Vaso Corporation Announces Third Quarter 2016 Financial Results

[ACCESSWIRE]

Quarterly Revenue Increased to $17.5 Million

PLAINVIEW, NY / ACCESSWIRE / November 14, 2016 / Vaso Corporation (OTC PK: VASO) (formerly Vasomedical, Inc.) today reported its operating results for the three months ended September 30, 2016.

"We are pleased to report that the Company achieved continued revenue growth to $17.5 million for the third quarter of 2016, thanks to the double digit year-over-year growth rate in both our IT segment and proprietary medical device segment. We experienced a revenue decline in the professional sales service segment during the quarter but anticipate an improvement in the fourth quarter," commented Dr. Jun Ma, President and Chief Executive Officer of Vaso. "The Company maintained profitability for the three and nine months ended September 30, 2016, and for the nine-month period adjusted EBITDA grew 22% year-over-year. Given that, historically, our fourth quarter is the most profitable quarter in the year, we look forward to the third consecutive year of profitability in 2016."

"The continued revenue growth in spite of a decrease in the professional sales service segment, due to lower delivery volume by our partner as well as a lower blended commission rate on delivered equipment, is precisely what our diversification strategy is designed to ensure. Going forward, our overall business will be more robust than ever against fluctuations in a particular industry segment or geographic region, providing better stability to the future development of the Company as well as a solid foundation for future growth," concluded Dr. Ma.

Three Months Ended September 30, 2016 Financial Results

For the three months ended September 30, 2016, revenue increased to $17.5 million from $17.4 million for the same period of 2015. The increase, when compared to the same period in 2015, was a result of a $0.9 million or 10% growth in our IT segment revenue and a $0.3 million or 26% growth in equipment segment revenue, offset by a decrease of $1.0 million (13%) of revenue in our professional sales services segment, primarily due to lower average commission rates and lower equipment deliveries by GEHC compared to the third quarter 2015. The increase in our IT segment revenue is attributable to increases in revenue in both our NetWolves and our IT VAR operations. The increase in equipment segment revenue was due to an increase in the volume of equipment deliveries.

Gross profit for the third quarter of 2016 increased 3% to $10.2 million, compared with $9.9 million for the third quarter of 2015. The increase was principally due to the increase in revenue in the IT and equipment segments offset by lower gross profit in the professional sales services segment as a result of the lower revenue in that segment. Total gross profit margin was 58% of revenue for the three months ended September 30, 2016, and 57% for the same period in 2015.

Selling, general and administrative (SG&A) expenses for the third quarter of 2016 increased to $9.5 million from $8.4 million for the third quarter last year. The increase is primarily due to an increase in personnel and marketing costs in the professional sales service segment and an increase in staff in the IT segment, offset by lower costs in the equipment segment as a result of reductions in sales and marketing costs in that segment.

Operating income for the third quarter 2016 was $502 thousand, a 62% decrease, compared to $1.3 million for the same period in 2015. The decrease was principally due to the lower revenue in the professional sales service segment and the increase in SG&A costs as discussed above. Net income for the three months ended September 30, 2016 was $328 thousand, compared with net income of $1.2 million for the three months ended September 30, 2015. We anticipate an improvement in operating and net income in the fourth quarter as we expect an increase in equipment deliveries by GEHC and improvements in our IT segment.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation) was $1.4 million for the three months ended September 30, 2016, compared to $1.8 million for the same period a year ago.

Net cash generated from operating activities in the first nine months of 2016 was $3.8 million. As of September 30, 2016, the Company had cash and cash equivalents of approximately $5.7 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, November 14, 2016 at 1:00 p.m. ET featuring remarks by Jun Ma, Ph.D., President and CEO, Peter Castle, Chief Operating Officer, and Michael Beecher, Chief Financial Officer of Vaso. 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 Vaso's website, at http://www.vasocorporation.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.vasocorporation.com/. To access the dial-in replay of the call, which will be available until December 14, 2016, please dial 1-877-481-4010 or 1-919-882-2331. All dial-in participants must use the following code to access the call: 10142.

About Vaso Corporation

Vaso Corporation is a diversified medical technology company with three 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 the design, manufacture and sale of proprietary medical devices.

The Company operates through three 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 healthcare 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, Inc. (www.vasomedical.com), manages and coordinates the design, manufacture, sales and services of proprietary medical devices including EECP® Therapy Systems, Biox® series ambulatory monitoring systems and ARCS® series analysis and reporting software. The Company also owns overseas operations including China-based Biox Instruments Co. Ltd. and Life Enhancement Technology Limited, and is 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.vasocorporation.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", "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.

Vaso Corporation
137 Commercial Street
Plainview, New York 11803
Tel: (516) 997-4600 Fax: (516) 997-2299

Investor Contacts:
Michael J. Beecher
Investor Relations
Phone: 516-508-5840
Email: [email protected]; [email protected]

SOURCE: Vaso Corporation