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Vaso Corporation Announces Second Quarter 2017 Financial Results

 PLAINVIEW, N.Y. August 14, 2017 – Vaso Corporation (“Vaso”) (OTCMKTS: VASO) today reported its operating results for the three months ended June 30, 2017.

“In the second quarter of 2017 we recorded a total revenue of $17.9 million, of which our IT, professional sales service and equipment segments contributed 60%, 34% and 6%, respectively. Revenue decreased by $0.3 million as compared to the same period in the prior year, principally due to a decrease in revenue in the professional sales service segment as a result of a lower equipment deliveries in the quarter by our partner. Given that our order bookings in this segment remain very strong, as reflected in the significant increase in the deferred commission revenue by $3 million, or 18%, from a year ago, we anticipate higher equipment deliveries, thus higher revenues, in this segment in the future quarters,” stated Dr. Jun Ma, President and Chief Executive Officer of Vaso Corporation. “Revenue in our IT segment increased 7% but the real growth in our healthcare IT VAR business is still yet to manifest in the financial statements, as order backlog in the VAR operations was almost double from a year ago, which will turn into revenue once the underlying products and services are delivered.”

“Therefore, we expect to deliver another profitable year in 2017 and maintain a strong financial position as we continue to generate positive cash flow from operating activities,” concluded Dr. Ma.

Financial Results for Three Months Ended June 30, 2017

For the three months ended June 30, 2017, revenue decreased 2% to $17.9 million from $18.2 million for the same period of 2016, due to the decrease of $0.9 million in commission revenue in our professional sales service segment as a result of lower equipment deliveries by our partner, as well as lower equipment sales in our equipment segment, partially offset by an increase of $0.7 million, or 7%, in revenue in our IT segment.

Gross profit for the second quarter of 2017 decreased 3% to $9.8 million, compared with a gross profit of $10.1 million for the second quarter of 2016. This decrease is primarily the result of the decrease in revenue in the professional sales service segment resulting in a decrease in segment gross profit of $0.6 million as well as a decrease in gross profit in the equipment segment, partially offset by an increase of $0.4 million in gross profit in the IT segment.

Selling, general and administrative (SG&A) expenses for the second quarter of 2017 increased 5% to $10.2 million compared to $9.7 million for the second quarter of 2016. The increase is primarily attributable to an increase in personnel costs in the professional sales service and IT segments.

Research and development costs increased 148% to $260 thousand in the second quarter of 2017 compared to the same quarter of 2016, due to an increase in software and product development costs.

Net loss for the three months ended June 30, 2017 was $1.0 million, compared with a net income of $0.2 million for the three months ended June 30, 2016.

Net cash provided by operating activities was $1.4 million and $3.7 million for the six months ended June 30, 2017 and 2016, respectively. Net cash at June 30, 2017 was $6.5 million, compared to $7.1 million at December 31, 2016.

Deferred revenue remains substantial, at approximately $20.7 million as of June 30, 2017, up by $1.3 million from $19.4 million as of December 31, 2016, 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 $10.2 million as of June 30, 2017 from $12.9 million as of December 31, 2016.

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 four wholly owned subsidiaries. Vaso Technology, Inc. provides network and IT services through two business units: VasoHealthcare IT Corp., a national value added reseller of GE Healthcare IT’s Radiology PACS (Picture Archiving and Communication System) software solutions and 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. VasoHealthcareprovides 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 Solutions, Inc., manages and coordinates the design, manufacture and sales of EECP® Therapy Systems and other medical equipment operations. Vasomedical Global Corp operates the Company’s overseas assets including China-based subsidiaries (Biox Instruments Co. Ltd. and Life Enhancement Technology Limited) as well as the minority interest in VSK Medical Limited, a marketing and sales company for ECP products in the international market. Additional information is available on the Company’s website at 

Summarized Financial Information

STATEMENTS OF OPERATIONS June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016
(In thousands)
Revenue $17,853 $18,214 $34,227 $35,756
Gross profit 9,798 10,113 18,868 20,125
Operating (loss) income (709) 264 (2,550) 423
Other (expense) income, net (167) (102) (348) (263)
(Loss) income before taxes (876) 162 (2,898) 160
Income tax (expense) benefit (111) 51 (220) (51)
Net (loss) income $(987) $213 $(3,118) $109
Income tax expense (benefit) 111 (51) 220 51
Interest expense (income), net 166 154 331 311
Depreciation and amortization 588 536 1,170 1,059
Non-cash stock-based compensation 98 34 317 67
Adjusted EBITDA* $(24) $886 $(1,080) $1,597
*Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation
BALANCE SHEETS June 30, 2017 December 31, 2016
(In thousands)
Total current assets $21,667 $25,083
Total assets $53,349 $57,381
Total current liabilities $26,720 $25,650
Total stockholders’ equity $10,199 $12,911


Except for historical information contained in this report, 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”, “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.

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

Investor Contacts:
Michael J. Beecher
Investor Relations
Phone: 516-508-5840

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

SOURCE: Vaso Corporation

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