The Company Reports 5.9% Growth in Revenue and 149% Growth in Operating Income
PLAINVIEW, NY / ACCESSWIRE / March 29, 2023 / Vaso Corporation ("Vaso") (OTCQB:VASO) today announced its operating results for the three months and year ended December 31, 2022.
"Our professional sales service segment continued exceptional growth, driving the Company's total revenue for fiscal year 2022 to $80.0 million, a growth of 5.9% over the fiscal year 2021. Compounding it with an improvement in gross profit, we recorded an annual operating profit of $7.9 million, an increase of 12.4% 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 financial position continues to improve with little debt and with cash and short term investments of $20.3 million at year end. In addition, deferred revenue as of December 31, 2022 was at a historical high of $30.8 million, a $5.8 million increase over the prior 12-month period. With a healthy cash position thanks to the positive cash flow of $14.4 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, 2022
For the three months ended December 31, 2022, revenue decreased by 4.2% to $23.5 million from $24.5 million for the same period of 2021, due primarily to the decrease of $.4 million, or 3.8%, in revenue in our IT segment as the result of lower recurring services during the quarter and a decrease of $.5 million, or 39.2%, in revenue in our equipment segment due to lower equipment sales. Revenue in our professional sales service segment decreased 1.0%, to $12.4 million in the fourth quarter 2022, compared to the same quarter of 2021, due to lower incentive revenue, partially offset by higher equipment deliveries. We anticipate that revenue will improve in our IT and professional sales service segments in 2023 as we expect growth from new business in the IT segment and growth in our professional sales service segment resulting from strong order bookings in 2022.
Gross profit for the fourth quarter of 2022 decreased by 5.3% to $14.8 million, compared with a gross profit of $15.7 million for the same quarter of 2021. This decrease was primarily the result of the increase in commission expense in the professional sales service segment and lower sales in the equipment segment.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2022 increased by 2.9% to $11.3 million, compared to $10.9 million for the fourth quarter of 2021. The increase was primarily attributable to an increase in personnel and travel costs in the professional sales service segment, offset by a decrease in travel and other costs in the IT segment. SG&A expenses were 48.0% and 44.7% of revenue in the fourth quarter of 2022 and 2021, respectively.
Net income for the three months ended December 31, 2022 was $8.2 million, compared with a net income of $3.3 million for the three months ended December 31, 2021. The increase was primarily due to the recognition of a $4.8M tax benefit resulting from a reduction in the reserve for deferred tax assets.
Financial Results for Year Ended December 31, 2022
For the year ended December 31, 2022, revenue increased by $4.4 million or 5.9% to $80.0 million when compared with $75.6 million for the year 2021. Revenue in our IT segment decreased 6.6% to $40.1 million for the year 2022, from 2021 revenue of $42.9 million, primarily due to a decrease of revenue in the network services business. Commission revenues in our professional sales service segment increased $7.9 million, or 26.8%, to $37.3 million in the year 2022, compared to $29.4 million in 2021. 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 2022 decreased by 20.1% to $2.6 million, from $3.2 million in 2021, principally due to an decrease in product sales in our China operations and the effect of foreign exchange rates.
Gross profit for the year ended December 31, 2022 increased 12.4% to $48.5 million, from $43.1 million in 2021, as a result of the higher revenue in our professional sales service segment.
SG&A expenses for the year ended December 31, 2022 increased $2.3 million or 5.8% to $40.8 million, or 51.0% of revenue, compared with $38.6 million, or 51.1% of revenue, for the same period in 2021. The increase resulted primarily from an increase of $2.2 million in personnel and travel costs in the professional sales service segment.
For the year ended December 31, 2022, the Company had net income of $11.9 million, $5.8 million greater than the net income of $6.1 for the year ended December 31, 2021.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, and share-based compensation) was $9.0 million for the year ended December 31, 2022 compared to Adjusted EBITDA of $10.4 million for the year ended December 31, 2021.
Net cash provided from operating activities in 2022 was $14.4 million, compared to net cash provided from operating activities of $7.8 million in 2021. The increase is principally due to the increase in profitability. Net cash and short-term investments increased to $20.3 million at December 31, 2022, compared to $6.6 million at December 31, 2021. The increase in cash is the net effect of the increase in cash from operating activities and lower debt service payments in 2022 compared to 2021.
Deferred revenue increased to $30.8 million at December 31, 2022, compared to $25.0 million at December 31, 2021. 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.
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
| FOR THE THREE MONTHS ENDED | FOR THE YEAR ENDED | |||||||||||||||
STATEMENTS OF OPERATIONS | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||
| (In thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
Revenue | $ | 23,470 | $ | 24,500 | $ | 80,017 | $ | 75,579 | ||||||||
Gross profit | 14,840 | 15,674 | 48,481 | 43,133 | ||||||||||||
Operating income | 3,398 | 3,443 | 7,033 | 2,819 | ||||||||||||
Other income (expense), net | 41 | (67 | ) | 97 | 3,432 | |||||||||||
Income before taxes | 3,439 | 3,376 | 7,130 | 6,251 | ||||||||||||
Income tax benefit (expense) | 4,785 | (64 | ) | 4,743 | (151 | ) | ||||||||||
Net income | 8,224 | 3,312 | 11,873 | 6,100 | ||||||||||||
Income tax (benefit) expense | (4,785 | ) | 64 | (4,743 | ) | 151 | ||||||||||
Interest (income) expense, net | (75 | ) | 40 | (85 | ) | 301 | ||||||||||
Depreciation and amortization | 347 | 2,092 | 1,923 | 3,840 | ||||||||||||
Non-cash stock-based compensation | 13 | 6 | 35 | 31 | ||||||||||||
Adjusted EBITDA* | $ | 3,724 | $ | 5,514 | $ | 9,003 | $ | 10,423 | ||||||||
| BALANCE SHEETS | December 31, 2022 | December 31, 2021 | ||||||||||||||
| (In thousands) | ||||||||||||||||
Total current assets | $ | 42,000 | $ | 27,803 | ||||||||||||
Total assets | $ | 72,655 | $ | 52,361 | ||||||||||||
Total current liabilities | $ | 31,708 | $ | 31,000 | ||||||||||||
Total stockholders' equity | $ | 22,875 | $ | 11,310 | ||||||||||||
| *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: [email protected]
SOURCE: Vaso Corporation