The Company Reports Significant Growth in Revenue and Profitability
PLAINVIEW, NY / March 30, 2022/ Vaso Corporation (“Vaso”) (OTC PINK:VASO) today reported its operating results for the three months and year ended December 31, 2021.
“Driven by the extraordinary fourth-quarter growth in our professional sales service segment and equipment segment, the Company’s total revenue for fiscal year 2021 reached $75.6 million, a growth of 8.2% over the prior year. Compounding it with an improvement in gross profit margin by 185 basis points, we recorded an annual operating profit of $2.8 million, an increase of 265.0% year-over-year,” commented Dr. Jun Ma, President and Chief Executive Officer of Vaso Corporation. “Such an accomplishment would not be possible without the dedication and professionalism of our employees, who must be constantly balancing their life and work while facing the tremendous uncertainties in business and daily life during the pandemic. On behalf of the board of directors and the management of the Company, I thank you.”
“The Company’s balance sheet has been further strengthened after a total debt paydown of $8.1 million in 2021. In addition, deferred revenue as of December 31, 2021 was at a historical high of $25.0 million, a $7.3 million increase over the prior 12-month period. With a healthy cash position thanks to the positive cash flow of $7.8 million generated in operating activities during the year, and in light of the pandemic’s recent tapering off, we remain optimistic about the Company’s performance going forward,” concluded Dr. Ma.
Financial Results for Three Months Ended December 31, 2021
For the three months ended December 31, 2021, revenue increased by 31.1% to $24.5 million from $18.7 million for the same period of 2020, due primarily to the increase of $5.4 million, or 75.1%, in revenue in our professional sales service segment as the result of higher deliveries of underlying equipment by our partner and a higher blended commission rate during the quarter. Revenue in our IT segment decreased 2.4%, to $10.6 million in the fourth quarter 2021, compared to the same quarter of 2020, while our equipment segment revenue increased 110.1% to $1.3 million from $0.6 million for the fourth quarter of 2020, primarily due to an increase in unit sales of our Biox products in China.
Gross profit for the fourth quarter of 2021 increased by 41.5% to $15.7 million, compared with a gross profit of $11.1 million for the same quarter of 2020. This increase was primarily the result of the increase in revenue in the professional sales service and equipment segments.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2021 increased by 14.4% to $10.9 million, compared to $9.6 million for the fourth quarter of 2020. The increase was primarily attributable to an increase in personnel and travel costs in the professional sales service segment, offset by a decrease in personnel and other costs in the IT segment. SG&A expenses were 44.7% and 51.2% of revenue in the fourth quarter of 2021 and 2020, respectively.
Net income for the three months ended December 31, 2021 was $3.3 million, compared with a net income of $1.2 million for the three months ended December 31, 2020.
Financial Results for Year Ended December 31, 2021
For the year ended December 31, 2021, revenue increased by $5.7 million or 8.2% to $75.6 million when compared with $69.9 million for the year 2020. Revenue in our IT segment decreased 2.2% to $42.9 million for the year 2021, from 2020 revenue of $43.9 million, primarily due to a decrease of revenue in the network services business. Commission revenues in our professional sales service segment increased by 28.8% to $29.4 million in the year 2021, compared to $22.9 million in 2020. The increase was the result of higher equipment deliveries by our partner and higher blended commission rates for the equipment delivered during the year. Equipment segment revenue for the year 2021 increased by 4.2% to $3.2 million, from $3.1 million in 2020, principally due to an increase in product sales in our China operations, partially offset by the sale of 51% of our EECP business in the second quarter of 2020.
Gross profit for the year ended December 31, 2021 increased 11.8% to $43.1 million, from $38.6 million in 2020, as a result of the higher revenue in our professional sales service and equipment segments.
SG&A expenses for the year ended December 31, 2021 increased $1.5 million or 4.2% to $38.6 million, or 51.1% of revenue, compared with $37.1 million, or 53.0% of revenue, for the same period in 2020. The increase resulted primarily from an increase of $2.4 million in personnel and travel costs in the professional sales service segment, partially offset by a decrease of $1.1 million in the IT segment due to lower personnel and travel costs.
For the year ended December 31, 2021, the Company had net income of $6.1 million, $5.7 million greater than the net income of $358 thousand for the year ended December 31, 2020.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, and share-based compensation) was $10.4 million for the year ended December 31, 2021 compared to Adjusted EBITDA of $3.6 million for the year ended December 31, 2020.
Net cash provided from operating activities in 2021 was $7.8 million, compared to net cash provided from operating activities of $5.9 million in 2020. The increase is principally due to the increase in profitability, offset by the increase in accounts receivable. Net cash decreased to $6.0 million at December 31, 2021, compared to $6.8 million at December 31, 2020. The decrease in cash is the net effect of positive cash from operating activities, reduced by the repayment of $8.1 million of debt. As of March 25, 2022, the Company’s net cash was approximately $11.2 million.
Deferred revenue increased to $25.0 million at December 31, 2021, compared to $17.7 million at December 31, 2020. The increase is primarily the result of high order bookings in the professional sales service segment. The deferred revenue will be recognized in the future when the underlying equipment or services are delivered and accepted at the customer site.
Summarized Financial Information
*Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation
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:
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 impact of the current COVID-19 pandemic; the effect of the dramatic changes taking place in IT and healthcare; continuation of the GEHC agreement; 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
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