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.

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

SOURCE: Vaso Corporation

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