of VirtualScopics stated, "2011 was an important year for VirtualScopics as we dedicated significant focus on controlling overall costs while continuing to make the investments we believed were necessary to gain operational efficiencies while expanding our capabilities. This focus enabled us to meet our initial guidance goal for gross margin." He added, "We closed the year with a 7% increase on revenues of $14.3 million which was in line with the updated guidance we provided in the third quarter. Of note, we were pleased to add eight new clients to the business in 2011, bringing our customer base to over 35 of the leading pharmaceutical and biotech companies in the world." He continued, "2011 also saw the strengthening of our strategic alliance with PPD resulting in the recent announcement of the expansion of our agreement into new therapeutic areas. We believe this expansion combined with the aforementioned operational and sales successes in the core business will pay dividends as we look to expand the markets we serve."
"VirtualScopics continues to be a solid cash generating business," stated Molly Henderson, chief business and financial officer of VirtualScopics. She continued, "Our focus on cash management while prudently investing in the business resulted in the generation of over $1,400,000 in Adjusted EBITDA bringing our cash balance to $5.7 million at the end of 2011. The amount of cash on hand will play a significant role in enabling us to make investments in new market areas." She added, "One such investment will be our expansion of the use of quantitative imaging into the personalized medicine market. We recently received comments from the FDA regarding the 510(k) we filed in October of 2011 and we are diligently working toward the approval of our first product in this market." She concluded, "As we look toward 2012, we are conservatively estimating our targeted full year 2012 revenues to range between $14.5 million - $15.5 million."
Jeff Markin and Molly Henderson will provide a business update and discuss these results during the conference call today at 9:00 a.m. ET. Interested participants should call 877-407-8035 when calling within the United States or +1 201 689 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 Generally Accepted Accounting Principles ("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-based compensation expense and the loss/gain 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 Accounting Standards Codification ("ASC") 815-40 and the non-cash variable nature of stock-based 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.
