The Company Reports Improved Profitability Despite Pandemic
PLAINVIEW, NY / ACCESSWIRE / May 4, 2021 / Vaso Corporation ("Vaso") (OTC PINK:VASO) today reported its operating results for the three months and year ended December 31, 2020.
"The Company was able to conclude a profitable year in 2020 as it experienced an unprecedented impact of the economic shutdown due to the pandemic," commented Dr. Jun Ma, President and CEO of the Company. "Specifically, net income for fiscal year 2020 was $358 thousand, compared to a net loss of $382 thousand in the prior year, although revenue for the year decreased by $5.7 million to $69.9 million."
"The much-improved profitability was primarily the result of significant cost reductions. Selling, general and administrative costs went down by $4.0 million, or 9.7%, in 2020 when compared to 2019," Dr. Ma continued. "In addition, the Company generated $5.9 million from operating activities in the year 2020 and its cash position remains strong."
"As the country starts to get back to normalcy, we'll continue to exercise our diligence in executing our strategy and look to further improve performance of all our business units," concluded Dr. Ma.
The following financial results for the three and twelve months ended December 31, 2019 have been revised for the correction of errors.
Financial Results for Three Months Ended December 31, 2020
For the three months ended December 31, 2020, revenue decreased by 21.2% to $18.7 million from $23.7 million for the same period of 2019, due primarily to the decrease of $4.1 million, or 36.6%, in revenue in our professional sales service segment as the result of lower deliveries by our partner of underlying equipment during the quarter. Revenue in our IT segment decreased 3.4%, to $10.9 million in the fourth quarter 2020, compared to the same quarter of 2019, while our equipment segment revenue decreased 44.5% to $614 thousand from $1.1 million for the fourth quarter of 2019, due to the deconsolidation of EECP business as the result of the sale of equity in the EECP business early in the year, offset by an increase in sales in our Biox products.
Gross profit for the fourth quarter of 2020 decreased by 22.5% to $11.1 million, compared with a gross profit of $14.3 million for the same quarter of 2019. This decrease was primarily the result of the decrease in revenue in the professional sales service and IT segments.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2020 decreased by 14.1% to $9.6 million, compared to $11.1 million for the fourth quarter of 2019. The decrease was primarily attributable to a decrease in personnel costs in the IT segment and other cost reductions. SG&A expenses were 51.2% and 47.0% of revenue in the fourth quarter of 2020 and 2019, respectively.
Net income for the three months ended December 31, 2020 was $1.2 million, compared with a net income of $2.7 million for the three months ended December 31, 2019.
Financial Results for Year Ended December 31, 2020
For the year ended December 31, 2020, revenue decreased by $5.7 million or 7.5% to $69.9 million when compared with $75.5 million for the year 2019. Revenue in our IT segment decreased 3.5% to $43.9 million for the year 2020, from 2019 revenue of $45.5 million, primarily due to a decrease of revenue in the healthcare IT business. Commission revenues in our professional sales service segment decreased by 12.8% to $22.9 million in the year 2020, compared to $26.2 million in 2019. The decrease was the result of lower equipment deliveries by our partner and lower blended commission rates for the equipment delivered during the year. Equipment segment revenue for the year 2020 decreased by 18.7% to $3.1 million, from $3.8 million in 2019, principally due to the sale of 51% of our EECP business early in the year, partially offset by an increase in sales in our China operations. Revenues in the IT and professional sales service segments were negatively impacted by the COVID-19 pandemic.
Gross profit for the year ended December 31, 2020 decreased 9.1% to $38.6 million, from $42.4 million in 2019, as a result of the lower sales in our IT and professional sales service segments.
SG&A expenses for the year ended December 31, 2020 decreased $4.0 million or 9.7% to $37.1 million, or 53.0% of revenue, compared with $41.0 million, or 54.3% of revenue, for the same period in 2019. The decrease resulted primarily from a decrease $3.1 million in personnel and travel costs in the professional sales service and IT segments, as well as a decrease in corporate expenses.
For the year ended December 31, 2020, the Company had net income of $358 thousand, compared with a net loss of $382 thousand for the year ended December 31, 2019.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, and share-based compensation) was $3.6 million for the year ended December 31, 2020 compared to Adjusted EBITDA of $3.5 million for the year ended December 31, 2019.
Net cash provided from operating activities in 2020 was $5.9 million, compared to net cash used in operating activities of $1.3 million in 2019. The increase is principally due to the increase in profitability and the decrease in accounts receivable. Net cash increased to $6.8 million at December 31, 2020, compared to $2.1 million at December 31, 2019. The increase in cash is the net effect of positive cash from operating activities, and proceeds of $3.6 million from a PPP loan, offset by the repayment of $1.2 million of the MedTech note and $1.4 million on our lines of credit. As of April 23, 2020, the Company's net cash was approximately $9.5 million.
Deferred revenue decreased to $17.7 million at December 31, 2020, compared to $19.3 million at December 31, 2019. The decrease is primarily the result of lower 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.
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 various 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 proprietary medical equipment and software, 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
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FOR THE THREE MONTHS ENDED | FOR THE YEAR ENDED | ||||||||||||||
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STATEMENTS OF OPERATIONS
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December 31, 2020 | December 31, 2019* | December 31, 2020 | December 31, 2019* | ||||||||||||
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(In thousands) | |||||||||||||||
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(Unaudited) | |||||||||||||||
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Revenue
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$ | 18,691 | $ | 23,721 | $ | 69,850 | $ | 75,515 | ||||||||
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Gross profit
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11,076 | 14,293 | 38,571 | 42,432 | ||||||||||||
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Operating income
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1,302 | 2,960 | 772 | 591 | ||||||||||||
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Other income (expense), net
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(30 | ) | (243 | ) | (415 | ) | (862 | ) | ||||||||
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Income (loss) before taxes
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1,272 | 2,717 | 357 | (271 | ) | |||||||||||
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Income tax benefit (expense)
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(96 | ) | (62 | ) | 1 | (111 | ) | |||||||||
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Net income (loss)
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1,176 | 2,655 | 358 | (382 | ) | |||||||||||
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Income tax (benefit) expense
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96 | 62 | (1 | ) | 111 | |||||||||||
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Interest (income) expense, net
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129 | 251 | 675 | 962 | ||||||||||||
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Depreciation and amortization
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601 | 657 | 2,462 | 2,681 | ||||||||||||
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Non-cash stock-based compensation
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19 | 18 | 88 | 141 | ||||||||||||
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Adjusted EBITDA**
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$ | 2,021 | $ | 3,643 | $ | 3,582 | $ | 3,513 | ||||||||
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BALANCE SHEETS
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December 31, 2020 | December 31, 2019* | ||||||
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(In thousands) | |||||||
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Total current assets
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$ | 22,268 | $ | 24,059 | ||||
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Total assets
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$ | 50,376 | $ | 54,364 | ||||
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Total current liabilities
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$ | 31,699 | $ | 33,003 | ||||
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Total stockholders' equity
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$ | 5,085 | $ | 4,314 | ||||
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* restated
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**Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation
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: 516-997-4600
Email: mbeecher@vasocorporation.com
SOURCE: Vaso Corporation
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