PLAINVIEW, N.Y. May 15, 2018 – Vaso Corporation (“Vaso”) (OTCMKTS: VASO) today reported its operating results for the three months ended March 31, 2018.
“The Company’s revenue increased by $1.2 million, or 7%, in the first quarter of 2018 when compared to the same quarter of the prior year, led by a 16% year-over-year quarterly revenue growth in the information technology, or IT, segment, continuing the upward trend in this segment,” stated Dr. Jun Ma, President and Chief Executive Officer of Vaso Corporation. “Our equipment segment also contributed to the improvement in total revenue and gross profit, but we continued to experience slow equipment delivery by our partner in the professional sales services segment. This has resulted in a decrease in commission revenue for the quarter in the segment since we only recognize revenue upon delivery and acceptance of the underlying equipment. Therefore, at the end of the first quarter, deferred revenue in the segment increased 8% from a year ago to $20.3 million, of which $15.2 million was short-term, as compared to $9.1 million a year ago, a strong indication that equipment deliveries will be accelerated in the following quarters.”
“As we expect continued growth and improved performance in our IT and equipment segments, and anticipate higher equipment delivery volume in the professional sales service segment, we remain optimistic about the Company’s future profitability and financial position,” concluded Dr. Ma.
Financial Results for Three Months Ended March 31, 2018
For the three months ended March 31, 2018, revenue grew by 7% to $17.5 million from $16.4 million from the same period of 2017, resulting from an increase of $1.6 million in our IT segment revenue and an increase of $0.2 million in our equipment segment revenue, offset by a decrease of $0.7 million in our professional sales service segment due to a decrease in delivery of underlying equipment by our partner. We expect that deliveries will improve over the remainder of 2018.
Gross profit for the first quarter of 2018 increased 6% to $9.6 million, compared with a gross profit of $9.1 million for the first quarter of 2017. This increase is primarily the result of the increase in revenue in the IT and equipment segments, partially offset by a decrease in gross profit in the professional sales services segment.
Selling, general and administrative (SG&A) expenses for the first quarter of 2018 increased 8% to $11.5 million compared to $10.7 million for the first quarter of 2017. The increase is primarily attributable to an increase in personnel costs in the professional sales service and IT segments.
Research and development costs decreased 15% to $187 thousand in the first quarter of 2018 compared to the first quarter of 2017, due to a decrease in software development costs.
Net loss for the three months ended March 31, 2018 was $2.1 million, representing a year-over-year improvement of $62 thousand.
Net cash use in operating activities was $0.5 million in the first quarter of 2018 compared to net cash provided by operations of $0.7 million for the three months ended March 31, 2017. Cash and cash equivalents at March 31, 2018 was $5.8 million, compared to $5.2 million at December 31, 2017.
Total deferred revenue remains substantial, at approximately $21.3 million as of March 31, 2018, which will be recognized in the future when the underlying equipment or services are delivered and accepted at the customer site. Our shareholders’ equity decreased to $7.5 million as of March 31, 2018 from $9.2 million as of December 31, 2017.
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:
Additional information is available on the Company’s website at www.vasocorporation.com.
Summarized Financial Information
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; 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.
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