WESTBURY, N.Y.--(BUSINESS WIRE)--Vasomedical, Inc. (“Vasomedical”) (OTC: VASO.PK), a leader in the manufacture and sale of devices for the non-invasive treatment and management of cardiovascular diseases and a leader in the sale of diagnostic imaging products, today reported financial results for the quarter ended November 30, 2011. These results include the operations of its wholly-owned subsidiaries, Vaso Diagnostics, Inc., d/b/a VasoHealthcare, our sales representative subsidiary which represents GE Healthcare (“GEHC”) for the sale of select diagnostic imaging products on an exclusive basis to specific market segments in the 48 contiguous states of the United States and Washington, DC, and the recently acquired Chinese companies.
The Company recorded revenue of $9.95 million and $14.28 million for the three and six month periods ended November 30, 2011, respectively, compared to revenue of $3.80 million and $5.08 million for same periods a year ago, an increase of 161.9% and 181.3% for the three and six month periods, respectively . The increase is primarily due to an increase in commission revenue at VasoHealthcare, as the agreement with GE Healthcare, which began mid-year 2010, was in full operation in 2011 and the Company earned higher commission rates in 2011 as a result of achieving certain performance targets. Due to the nature of our commission structure under the agreement with GEHC, we earn progressively higher commission rates as calendar year targets are met. As we achieve these targets the higher commission rates are retroactive to the beginning of the calendar year, and therefore we anticipate earning and recognizing greater revenue in the fourth quarter of the calendar year. We continue to record substantial amounts of deferred revenues, which will be recognized once the underlying equipment or service is accepted or performed. As of November 30, 2011, total deferred revenues were approximately $14.7 million, an increase of $2.6 million and $2.8 million from August 31, 2011 and May 31, 2011, respectively.
Net income for the quarter and six months ended November 30, 2011 was $2.47 million and $816,000, respectively, compared to a net loss of $1.13 million and $3.70 million for the same periods in the prior year. The significant change from net loss to net income is attributable to the increase in commission revenue, as discussed above, offset by the related increase in commission expense. Income attributable to common stockholders was $1.33 million or $0.01 per common share for the three months ended November 30, 2011, compared to a net loss of $1.26 million or ($0.01) per common share for the three months ended November 30, 2010. The significant change from net loss to net income is attributable to the increase in commission revenue, as discussed above, offset by the related increase in commission expense. For the six months ended November 30, 2011 net loss attributable to common stockholders was $406,000 or $0.0 per share compared to a net loss applicable to common stockholders of $3.85 million or ($0.03) per share for the same period in the prior year. The net loss applicable to common stockholders is after reduction for preferred stock dividends of $1.14 million and $125,000 for the three months ended November 30, 2011 and 2010, respectively, and $1.22 million and $152,000 for the six months ended November 30, 2011 and 2010, respectively. These preferred stock dividends are noncash items resulting principally from the value of the imbedded beneficial conversion feature in the preferred stock.
“We are very excited by achieving significant record profitability during this reporting period and are gratified with the significant revenue growth from our VasoHealthcare operations,” commented Dr. Jun Ma, Chief Executive Officer and President of Vasomedical. “This result, combined with our recent acquisition of Life Enhancement Technology Ltd. and BIOX Instruments Co. Ltd., gives us a stronger position in the marketplace, enhanced product offerings and positions us to achieve our global vision while enhancing our growth potential,” said Dr. Ma.
About Vasomedical
Vasomedical, Inc. is primarily engaged in designing, manufacturing, marketing and supporting EECP® external counterpulsation systems based on the Company's proprietary technology. EECP® therapy is a non-invasive, outpatient therapy for the treatment of cardiovascular diseases and is currently indicated for use in cases of angina, cardiogenic shock, acute myocardial infarction and congestive heart failure. The Company provides hospitals, clinics and private practices with EECP® equipment, treatment guidance and a staff training and maintenance program designed to provide optimal patient outcomes. The Company also provides other noninvasive medical equipment including Holter monitors and ambulatory blood pressure monitors.
Vaso Diagnostics d/b/a VasoHealthcare, a wholly owned subsidiary of Vasomedical, Inc., is a professional sales representation organization offering vendors of medical devices an alternative third party sales channel. Through an agreement with GE Healthcare, it is currently engaged as an exclusive sales representative for certain GE Healthcare products. Additional information is available on the Company's website at www.vasomedical.com.
Summarized Financial Information
| FOR THE THREE MONTHS ENDED | FOR THE SIX MONTHS ENDED | |||||||||||||||
| STATEMENT OF OPERATIONS | November 30, 2011 | November 30, 2010 | November 30, 2011 | November 30, 2010 | ||||||||||||
| Revenue from operations | $ | 9,953,000 | $ | 3,801,000 | $ | 14,282,000 | $ | 5,077,000 | ||||||||
| Gross profit | $ | 7,392,000 | $ | 2,362,000 | $ | 10,219,000 | $ | 3,000,000 | ||||||||
| Operating income (loss) | $ | 2,463,000 | $ | (1,153,000 | ) | $ | 779,000 | $ | (3,730,000 | ) | ||||||
| Other income, net | $ | 30,000 | $ | 23,000 | $ | 63,000 | $ | 36,000 | ||||||||
| Income (loss) before income taxes | $ | 2,493,000 | $ | (1,130,000 | ) | $ | 842,000 | $ | (3,694,000 | ) | ||||||
| Provision for income taxes | $ | (24,000 | ) | $ | (1,000 | ) | $ | (26,000 | ) | $ | (7,000 | ) | ||||
| Net income (loss) | $ | 2,469,000 | $ | (1,131,000 | ) | $ | 816,000 | $ | (3,701,000 | ) | ||||||
| Preferred stock dividends | $ | (1,136,000 | ) | $ | (125,000 | ) | $ | (1,222,000 | ) | $ | (152,000 | ) | ||||
| Net income (loss) attributable to common stockholders | $ | 1,333,000 | $ | (1,256,000 | ) | $ | (406,000 | ) | $ | (3,853,000 | ) | |||||
| Basic and diluted income (loss) per share | $ | 0.01 | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.03 | ) | |||||
| BALANCE SHEET | November 30, 2011 | May 31, 2011 | ||||
| Total Current Assets | $ | 22,989,000 | $ | 17,372,000 | ||
| Total Assets | $ | 27,078,000 | $ | 18,555,000 | ||
| Total Current Liabilities | $ | 17,680,000 | $ | 14,536,000 | ||
| Total Stockholders Equity | $ | 6,945,000 | $ | 2,908,000 | ||
Except for historical information contained in this release, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this release, 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 the healthcare environment; the impact of competitive procedures 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; uncertainties about the acceptance of a novel therapeutic modality by the medical community; continuation of the GEHC agreement; 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.
