Vaso Corporation Announces Financial Results for First Quarter 2017
Monday, May 15, 2017 9:00:50 AM ET
PLAINVIEW, NY / ACCESSWIRE / May 15, 2017 / Vaso Corporation ("Vaso") (OTC PINK: VASO) today reported its operating results for the three months ended March 31, 2017.
"Our revenue decreased by $1.2 million, or 7%, in the first quarter of 2017 when compared to the first quarter of the prior year, principally due to a decrease in revenue in the professional sales service segment as a result of a lower equipment delivery volume in the quarter by our partner. We expect this to improve during the remainder of this year as our order bookings in the past several quarters were very strong and deferred commission revenue went up $2.1 million or 13% from a year ago," stated Dr. Jun Ma, President and Chief Executive Officer of Vaso Corporation. "Our information technology, or IT, segment remains the most significant contributor to the Companys revenue, at 60% of total for the first quarter of 2017, and this is also the segment we anticipate most of the growth in the near future. Within the IT segment, a substantial backlog has been built in the healthcare IT VAR business, and it continues to grow."
"Therefore, while we experienced a decrease in revenue and net income in the first quarter of 2017, we expect to see much improvement and continued profitability in 2017. Our financial position remains strong as we continue to generate positive cash flow from operating activities," concluded Dr. Ma.
Financial Results for Three Months Ended March 31, 2017
For the three months ended March 31, 2017, revenue decreased 7% to $16.4 million from $17.5 million for the same period of 2016, due to the decrease of $1.0 million in commission revenue in our professional sales service segment as a result of lower volume of equipment deliveries, as well as lower volume of equipment sales in our equipment segment, partially offset by an increase in revenue in our IT segment.
Gross profit for the first quarter of 2017 decreased 9% to $9.1 million, compared with a gross profit of $10.0 million for the first quarter of 2016. This decrease is primarily the result of the decrease in revenue in the professional sales service segment resulting in a decrease in segment gross profit of $0.8 million and a decrease in gross profit in the equipment segment, partially offset by an increase in gross profit in the IT segment.
Selling, general and administrative (SG&A) expenses for the first quarter of 2017 increased 10% to $10.7 million, compared to $9.7 million for the first quarter of 2016. The increase is primarily attributable to an increase in personnel costs and timing of meeting costs (in the first quarter of 2017 instead of the second quarter of 2016) in the professional sales service segment.
Research and development costs increased 50% to $221 thousand in the first quarter of 2017, compared to the first quarter of 2016, due to an increase in software development costs.
Net loss for the three months ended March 31, 2017 was $2.1 million, compared with a net loss of $0.1 million for the three months ended March 31, 2016.
Net cash provided by operating activities was $0.7 million and $1.9 million for the three months ended March 31, 2017 and 2016, respectively. Net cash at March 31, 2017 was $6.7 million, compared to $7.1 million at December 31, 2016.
Deferred revenue remains substantial, at approximately $19.8 million as of March 31, 2017, 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 $11.0 million as of March 31, 2017 from $12.9 million as of December 31, 2016.
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 four wholly owned subsidiaries. Vaso Technology, Inc. provides network and IT services through two business units: VasoHealthcare IT Corp., a national value added reseller of GE Healthcare ITs Radiology PACS (Picture Archiving and Communication System) software solutions and 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 Solutions, Inc. manages and coordinates the design, manufacture and sales of EECP® Therapy Systems and other medical equipment operations. Vasomedical Global Corp operates the Companys overseas assets including China-based subsidiaries (Biox Instruments Co. Ltd. and Life Enhancement Technology Limited), as well as the minority interest in VSK Medical Limited, a marketing and sales company for ECP products in the international market. Additional information is available on the Companys website at www.vasocorporation.com.
Summarized Financial Information:
FOR THE THREE MONTHS ENDED
STATEMENTS OF OPERATIONS
Operating income (loss)
Other income (expense), net
Loss before taxes
Income tax expense
Income tax expense
Interest (income) expense, 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.
Total current assets
Total current liabilities
Total stockholders equity
Except for historical information contained in this report, 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," "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 Companys management, as well as assumptions made by and information currently available to the Companys 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 Companys 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