High deferred revenue and backlog setting stage for 2024 revenue and income growth
PLAINVIEW, N.Y., Aug. 14, 2024 (GLOBE NEWSWIRE) -- Vaso Corporation ("Vaso") (OTCQX: VASO) today reported its operating results for the three months ended June 30, 2024.
"The Company recorded a total revenue of $20.2 million for the second quarter of 2024, in line with revenue of $20.3 million for the second quarter of 2023," commented Dr. Jun Ma, President and Chief Executive Officer of Vaso Corporation. "Deferred revenue in our professional sales service segment remains substantial, at $31.7 million as of June 30, 2024, and backlog in our IT segment reached a multi-year high of $39.4 million at the end of the second quarter, setting a good foundation for revenue and income growth in future quarters."
"As stated before, we are a seasonal business in that a substantial amount of our revenue and income is usually generated in the last six months of any year. We are optimistic about the Company's performance for the remainder of the year, as both top- and bottom-line numbers are tracking ahead of our 2024 goals year-to-date. We also continue to generate positive cashflow from operating activities, in the amount of $2.8 million during the second quarter of 2024. The Company had $25.7 million in cash and cash equivalents as of June 30, 2024, despite significantly increased expenses in the last several months for investment banking activities related to our efforts to list our common stock on NASDAQ through our previously announced proposed business combination with Achari Ventures Holdings Corp. I," Dr. Ma continued.
"With regard to listing on NASDAQ, we anticipate it will afford the Company the opportunity of broadening its stockholder base as institutional investors have a very limited interest in OTC stocks. We also believe that, based on the historical performance and financial fundamentals of the Company, our common stock is undervalued as it is subject to trading restrictions under the penny stock rules which impose certain sales practice requirements on broker-dealers in transactions involving our stock. In addition, listing on NASDAQ should assist the Company in its goal of expanding operations through internal growth, new partnerships, and strategic investments with a concentration on medical and IT service companies," concluded Dr. Ma. "A special stockholders meeting has been scheduled for August 26, 2024 in New York City to seek stockholders' approval of the business combination, and I look forward to seeing you then."
Financial Results for Three Months Ended June 30, 2024
For the three months ended June 30, 2024, total revenue decreased slightly to $20.2 million from $20.3 million for the same period of 2023. Revenue in our IT segment increased by $156 thousand or 1% when compared to the second quarter of 2023, mostly because of growth in the network services business. Revenue in the professional sales service segment decreased by $30 thousand, relatively flat compared to the second quarter of 2023, due primarily to lower deliveries of diagnostic imaging equipment, mostly offset by an increase in sales of ultrasound systems. Revenue in the equipment segment decreased by $223 thousand or 30% when compared to the same quarter of last year, due to lower sales of ARCS® cloud software subscription in the US and lower equipment deliveries in our China operations.
Gross profit for the second quarter of 2024 was $12.2 million, compared to $12.7 million for the same quarter of 2023, representing a decrease of 4% year over year. This decrease was the combined result of the decrease in revenue and lower gross margin.
Selling, general and administrative (SG&A) expenses for the second quarter of 2024 increased 2% to $10.8 million, when compared to the second quarter of 2023. The increase is primarily attributable to additional headcount for the new ultrasound sales program in the professional sales segment and an increase in personnel costs in the IT segment, partially offset by lower board fees. Total operating expenses increased 3% to $11.2 million due mainly to higher SG&A and business combination transaction costs.
Net income for the three months ended June 30, 2024 was $1.2 million, compared to net income of $2.0 million in the second quarter 2023. The lower income is due to the lower gross profit and higher expenses.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation) was $1.2 million for the three months ended June 30, 2024, compared to $2.1 million for the same period a year ago.
Net cash provided by operating activities in the first six months of 2024 was $1.7 million, compared to cash provided by operations of $6.0 million for the same period in 2023. As of June 30, 2024 and December 31, 2023, the Company had cash, cash equivalents and short-term investments of approximately $25.7 million and $25.3 million, respectively.
About Vaso
Vaso Corporation is a diversified medical technology company operating in three business segments:
- IT Segment provides network and IT services through two operating units: NetWolves Network Services, a managed network services provider with an extensive, proprietary service platform to a broad base of customers; and VHC-IT, a service provider for healthcare application solutions from various vendors as well as related services, including implementation, management and support.
- Professional Sales Service Segment provides sales service of capital medical equipment through a wholly owned subsidiary VasoHealthcare, currently serving as the exclusive sales representative of GE HealthCare diagnostic imaging and ultrasound products and services in certain market segments in the USA.
- Equipment Segment 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
| FOR THE THREE MONTHS ENDED | FOR THE SIX MONTHS ENDED | ||||||||||||||
| STATEMENTS OF OPERATIONS | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||
| (In thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Revenue | $ | 20,226 | $ | 20,323 | $ | 38,963 | $ | 39,359 | |||||||
| Gross profit | 12,151 | 12,696 | 23,068 | 24,258 | |||||||||||
| Operating income (loss) | 996 | 1,817 | (473 | ) | 2,079 | ||||||||||
| Other (expense) income, net | 271 | 173 | 579 | 227 | |||||||||||
| Income (loss) before taxes | 1,267 | 1,990 | 106 | 2,306 | |||||||||||
| Income tax expense | (112 | ) | (9 | ) | (124 | ) | (19 | ) | |||||||
| Net income (loss) | $ | 1,155 | $ | 1,981 | $ | (18 | ) | $ | 2,287 | ||||||
| Income tax expense | 112 | 9 | 124 | 19 | |||||||||||
| Interest expense (income), net | (301 | ) | (181 | ) | (600 | ) | (292 | ) | |||||||
| Depreciation and amortization | 226 | 264 | 411 | 537 | |||||||||||
| Non-cash stock-based compensation | 9 | 15 | 18 | 28 | |||||||||||
| Adjusted EBITDA* | $ | 1,201 | $ | 2,088 | $ | (65 | ) | $ | 2,579 | ||||||
*Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation
| BALANCE SHEETS | June 30, 2024 | December 31, 2023 | |||
| (In thousands) | |||||
| (Unaudited) | |||||
| Total current assets | $ | 40,889 | $ | 45,099 | |
| Total assets | $ | 72,063 | $ | 75,757 | |
| Total current liabilities | $ | 26,836 | $ | 30,040 | |
| Total stockholders' equity | $ | 26,721 | $ | 26,843 | |
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", "looking forward", 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 possibility of a downturn in the US economy and the continued impact of the 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; 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
