Net Income Increased 239% to $3.8 Million; Adjusted EBITDA Increased 205% to $5.8 Million on Record Revenue
PLAINVIEW, NY / ACCESSWIRE / March 29, 2016 / Vasomedical, Inc. ("Vasomedical") (OTC PK: VASO) today reported its operating results for the three months and year ended December 31, 2015.
"With a 63% year-over-year growth in annual revenue to a record $57.1 million, including revenue of $20.7 million from seven months of NetWolves operations, we are excited to report a net income of $3.8 million for fiscal year 2015, an increase of 239% from $1.1 million reported for the prior year," stated Dr. Jun Ma, President and Chief Executive Officer of Vasomedical, Inc. "Our VasoHealthcare subsidiary continued to be a successful and most significant contributor to our financial results in 2015, and our VasoTechnology division began to play an important role in our total revenue during the year, while performance in our proprietary equipment business also improved for 2015, especially in the international market. Further, our operations generated positive cash flow of $6.5 million in 2015, substantially strengthening the Company's financial position with cash balances of approximately $5 million as of March 25, 2016."
"The year 2015 represented another milestone as we not only saw great growth in the top- and bottom-line numbers, we have also built our Company into a robust enterprise with a diversified revenue stream, with approximately 44%, 50% and 6% of revenue in 2015 from our professional sales services, IT and equipment segments, respectively, on an annualized basis. We expect continued revenue growth and profitability in 2016 as our growth strategy continues to show positive results. We remain optimistic of the outlook for NetWolves and the value added reseller business for the GEHC IT solutions, and look forward to significant progress in this IT segment," concluded Dr. Ma.
Financial Results for Three Months Ended December 31, 2015
For the three months ended December 31, 2015, revenue increased 73.1% to $21.4 million from $12.4 million for the same period of 2014. This is primarily attributable to the inclusion of $9.2 million of revenue from the NetWolves operations in the fourth quarter 2015, offset by a small decrease in revenues from our professional sales services and equipment segments.
Gross profit for the fourth quarter of 2015 increased 37.6% to $12.6 million, compared with a gross profit of $9.2 million for the fourth quarter of 2014. This increase is primarily a result of revenue from our NetWolves subsidiary as noted above, offset by a decrease in gross profit in our equipment segment.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2015 increased 52.6% to $9.9 million compared to $6.5 million for the fourth quarter of 2014. The increase is primarily attributable to including SG&A costs from the NetWolves operations, offset by a decrease in expenses in our professional sales services and equipment segments. SG&A expenses were 46.1% of revenue in the fourth quarter 2015 compared to 52.3% of revenue for the same quarter of 2014.
Net income for the three months ended December 31, 2015 was $2.7 million, compared with a net income of $2.5 million for the three months ended December 31, 2014.
Financial Results for Year Ended December 31, 2015
For the year ended December 31, 2015, revenue increased $22.1 million, or 63.3%, to $57.1 million, compared with $35.0 million for the year 2014. Commission revenues in our professional sales services segment increased by 4.5% to $31.6 million for the year 2015, as compared with $30.2 million for the prior year. The increase was due primarily to higher installations of underlying equipment by GEHC in 2015, offset by lower commission rates for the equipment installed in 2015. Revenue in our IT segment was $21.1 million for the year ended December 31, 2015, compared to revenue of $48 thousand in 2014, mainly as a result of including $20.7 million of revenue from NetWolves in 2015. Equipment segment revenue for the year 2015 decreased by 7% to $4.3 million, compared to $4.7 million in 2014, principally due to a decrease in volume from EECP® sales.
Gross profit for the year ended December 31, 2015 increased 40.4% to $35.4 million, from $25.2 million in 2014. This increase is due primarily to $8.5 million of gross profit from NetWolves and to higher revenue in the professional sales services segment as noted above.
SG&A expenses for the year ended 2015 increased 32.5% to $30.9 million, or 54.2% of revenue, compared with $23.3 million, or 66.7% of revenue, for the same period in 2014. The increase resulted primarily from including the NetWolves operation, offset by a decrease in sales and marketing costs in our professional sales services and equipment segments.
For the year ended December 31, 2015, the Company had net income of $3.8 million, or $0.02 per common share, compared with a net income of $1.1 million, or $0.01 per common share, for the year ended December 31, 2014.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, and share-based compensation) increased by $3.9 million, or 205%, to $5.8 million in the year ended December 31, 2015 from $1.9 million in the year ended December 31, 2014, primarily as a result of higher fixed asset depreciation in the IT segment, higher amortization of intangibles associated with the acquisition activities, as well as higher software amortization in the professional sales service segment, minimally offset by lower share-based compensation expense.
Net cash provided by operating activities was $6.5 million and $2.6 million for the year ended December 31, 2015 and 2014, respectively. Net cash decreased by $6.9 million to $2.2 million at December 31, 2015, compared with net cash of $9.1 million at December 31, 2014. The decrease in cash is due to the cash used in the NetWolves acquisition. As of March 25, 2016, the Company's net cash was approximately $5 million.
Deferred revenue remains substantial, at approximately $18.5 million as of December 31, 2015, which will be recognized in the future when the underlying equipment or services is delivered and accepted at the customer site. Our shareholders' equity increased to $11.7 million as of December 31, 2015 from $7.8 million as of December 31, 2014.
Conference Call Information
The Company will host a conference call on Tuesday, March 29, 2016 at 10:00 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 June 29, 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: 13633491.
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 (www.netwolves.com), a managed network services provider with an extensive, proprietary service platform to a broad base of customers. Vasomedical Solutions, Inc. (www.vasosolutions.com), manages and coordinates the design, manufacture and sales of EECP® Therapy Systems and other medical equipment operations. Vasomedical Global Corp. (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 www.vasomedical.com.
Summarized Financial Information
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 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.
Investor Contacts:
Michael J. Beecher/Amanda Jiang
Investor Relations
Phone: 516-508-5840
Email: mbeecher@vasomedical.com / ajiang@vasomedical.com
SOURCE: Vasomedical, Inc.