Net Loss Narrowed Year-over-Year Despite Revenue Drop due to Pandemic
PLAINVIEW, NY / ACCESSWIRE / August 14, 2020 / Vaso Corporation ("Vaso") (OTC PINK:VASO) today reported its operating results for the three months ended June 30, 2020.
"The COVID-19 pandemic continues its unprecedented impact on the nation's economy and people's lives, and all of our businesses have been adversely affected as well. During the second quarter of 2020, the Company experienced a drop in its total revenue, by 7% year-over-year, although we still recorded a higher revenue year-to-date," commented Dr. Jun Ma, President and Chief Executive Officer of Vaso Corporation. "At the same time, however, quarterly operating expenses were reduced by 10% from a year ago; as a result, operating loss for the quarter only increased slightly when compared to the same quarter last year. For the first half of the year, we maintained a significant improvement in the operating results over the same period of the prior year."
"Since the beginning of the COVID-19 pandemic and the shutdown in most parts of the country, we have taken steps to protect the safety of our employees and have reached out to many of our customers and suppliers to jointly assess and mitigate risks. As uncertainties in our markets are expected to continue for an extended period of time, we are exercising extra caution in managing business expenses to stay financially stable and be ready for the reopening of the economy," concluded Dr. Ma.
Financial Results for Three Months Ended June 30, 2020
For the three months ended June 30, 2020, revenue decreased 7% to $16.3 million from $17.5 million for the same period of 2019, as all three business segments were impacted by the COVID-19 pandemic. When compared to the second quarter of 2019, revenue in the IT segment decreased $0.6 million or 5%; revenue in our professional sales service segment decreased $0.4 million or 8%; and revenue in the equipment segment decreased $0.2 million or 21%. The decreases were due to lower deliveries of equipment and lower service revenues, all primarily caused by the pandemic and the economic shutdown.
Gross profit for the second quarter of 2020 decreased 11% to $8.4 million, compared with a gross profit of $9.4 million for the same quarter of 2019. This decrease was primarily the result of the decrease in revenue as discussed above.
Selling, general and administrative (SG&A) expenses for the second quarter of 2020 decreased 10% to $9.0 million, compared to the first quarter of 2020. The decrease is primarily attributable to personnel cost reductions in the IT segment and decreases in travel and other operating costs as a result of the shutdown, as well as a decrease in operating costs of the EECP operation.
Other income and expense, net, improved by $149 thousand in the second quarter 2020 compared to the second quarter 2019, due primarily to a gain on the sale of 51% of the EECP business and to a decrease in interest costs resulting from the reduction of debt.
Net loss for the three months ended June 30, 2020 was $0.6 million, an improvement of $153 thousand or 20% over the loss of $0.7 million for the second quarter of 2019.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation) was $221 thousand for the three months ended June 30, 2020, compared to $228 thousand for the same period a year ago.
Net cash provided by operating activities in the first six months of 2020 was $4.0 million, a significant improvement when compared to net cash used in operations of $2.4 million for the same period in 2019. As of June 30, 2020 and December 31, 2019, the Company had cash and cash equivalents of approximately $6.9 million and $2.1 million, respectively.
About Vaso
Vaso Corporation is a diversified medical technology company with several distinctive but related specialties: managed IT systems and services, including healthcare software solutions and network connectivity services; professional sales services for diagnostic imaging products; and design, manufacture and sale of proprietary medical devices.
The Company operates through three wholly owned subsidiaries:
- VasoTechnology, Inc. provides network and IT services through two business units: VasoHealthcare IT Corp., a national value added reseller of Radiology Information System ("RIS"), Picture Archiving and Communication System ("PACS"), and other software solutions from GEHC Digital and other vendors as well as related services, including implementation, management and support; and NetWolves Network Services LLC, a managed network services provider with an extensive, proprietary service platform to a broad base of customers.
- Vaso Diagnostics, Inc. d.b.a. VasoHealthcare, 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.
- VasoMedical, Inc. manages and coordinates the design, manufacture and sales of EECP® Therapy Systems and other medical equipment operations, as well as operates the Company's overseas assets including China-based subsidiaries.
Additional information is available on the Company's website at www.vasocorporation.com.
Summarized Financial Information
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FOR THE THREE MONTHS ENDED | FOR THE SIX MONTHS ENDED | ||||||||||||||
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STATEMENTS OF OPERATIONS
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June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | ||||||||||||
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(In thousands) | |||||||||||||||
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Revenue
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$ | 16,340 | $ | 17,543 | $ | 33,625 | $ | 33,067 | ||||||||
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Gross profit
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8,420 | 9,411 | 17,616 | 17,298 | ||||||||||||
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Operating loss
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(532 | ) | (520 | ) | (1,784 | ) | (3,174 | ) | ||||||||
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Other (expense) income, net
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(54 | ) | (203 | ) | (288 | ) | (387 | ) | ||||||||
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Loss before taxes
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(586 | ) | (723 | ) | (2,072 | ) | (3,561 | ) | ||||||||
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Income tax benefit (expense)
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(11 | ) | (27 | ) | 108 | (38 | ) | |||||||||
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Net loss
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$ | (597 | ) | $ | (750 | ) | $ | (1,964 | ) | $ | (3,599 | ) | ||||
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Income tax expense (benefit)
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11 | 27 | (108 | ) | 38 | |||||||||||
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Interest expense (income), net
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152 | 227 | 412 | 443 | ||||||||||||
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Depreciation and amortization
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628 | 670 | 1,251 | 1,345 | ||||||||||||
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Non-cash stock-based compensation
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27 | 54 | 54 | 98 | ||||||||||||
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Adjusted EBITDA*
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$ | 221 | $ | 228 | $ | (355 | ) | $ | (1,675 | ) | ||||||
*Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation
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BALANCE SHEETS
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June 30, 2020 | December 31, 2019 | ||||||
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(In thousands) | |||||||
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Total current assets
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$ | 15,786 | $ | 24,059 | ||||
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Total assets
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$ | 45,024 | $ | 54,364 | ||||
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Total current liabilities
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$ | 29,822 | $ | 31,528 | ||||
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Total stockholders' equity
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$ | 3,987 | $ | 5,789 | ||||
Except for historical information contained in this release, 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", "optimistic", "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, including the current COVID-19 pandemic; 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 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 Contact:
Michael J. Beecher
Investor Relations
Phone: 516-508-5840
Email: [email protected]
SOURCE: Vaso Corporation