ROCHESTER, N.Y., Aug. 13, 2013 /PRNewswire/ -- VirtualScopics,
Inc. (NASDAQ: VSCP), a leading provider of quantitative imaging,
today announced revenues of $3,706,677 for the quarter ended June 30, 2013 compared to $3,335,861 for the quarter ended June 30, 2012. Net income for the three months
ended June 30, 2013 was $134,286 compared to a net loss of $62,966 for the three months ended June 30, 2012. Year to date 2013 new project
awards totaled $15.9 million as
compared to $4.6 million during the
same period in 2012, a 246% increase.
Other second quarter ended June 30,
2013 results were:
- Gross profit of $1,770,083
compared to $1,343,937 in the second
quarter of 2012.
- Gross margin of 48% compared to 40% in the second quarter of
2012.
- Operating income of $131,371
compared to an operating loss of $166,694 in the second quarter of 2012.
- Adjusted EBITDA of $333,445
compared to $72,973 for the second
quarter of 2012.
Jeff Markin, president and chief
executive officer of VirtualScopics stated, "We are very pleased
with our performance in the second quarter which exhibited a 14%
growth in revenue, a rebound in gross margins to 48%, resulting in
a significant improvement in our operating performance and cash
generation as compared to the first quarter of 2013." He continued,
"We are also pleased with the amount of new project awards that we
have received so far in 2013. New project awards are up more
than 240% versus the similar period last year, and exceed the
amount of new awards received during the full year of 2012." He
concluded, "We are especially encouraged that more than 40% of our
new study awards in 2013 are through our alliance with PPD which
visibly validates the significant client benefits offered by our
joint clinical and imaging solution."
"Aside from the second quarter 2013 growth in revenues, one of
the strongest financial accomplishments during the quarter was our
gross margin performance," stated Molly
Henderson, chief business and financial officer of
VirtualScopics. She added, "By reporting margins approaching 50% we
gained greater confidence in the productivity of our enhanced Phase
III analysis tools." She continued, "Additionally, we are pleased
to return to a quarter of generating cash as reported in our
positive Adjusted EBITDA." She concluded, "During the second
quarter of 2013, a single accelerated project represented a
significant portion of the quarterly revenues. We do not anticipate
a project of this magnitude recurring in a similar condensed time
period during the remainder of this year. As a result, we
estimate that our full year 2013 revenues will range between
$10.5 million and 11 million."
Jeff Markin and Molly Henderson will provide a business update
and discuss these results during the Annual Stockholders' Meeting
today at 11:00 am ET at the Country
Club of Rochester in Rochester, New York. For those not able to
attend in person, the script of the meeting will be available on
the U.S. Securities and Exchange Commission's website at
www.sec.gov. Additionally, the Company's management will hold a
question and answer call at 11:00 am
ET on Wednesday, August 14,
2013, for stockholders not able to attend the Annual Meeting
in person. Interested participants should call 877-407-8035 when
calling within the United States
or +1 201 689 8035 when calling internationally.
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 liabilities
(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.
Forward-Looking Statements
The statements contained in this press release that are not purely
historical are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended, and are
intended to be covered by the safe harbors created thereby. These
forward-looking statements include, but are not limited to,
statements regarding the expected benefits of the Company's
investment in infrastructure and new customer contract signings and
awards and/or statements preceded by, followed by or that include
the words "believes," "could," "expects," "anticipates,"
"estimates," "intends," "plans," "projects," "seeks," or similar
expressions. Forward-looking statements deal with the Company's
current plans, intentions, beliefs and expectations. Investors are
cautioned that all forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Many of these
risks and uncertainties are discussed in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the Securities and
Exchange Commission (the "SEC"), and in any subsequent
reports filed with the SEC, all of which are available at the SEC's
website at www.sec.gov. These include without limitation: the risk
of cancellation or delay of customer contracts or specifically as
it relates to contact awards, the risk that they may not get
signed. Other risks include the company's dependence on its
largest customers and risks of contract performance, protection of
our intellectual property and the risks of infringement of the
intellectual property rights of others. All forward-looking
statements speak only as of the date of this press release and the
Company undertakes no obligation to update such forward-looking
statements.
-Financial tables to follow-
CONTACTS:
|
Company
Contact:
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|
Molly
Henderson
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|
Chief Business and
Financial Officer, Sr. Vice President
|
|
500 Linden
Oaks
|
|
Rochester, New York
14625
|
|
+1 585
249.6231
|
VirtualScopics,
Inc. and Subsidiary
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended June 30,
|
|
For the Six Months
Ended June 30,
|
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
3,546,607
|
|
$
3,098,316
|
|
$
5,829,438
|
|
$
6,391,974
|
Reimbursement
revenues
|
|
160,070
|
|
237,545
|
|
409,826
|
|
646,045
|
|
|
Total
revenues
|
|
3,706,677
|
|
3,335,861
|
|
6,239,264
|
|
7,038,019
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues*
|
|
1,776,524
|
|
1,754,379
|
|
3,274,063
|
|
3,637,124
|
Cost of reimbursement
revenues
|
|
160,070
|
|
237,545
|
|
409,826
|
|
646,045
|
|
|
Total cost of
services
|
|
1,936,594
|
|
1,991,924
|
|
3,683,889
|
|
4,283,169
|
|
|
|
Gross
profit
|
|
1,770,083
|
|
1,343,937
|
|
2,555,375
|
|
2,754,850
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
333,423
|
|
357,839
|
|
767,268
|
|
714,166
|
|
Sales and
marketing
|
|
427,373
|
|
311,393
|
|
781,982
|
|
642,465
|
|
General and
administrative
|
|
688,213
|
|
615,159
|
|
1,578,249
|
|
1,269,899
|
|
Stock-based
compensation expense
|
|
99,149
|
|
119,249
|
|
227,093
|
|
295,185
|
|
Depreciation and
amortization
|
|
90,554
|
|
106,991
|
|
186,867
|
|
218,610
|
|
|
|
Total operating
expenses
|
|
1,638,712
|
|
1,510,631
|
|
3,541,459
|
|
3,140,325
|
Operating income
(loss)
|
|
131,371
|
|
(166,694)
|
|
(986,084)
|
|
(385,475)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
3,342
|
|
715
|
|
4,351
|
|
1,130
|
|
Other
expense
|
|
(9,510)
|
|
(5,446)
|
|
(10,881)
|
|
(5,713)
|
|
Unrealized loss on
change in
|
|
|
|
|
|
|
|
|
|
fair value of
derivative liabilities
|
|
9,083
|
|
108,459
|
|
13,953
|
|
(286,453)
|
Total other income
(expense)
|
|
2,915
|
|
103,728
|
|
7,423
|
|
(291,036)
|
|
Net income
(loss)
|
|
134,286
|
|
(62,966)
|
|
(978,661)
|
|
(676,511)
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
deemed dividend
|
|
-
|
|
1,806,919
|
|
-
|
|
1,806,919
|
Preferred stock
dividends
|
|
42,000
|
|
41,333
|
|
84,000
|
|
53,333
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
|
$
92,286
|
|
$
(1,911,218)
|
|
$
(1,062,661)
|
|
$
(2,536,763)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per share
|
|
$
0.00
|
|
$
(0.06)
|
|
$
(0.04)
|
|
$
(0.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
basic
|
|
29,799,523
|
|
29,706,074
|
|
29,799,523
|
|
29,538,381
|
|
diluted
|
|
34,671,384
|
|
29,706,074
|
|
29,799,523
|
|
29,538,381
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Cost of revenues
includes non-cash stock-based compensation expense of $12,371 and
$13,427 for the three months ended
|
|
June 30, 2013
and 2012, respectively and $25,214 and $26,758 for the six months
ended June 30, 2013 and 2012, respectively.
|
VirtualScopics,
Inc. and Subsidiary
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2013
|
|
2012
|
Assets
|
(unaudited)
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash
|
$
7,145,743
|
|
$
8,523,807
|
Accounts receivable,
net
|
2,968,997
|
|
1,762,507
|
Prepaid expenses and
other current assets
|
311,685
|
|
437,698
|
Total current
assets
|
10,426,425
|
|
10,724,012
|
Patents,
net
|
1,396,844
|
|
1,470,436
|
Property and
equipment, net
|
280,007
|
|
399,569
|
Other
assets
|
-
|
|
5,428
|
Total
assets
|
$
12,103,276
|
|
$
12,599,445
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued expenses
|
$
746,042
|
|
$
872,652
|
Accrued
payroll
|
664,251
|
|
481,661
|
Unearned
revenue
|
446,714
|
|
272,509
|
Dividends
payable
|
209,333
|
|
125,333
|
Total current
liabilities
|
2,066,340
|
|
1,752,155
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
Convertible preferred
stock, $0.001 par value; 15,000,000 shares
authorized;
|
|
|
Series C-1 3,000
shares authorized; issued and outstanding, 3,000 shares at June 30,
2013 and December 31, 2012; liquidation preference $1,000 per
share
|
3
|
|
3
|
Series B 6,000 shares
authorized; issued and outstanding, 600 at June 30, 2013 and
December 31, 2012; liquidation preference $1,000 per
share
|
1
|
|
1
|
Series A 8,400 shares
authorized; issued and outstanding, 2,190 at June 30, 2013 and
December 31, 2012; liquidation preference $1,000 per
share
|
2
|
|
2
|
Series C-2 3,000
shares authorized; issued and outstanding, 0 shares at June 30,
2013 and December 31, 2012; liquidation preference $1,000 per
share
|
-
|
|
-
|
Common Stock, $0.001
par value; 85,000,000 shares authorized; issued 29,958,795 and
29,799,523 shares at June 30, 2013 and December 31, 2012,
respectively; outstanding, 29,799,523 shares at June 30, 2013 and
December 31, 2012, respectively
|
29,800
|
|
29,800
|
Additional paid-in
capital
|
21,949,391
|
|
21,781,084
|
Accumulated
deficit
|
(11,942,261)
|
|
(10,963,600)
|
Total stockholders'
equity
|
10,036,936
|
|
10,847,290
|
Total liabilities and
stockholders' equity
|
$
12,103,276
|
|
$
12,599,445
|
|
|
|
|
|
|
Three Months
Ended
|
Three Months
Ended
|
Adjusted EBITDA
(non-GAAP measurement):
|
|
June 30,
2013
|
June 30,
2012
|
|
|
(unaudited)
|
(unaudited)
|
|
|
|
|
Net income
(loss)
|
|
$
134,286
|
$
(62,966)
|
Interest income and
other expenses
|
|
6,168
|
4,731
|
Depreciation and
amortization
|
|
90,554
|
106,991
|
Stock-based
compensation expense
|
|
111,520
|
132,676
|
Unrealized gain on
change in fair value of derivative liabilities
|
|
(9,083)
|
(108,459)
|
Adjusted
EBITDA
|
|
$
333,445
|
$
72,973
|
Basic Adjusted
EBITDA per common share, non-GAAP
|
|
$
0.01
|
$
0.00
|
Diluted
Adjusted EBITDA per common share, non-GAAP
|
|
$
0.01
|
$
0.00
|
|
|
|
|
|
|
Six Months
Ended
|
Six Months
Ended
|
Adjusted EBITDA
(non-GAAP measurement):
|
|
June 30,
2013
|
June 30,
2012
|
|
|
(unaudited)
|
(unaudited)
|
|
|
|
|
Net loss
|
|
$
(978,661)
|
$
(676,511)
|
Interest income and
other expenses
|
|
6,530
|
4,583
|
Depreciation and
amortization
|
|
186,867
|
218,610
|
Stock-based
compensation expense
|
|
252,307
|
321,943
|
Unrealized (gain)
loss on change in fair value of derivative liabilities
|
|
(13,953)
|
286,453
|
Adjusted
EBITDA
|
|
$
(546,910)
|
$
155,078
|
Basic Adjusted
EBITDA per common share, non-GAAP
|
|
$
(0.02)
|
$
0.01
|
Diluted
Adjusted EBITDA per common share, non-GAAP
|
|
$
(0.02)
|
$
0.01
|
SOURCE VirtualScopics, Inc.