PLAINVIEW, NY / ACCESSWIRE / August 14, 2019 / Vaso Corporation ("Vaso") (OTC PINK:VASO) today reported its operating results for the three months ended June 30, 2019.
"The Company's total revenue for the second quarter of 2019 was $17.5 million, a 5% decrease when compared to revenue for the same quarter of 2018, resulting from a lower volume of equipment delivery during the quarter by our partner in our professional sales service segment. Our IT and equipment segments, on the other hand, enjoyed year-over-year quarterly revenue growths of 7% and 11%, respectively. We remain optimistic about continued growth in the IT and equipment segments and improved deliveries of underlying equipment in the professional sales service segment in the third and fourth quarters of 2019," commented Dr. Jun Ma, President and CEO of the Company.
"The cost cutting effort we initiated at the end of 2018 has yielded a substantial decrease in selling, general and administrative ("SG&A") costs, by 9%, in the first half of 2019 when compared to the first half of 2018. We also are implementing additional measures to further integrate and streamline operations to improve performance and efficiency. While it takes time for these measures to fully reveal the intended outcomes, we believe the Company will demonstrate substantially improved financial results by year end," concluded Dr. Ma.
Financial Results for Three Months Ended June 30, 2019
For the three months ended June 30, 2019, revenue decreased by 5% to $17.5 million from $18.4 million for the same period of 2018, resulting from a decrease of $1.7 million in our professional sales service segment revenue, mainly due to lower equipment deliveries by our partner. We expect that deliveries of equipment will improve over the remainder of 2019. Quarterly revenue in our IT and equipment segments increased year-over-year, by $701,000 or 7% and $96,000 or 11%, respectively.
Gross profit for the second quarter of 2019 decreased 10% to $9.4 million, compared with a gross profit of $10.4 million for the second quarter of 2018. This decrease is primarily the result of the decrease in revenue as discussed above, compounded by a lower gross profit margin in the quarter compared to a year ago.
SG&A expenses for the second quarter of 2019 decreased 7% to $9.7 million compared to $10.4 million for the same quarter of 2018. The decrease is primarily attributable to decreases in personnel and other costs in the professional sales service and IT segments, resulting from the cost reduction program the Company initiated in the fourth quarter 2018. We anticipate these costs reduction initiatives will result in significant cost savings for the full year 2019.
Research and development costs decreased 10% to $228 thousand in the second quarter of 2019 compared to the same period in 2018, due to lower software development costs in the equipment segment.
Net loss for the three months ended June 30, 2019 was $750 thousand, compared to a net loss of $446 thousand for the second quarter of 2018. The increase in the loss is principally due to the decrease in revenue in the professional sales service segment. We expect an improvement in performance for the remainder of 2019, as we anticipate an increase in equipment deliveries in the professional sales service segment and improved operating results as an effect of our cost reduction initiatives.
Net cash used in operating activities was $2.4 million in the six months ended June 30, 2019, compared to net cash used in operations of $2.2 million for the same period in 2018. Cash and cash equivalents at June 30, 2019 was $1.0 million, compared to $2.7 million at December 31, 2018.
Total deferred revenue remains substantial, at approximately $17.6 million as of June 30, 2019, which will be recognized in the future when the underlying equipment or services are delivered and accepted at the customer site. Our shareholders' equity decreased to $2.2 million as of June 30, 2019 from $5.6 million as of December 31, 2018.
We have incurred net losses from operations for the years ended December 31, 2018 and 2017 and for the six months ended June 30, 2019. We maintain lines of credit from a lending institution which will require further extensions after their current December 18, 2019 maturity date; as well as other notes payable that mature within twelve months from June 30, 2019. Our ability to continue operating as a going concern is dependent upon achieving profitability, extending the maturity date of our existing lines of credit and notes payable, or through additional debt or equity financing.
Vaso Corporation is a diversified medical technology company with several distinctive but related specialties: managed IT systems and services, including healthcare software solutions and network connectivity services; professional sales services for diagnostic imaging products; and design, manufacture and sale of proprietary medical devices.
The Company operates through three wholly owned subsidiaries:
- VasoTechnology, Inc. provides network and IT services through two business units: VasoHealthcare IT Corp., a national value added reseller of Radiology Information System ("RIS"), Picture Archiving and Communication System ("PACS"), and other software solutions from GEHC Digital and other vendors as well as related services, including implementation, management and support; and NetWolves Network Services LLC, a managed network services provider with an extensive, proprietary service platform to a broad base of customers.
- Vaso Diagnostics, Inc. d.b.a. VasoHealthcare, provides professional sales services and is the operating subsidiary for the exclusive sales representation of GE Healthcare diagnostic imaging products in certain market segments in the USA.
- VasoMedical, Inc. manages and coordinates the design, manufacture and sales of EECP® Therapy Systems and other medical equipment operations, as well as operates the Company's overseas assets including China-based subsidiaries.
Additional information is available on the Company's website at www.vasocorporation.com.
Summarized Financial Information
THREE MONTHS ENDED
SIX MONTHS ENDED
STATEMENTS OF OPERATIONS
|June 30, 2019||June 30, 2018||June 30, 2019||June 30, 2018|
Other (expense) income, net
Loss before taxes
Income tax expense
Income tax expense
Interest expense (income), net
Depreciation and amortization
Non-cash stock-based compensation
*Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation
|December 31, 2018|
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 report, words such as "anticipates," "believes," "could," "estimates," "expects," "may," "optimistic," "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 IT and healthcare; continuation of the GEHC agreements; the impact of competitive technology 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; 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.
Michael J. Beecher
SOURCE: Vaso Corporation
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