Vasomedical Announces Second Quarter 2016 Financial Results
Revenue and Operating Income Grew Year-Over-Year by 68% and 28%, Respectively
PLAINVIEW, NY / ACCESSWIRE / August 15, 2016 / Vasomedical, Inc. ("Vasomedical") (OTC PK: VASO) today reported its operating results for the three months ended June 30, 2016.
"We are pleased to report that the Company recorded $18.2 million of total revenue during the second quarter of 2016, a 68% increase from the same quarter a year ago, due mainly to the inclusion of the NetWolves operations we acquired at the end of May 2015 as well as the growth in the healthcare IT VAR (value added resale) business we started in late 2014. Our proprietary equipment business unit also saw significant growth and improvement during the quarter," commented Dr. Jun Ma, President and Chief Executive Officer of Vasomedical, Inc. "Adjusted EBITDA was $886 thousand and $1.6 million for the three- and six-month period ending June 30, respectively, compared to $751 thousand and $729 thousand for the same periods last year, representing a growth of 18% and 119% year-over-year. We also recorded improvement in net income for the second quarter and first half of 2016. Given this momentum as well as our historical trend of being more profitable in the second half of the year, we feel confident in delivering the third consecutive year of profitability in 2016."
"It is exciting to see significant revenue growth from our healthcare IT VAR operations in the second quarter of 2016. Moreover, the substantial backlog in this business unit continues to grow, and our team is working hard to turn it into revenue and profit as we accelerate the implementation of the underlying IT services for the customers," concluded Dr. Ma.
Three Months Ended June 30, 2016 Financial Results
For the three months ended June 30, 2016, revenue increased by 68% to $18.2 million from $10.8 million for the same period of 2015. This is primarily attributable to an increase of $7.3 million of revenue in our IT segment, $6.5 million of which was from the NetWolves subsidiary the Company acquired in the end of May 2015, and an increase of $841 thousand, or 1781%, in our healthcare IT VAR business. Additionally, equipment segment revenue increased 23% to $1.2 million.
Gross profit for the second quarter of 2016 increased 38% to $10.1 million, compared with $7.3 million for the second quarter of 2015. The increase was principally due to the increase of $2.8 million in the IT segment, including $2.7 million from our NetWolves operations, and an increase of $258 thousand in our equipment segment, offset by a slightly lower gross profit in our professional sales services segment.
Selling, general and administrative (SG&A) expenses for the second quarter of 2016 increased to $9.7 million from $7.0 million for the second quarter last year. The increase is primarily due to including three months of the NetWolves operations in the quarter, compared to only one month of NetWolves operations for the second quarter 2015.
Operating income for the second quarter 2016 was $264 thousand, compared to $206 thousand for the same period in 2015, representing an increase of 28%. The improvement in operating income was due to the increase in gross profit and lower SG&A expenses relative to revenue. SG&A expenses were 53% of revenues for the quarter ended June 30, 2016, compared to 64% of revenues for the same period in 2015. Net income for the three months ended June 30, 2016 was $213 thousand, compared with net income of $191 thousand for the three months ended June 30, 2015, an increase of 12%.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation) rose to $0.9 million for the three months ended June 30, 2016, compared to $0.8 million for the same period a year ago, representing an increase of 18%.
Net cash generated from operating activities in the first half of 2016 was $3.7 million. As of June 30, 2016, the Company had cash and cash equivalents of approximately $5.6 million, compared to cash and cash equivalents of $2.2 million at December 31, 2015. We anticipate continued positive cash flows from operations for the remainder of the year.
Conference Call Information
The Company will host a conference call on Monday, August 15, 2016 at 11:00 a.m. ET featuring remarks by Jun Ma, Ph.D., President and CEO, Peter Castle, Chief Operating Officer, and Michael Beecher, Chief Financial Officer of Vasomedical. To join the conference call, please dial 1-877-407-8033 from the U.S. or 1-201-689-8033 internationally. Please call at least five minutes before the scheduled start time. The conference call will also be available via webcast and can be accessed through the Investor Relations section of Vasomedical's website, http://www.vasomedical.com/. Please allow extra time prior to the call to visit the site and download any necessary software to listen to the live broadcast.
A replay of the conference call will be available approximately two hours after completion of the live conference call at http://www.vasomedical.com/. To access the dial-in replay of the call, which will be available until September 15, 2016, please dial 1-877-660-6853 or 1-201-612-7415. All dial-in participants must use the following code to access the call: 13643094.
About Vasomedical
Vasomedical, Inc. is a diversified medical technology company with several distinctive but related specialties: professional sales services for diagnostic imaging products; managed IT systems and services, including healthcare software solutions and network connectivity services; and design, manufacture and sale of proprietary medical devices.
Vasomedical operates through four wholly owned subsidiaries. Vaso Diagnostics, Inc. d.b.a. VasoHealthcare (www.vasohealthcare.com), 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. Vaso Technology, Inc. provides network and IT services through two business units: VasoHealthcare IT Corp., a national value added reseller of GE Healthcare IT's Radiology PACS (Picture Archiving and Communication System) software solutions and related services, including implementation, management and support, and NetWolves Network Services LLC (http://www.netwolves.com), a managed network services provider with an extensive, proprietary service platform to a broad base of customers. Vasomedical Solutions, Inc. (http://www.vasosolutions.com), manages and coordinates the design, manufacture and sales of EECP® Therapy Systems and other medical equipment operations. Vasomedical Global Corp. (http://www.vasoglobal.com), operates the Company's China-based subsidiaries, including Biox Instruments Co. Ltd. and Life Enhancement Technology Limited. It is also the minority shareholder of VSK Medical Limited, a marketing and sales company for ECP products in the international market. Additional information is available on the Company's website at http://www.vasomedical.com.
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", "feel", "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 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.
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