Vaso Corporation Announces Financial Results for First Quarter 2020

Revenue Increases 11% Year-over-Year

PLAINVIEW, NY / ACCESSWIRE / June 4, 2020 / Vaso Corporation ("Vaso") (OTC PINK:VASO) today reported its operating results for the three months ended March 31, 2020.

"The Company's total revenue for the first quarter 2020 was $17.3 million, an increase of 11% when compared to the same quarter in the prior year, primarily as a result of a $1.8 million increase in revenue in our professional sales service segment," commented Dr. Jun Ma, President and Chief Executive Officer of Vaso Corporation. "Combined with a significant increase in the gross profit margin, Vaso Corporation achieved an impressive improvement of $1.4 million in operating income, reducing its quarterly operating loss by 53% year-over-year, to $1.3 million."

"On the other hand, like many others, we started to experience the negative impact of the COVID-19 pandemic toward the end of the first quarter as the shutdown became widespread. All of our businesses have been adversely affected and much uncertainty continues to remain for the rest of the year. While we regard the safety and well-being of our employees and customers a top priority, we have also been actively engaging with our customers to maintain ongoing business relationships and help each other weather the storm. With the assistance of the $3.6 million PPP loan the Company received in the second quarter under the CARES Act, we believe Vaso will continue to be financially stable despite the anticipated volatility in orders, revenue and cash receipts," concluded Dr. Ma.

Financial Results for Three Months Ended March 31, 2020

For the three months ended March 31, 2020, revenue increased 11% to $17.3 million from $15.5 million for the same period of 2019, due primarily to the increase of $1.8 million, or 51%, in revenue in our professional sales service segment as the result of higher equipment deliveries by GEHC during the quarter. Revenue in our IT segment increased less than 1%, to $11.3 million in the first quarter 2020, compared to the same quarter of 2019, while our equipment segment revenue decreased slightly to $778 thousand compared to the first quarter of 2019, principally due to lower service revenues in that segment.

Gross profit for the first quarter of 2020 increased 17% to $9.2 million, compared with a gross profit of $7.9 million for the same quarter of 2019. This increase was primarily the result of the increase in revenue in the professional sales service and an increase in profit margin in the equipment segment due to the higher margin product mix, partially offset by a decrease in gross profit in the IT segment.

Selling, general and administrative (SG&A) expenses for the first quarter of 2020 decreased 1% to $10.3 million, compared to the first quarter of 2019. The decrease is primarily attributable to a decrease in personnel costs in the IT and equipment segments, offset by an increase in SG&A costs in the professional sales service segment resulting from costs for the national sales meeting held during the quarter. (No national sales meeting was held in 2019.) SG&A expenses were 59% and 67% of revenue in the first quarter of 2020 and 2019, respectively.

Net loss for the three months ended March 31, 2020 was $1.4 million, a significant improvement over the loss of $2.8 million for the first quarter of 2019.

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

 
FOR THE THREE MONTHS ENDED
 

STATEMENTS OF OPERATIONS

 
March 31,
2020
 
 
March 31,
2019
 

 
(In thousands)
 

 
(Unaudited)
 

Revenue

 
$
17,283
 
 
$
15,524
 

Gross profit

 
 
9,195
 
 
 
7,886
 

Operating loss

 
 
(1,252
)
 
 
(2,655
)

Other income (expense), net

 
 
(234
)
 
 
(183
)

Loss before taxes

 
 
(1,486
)
 
 
(2,838
)

Income tax benefit (expense)

 
 
119
 
 
 
(11
)

Net loss

 
 
(1,367
)
 
 
(2,849
)

Income tax (benefit) expense

 
 
(119
)
 
 
11
 

Interest (income) expense, net

 
 
261
 
 
 
217
 

Depreciation and amortization

 
 
623
 
 
 
675
 

Non-cash stock-based compensation

 
 
27
 
 
 
44
 

Adjusted EBITDA*

 
$
(575
)
 
$
(1,902
)

*Adjusted EBITDA is earnings (loss) before interest, taxes, depreciation and amortization and non-cash stock-based compensation
 

BALANCE SHEETS

 
March 31, 2020
 
 
December 31, 2019
 

Total current assets

 
$
19,992
 
 
$
24,059
 

Total assets

 
$
50,330
 
 
$
54,364
 

Total current liabilities

 
$
27,110
 
 
$
31,528
 

Total stockholders' equity

 
$
4,384
 
 
$
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: mbeecher@vasocorporation.com

SOURCE: Vaso Corporation

ReleaseID: 592486