The earnings were hardly impressive. I will hold one more quarter. The research is more impressive than the sales. I wonder if there are simply a limited demand from physicians, even tho the clinical targeted audience, including me, is huge.
asomedical Reports Fiscal 2002 Second Quarter Results
Revenues Increase 32% and EBIT Increases 27%
WESTBURY, N.Y., Jan 14, 2002 (BW HealthWire) -- Vasomedical, Inc. (NasdaqSmallCap: VASO chart, msgs), a leader in the field of noninvasive treatment for
cardiovascular diseases, today announced financial results for the second quarter ended November 30, 2001, reporting $8.54 million in revenues, a quarter-to-quarter
improvement from November 30, 2000 of $2.09 million or 32%.
Earnings before income taxes (EBIT) for the second quarter of fiscal 2002 were $1.61 million, an improvement of $344,000 or 27% from the prior-year second quarter. Net
earnings reported were $1.01 million, or $.02 per share (basic and diluted), compared to $1.69 million, or $0.03 per share (basic and diluted) last year.
Net earnings were primarily impacted by the accounting treatment of income taxes in the respective periods. For the three months ended November 30, 2001, pre-tax
earnings or EBIT were reduced by a provision for income taxes of $605,000. This is in contrast to a deferred income tax benefit of $428,000 added to EBIT for the November
30, 2000 quarterly period. Similarly, EBIT for the six months ended November 30, 2001 was reduced by a provision for income taxes of $1.33 million compared to a deferred
tax benefit recorded in the prior semi-annual period of $786,000. The current accounting treatment resulted from the fiscal 2001 elimination of the valuation allowance on
deferred tax assets and the recording of an increase in such deferred tax assets of more than $13 million. This resulted in an increase to earnings of $6.5 million and an
increase to stockholders' equity of $7.2 million reported in fiscal 2001. Although the Company now reports a provision for income taxes in its fiscal 2002 income statements,
this expense will not require a significant use of cash toward the payment of income taxes for the foreseeable future. The Company will simply reduce the amount of the
deferred tax assets previously recorded until they are fully utilized.
D. Michael Deignan, President and CEO of Vasomedical commented, "The Company has reported its eleventh consecutive profitable quarter and continues to achieve
strong revenue and EBIT growth. Understandably, the rate of revenue growth in this quarter was slowed by the September 11th tragedy, which effectively curtailed selling
activities for a few weeks and which resulted in the cancellation of one major scientific meeting and a substantial reduction in attendance at the Heart Failure Society of
America and the American Heart Association sessions. However, based on our present level of sales activities, our market remains strong and we expect positive financial
performance to be sustainable for the balance of fiscal 2002 and beyond. Awareness and acceptance of EECP as an important therapy in the growing worldwide
cardiovascular disease marketplace continues to expand. This has been aided by the increase in the average Medicare rate, which takes effect this month, and the volume
of clinical data that continues to be presented in scientific forums and published in major peer-review medical journals."
Mr. Deignan continued, "As stated before, we will continue to increase the size of our direct sales force and independent representative network, as well as step up our
efforts in international markets. We recently secured a commitment letter from our bank to increase our credit facility that will enhance our ability to pursue these and other
operational activities. Several of our clinical initiatives are underway to allow Vasomedical to capitalize on a range of potential cardiac and vascular applications that, if
validated, would significantly enlarge the clinical footprint for EECP therapy. We remain confident that we have positioned the Company for future growth in 2002 and the
years ahead."
The increase in revenues and improved financial performance in the second quarter and year-to-date compared to the respective prior year periods was due to strong sales
of the Company's EECP enhanced external counterpulsation system used to deliver noninvasive therapy for the treatment of cardiovascular diseases. In fiscal 2002 to date,
the Company shipped 54% more systems over the prior-year under various domestic and non-domestic commercial arrangements, including direct sales, sales-type
leases, rentals and sales to foreign distributors.
The Company continues to demonstrate an ability to effectively leverage its developing infrastructure as selling, general & administrative declined as a percentage of sales
from 47% to 38% for the three months ended November, 2001 and from 48% to 38% for the six months ended November 30, 2001 compared to the respective prior-year
periods.
Research and development costs increased by 136% in the second quarter of fiscal 2002 over last year, representing 14% of current revenues, and increased 147%
year-to-date over last year, representing 13% of year-to-date revenues, principally resulting from the ongoing PEECH(TM) (Prospective Evaluation of EECP in Congestive
Heart Failure) efficacy trial, as well as the initiation of other clinical studies in the U.S. and Europe. The Company intends to aggressively invest in product development and
clinical trials in future periods to further expand the clinical indications for EECP, including, but not limited to, heart failure, diabetes disease management and acute
coronary care syndromes.
EECP is a noninvasive, outpatient therapy for the treatment of diseases of the cardiovascular system. The therapy serves to increase circulation in areas of the heart with
less than adequate blood supply and may restore systemic vascular function. EECP is currently indicated for use in patients with stable or unstable angina, acute
myocardial infarction and cardiogenic shock. The Company is actively engaged in research to determine potential benefits of EECP therapy in the management of other
major vascular disease states, including congestive heart failure and diabetes.
Vasomedical, Inc. is primarily engaged in designing, manufacturing, marketing and supporting external counterpulsation systems based on the Company's proprietary
technology currently indicated for use in cases of angina, cardiogenic shock and acute myocardial infarction. EECP(R) is a registered trademark for Vasomedical's
enhanced external counterpulsation system. This system is now in use at major medical centers, including the Beth Israel Medical Center - New York City, Christ Hospital
and Medical Center, the Cleveland Clinic, Johns Hopkins, JFK Medical Center-Atlantis, FL, Mayo Clinic, the Miami Heart Institute, the Ochsner Foundation Hospital,
Scripps Center for Integrative Medicine - La Jolla, CA, the Texas Heart Institute, and University Hospital at UMDNJ/New Jersey Medical School as well as medical centers
affiliated with Columbia University, State University of New York at Stony Brook, the University of Pittsburgh, the University of California at San Diego, the University of
California at San Francisco, University of Florida at Gainesville, and the University of Virginia. The Company provides hospitals, clinics and private practices with EECP(R)
equipment, treatment guidance and a staff training and maintenance program designed to provide optimal patient outcomes. Additional information is available on the
Company's website at www.vasomedical.com.
VASOMEDICAL, INC.
STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
(unaudited)
Six months ended Three months ended
November 30, November 30,
2001 2000 2001 2000
--------- --------- --------- ---------
Revenues $18,170 $11,699 $8,544 $6,454
Cost of sales
and services 5,343 3,051 2,564 1,688
--------- --------- --------- ---------
Gross Profit 12,827 8,648 5,980 4,766
--------- --------- --------- ---------
Expenses
Selling, general
and administrative 6,973 5,514 3,239 3,069
Research and
development 2,314 937 1,164 493
Interest and other
income - net (40) (112) (33) (63)
--------- --------- --------- ---------
--------- --------- --------- ---------
9,247 6,339 4,370 3,499
--------- --------- --------- ---------
--------- --------- --------- ---------
EARNINGS BEFORE
INCOME TAXES 3,580 2,309 1,610 1,267
Income tax
(expense) benefit (1,332) 786 (605) 428
--------- --------- --------- ---------
NET EARNINGS $2,248 $3,095 $1,005 $1,695
========= ========= ========= =========
========= ========= ========= =========
Earnings per
common share
Basic and diluted $.04 $.05 $.02 $.03
========= ========= ========= =========
========= ========= ========= =========
Weighted average
common shares
outstanding
Basic 57,832 56,256 57,207 56,383
========= ========= ========= =========
========= ========= ========= =========
Diluted 60,199 59,772 59,364 59,852
========= ========= ========= =========
BALANCE SHEET DATA (in thousands)
November 30, 2001 May 31, 2001
Cash, equivalents and
restricted cash $3,134 $4,927
Total current assets $25,110 $22,379
Total assets $39,429 $36,519
Total current liabilities $6,628 $6,164
Long-term debt $1,174 $1,109
Other liabilities $689 $737
Stockholders' equity $30,938 $28,509
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