WESTBURY, N.Y., May 14, 2014 /PRNewswire/ -- Vasomedical,
Inc. ("Vasomedical") (OTC BB: VASO) today reported its operating
results for the three months ended March 31,
2014.
"We are excited to report that during the quarter, the Company
generated positive cash flow of $4.2
million from operating activities, mainly due to our
VasoHealthcare subsidiary achieving the highest commission rate,
which is applied retroactively for all orders booked in 2013,"
stated Jun Ma, President and CEO of
Vasomedical. "As our GEHC business continues to grow, we are taking
advantage of the higher cash inflows and reinvesting in our
business, while continuing our search for opportunities to
complement and diversify our business."
"While total revenues slightly declined by 3% to $7.1 million for the quarter, mainly due to a
decrease in EECP equipment sales, we are optimistic that our
international performance will improve once the recently announced
cooperative agreement with PSK-Health Sci-Tech Development Co.
Ltd., the leading manufacturer of ECP therapy systems in
China, is implemented. This
venture should help Vasomedical expand existing sales presence and
tap into new geographical territories internationally, as well as
substantially reduce sales and marketing costs. We are
currently in the process of reorganizing our EECP business model,
both domestically and internationally, in view of this cooperative
agreement."
"In addition, we strengthened our product portfolio within BIOX
with the introduction of MobiCare™ system, a patented wireless
multi-parameter patient monitoring system, and expect our
China operations to grow. Looking
forward, we believe we are well positioned to achieve profitability
and maintain positive cash flow, and continue to achieve superior
performance from our sales representation business," concluded Dr.
Ma.
Three Months Ended March 31,
2014 Financial Results
For the three months ended March 31,
2014, revenue decreased by 3% to $7.1
million from $7.3 million for
the same period of 2013. This is mainly attributable to a 45%
decline in equipment sales due to decreased EECP®
revenues, which was partially offset by the 4% growth in commission
revenues to $6.2 million, from our
Sales Representation segment. As we have stated previously, EECP
sales are expected to remain soft unless acceptance level for its
currently indicated use and reimbursement policies change
positively. The uncertain timing for this to occur was ultimately
the reason behind the Company's diversification strategy, which
included entering the GEHC representation agreement and acquiring
its Chinese operating companies.
Gross profit for the first quarter of 2014 increased 2% to
$5.2 million, compared with
$5.1 million for the first quarter of
2013. This increase is primarily a result of the higher
commission revenues from the Sales Representation segment, arising
from higher commission rates for orders booked in 2013, partially
offset by lower equipment shipments in the Equipment Segment.
Selling, general and administrative (SG&A) expenses for the
first quarter of 2014 was $6.0
million or 85% of revenues, compared with $5.6 million, or 77% of revenues for the same
period last year. This is mainly attributable to the annual sales
team meeting in the Sales Representation segment during the
quarter, which took place in the second quarter last year.
Net loss for the three months ended March
31, 2014 was $1.0 million, a
60% increased loss compared with a net loss of $652,000 for the three months ended March 31, 2013, as a result of an 8% increase in
selling, general and administrative costs.
Net cash increased by $4.0 million
to $12.0 million at March 31, 2014, compared with net cash of
$8.0 million as of December 31, 2013. This increase in cash is
mainly attributable to the significantly higher commission rate
generated in the fourth quarter of 2013, resulting in significant
cash inflows early in 2014. Based on current forecast, we
anticipate cash flow from operating activities to be positive for
2014.
Deferred revenue remains substantial, at approximately
$17.0 million as of March 31, 2014, to be recognized in the future
when the underlying equipment is delivered and accepted at the
customer site.
Conference Call Information
The Company will host a conference call today at 10:00 a.m. ET featuring remarks by Jun Ma, Ph.D., President and CEO of Vasomedical,
and Michael Beecher, Chief Financial
Officer of Vasomedical. To dial into the conference call, please
dial 1-866-393-1344 from the U.S. or 1-631-291-4669,
internationally. All dial-in participants must use the following
code to access the call: 42076306. 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,
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
www.vasomedical.com. To access the dial-in replay of the call,
which will be available until June 14,
2014, please dial 1-855-859-2056 or 1-404-537-3406. All
dial-in participants must use the following code to access the
call: 42076306.
About Vasomedical
Vasomedical, Inc. is a diversified medical technology company
specializing in the manufacture and sale of medical devices and in
the domestic sale of diagnostic imaging products. The Company
operates through three wholly owned subsidiaries: VasoSolutions,
Vasomedical Global and VasoHealthcare. VasoSolutions manages and
coordinates the design, manufacture and sales of
EECP® Therapy systems, and other medical equipment
operations; Vasomedical Global operates the
Company's China-based subsidiaries; and VasoHealthcare is the
operating subsidiary for the exclusive sales representation of GE
Healthcare diagnostic imaging products in certain markets.
Additional information is available on the Company's website
at www.vasomedical.com.
(Tables to follow)
Summarized Financial Information
|
|
|
|
FOR THE THREE
MONTHS ENDED
|
STATEMENTS OF
OPERATIONS
|
March 31,
2014
|
March 31,
2013
|
|
(In
thousands)
|
Revenue
|
$
|
7,091
|
$
|
7,293
|
Gross
profit
|
$
|
5,164
|
$
|
5,062
|
Operating
loss
|
$
|
(1,090)
|
$
|
(682)
|
Other income
(expense), net
|
$
|
56
|
$
|
38
|
Loss before
taxes
|
$
|
(1,034)
|
$
|
(644)
|
Income tax
expense
|
$
|
(10)
|
$
|
(8)
|
Net loss
|
$
|
(1,044)
|
$
|
(652)
|
|
|
|
BALANCE
SHEETS
|
March 31,
2014
|
December 31,
2013
|
|
(In
thousands)
|
Cash and cash
equivalents
|
$
|
12,009
|
$
|
7,961
|
Total current
assets
|
$
|
22,140
|
$
|
25,931
|
Total
assets
|
$
|
29,923
|
$
|
33,517
|
Total current
liabilities
|
$
|
17,162
|
$
|
19,215
|
Total stockholders'
equity
|
$
|
5,667
|
$
|
6,465
|
Except for historical information contained in this release,
the matters discussed are forward-looking statements that involve
risks and uncertainties. When used in this release, 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 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 the
healthcare environment; the impact of competitive procedures 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; uncertainties about the acceptance of a
novel therapeutic modality by the medical community; continuation
of the GEHC agreement; 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.
Investor Contacts:
Todd
Fromer / Garth Russell
KCSA Strategic Communications
Phone: 212-896-1215 / 212-896-1250
Email: tfromer@kcsa.com / grussell@kcsa.com
SOURCE Vasomedical, Inc.