Vaso Corporation Announces Financial Results for Second Quarter 2021

Rhea-AI Summary

Vaso Corporation reported a net income of $2.8 million for Q2 2021, primarily due to the forgiveness of a $3.6 million PPP loan. Revenue for the quarter totaled $16.1 million, slightly down from $16.3 million in Q2 2020. The company experienced an operating loss of $0.7 million, compared to $0.6 million in the prior year. For the first half, revenue was $32.7 million, down from $33.5 million year-over-year. Operating cash flow improved by 39% to $5.6 million.

Positive

• Net income improved to $2.8 million due to PPP loan forgiveness.
• Operating cash flow increased by 39% to $5.6 million.
• Gross profit rose by 3% to $8.6 million.

Negative

• Operating loss of $0.7 million, slightly worse than $0.6 million in Q2 2020.
• Revenue decreased by 1% from $16.3 million to $16.1 million year-over-year.
• IT segment revenue declined by 3%, attributed to COVID-19 impacts.

Company reports net income of $2.8 million with forgiveness of PPP loan

PLAINVIEW, NY / ACCESSWIRE / August 13, 2021 / Vaso Corporation ("Vaso") (OTC PINK:VASO) today reported its operating results for the three months ended June 30, 2021.

"In the second quarter of 2021, the Company recorded an operating loss of $0.7 million on revenue of $16.1 million, as compared to an operating loss of $0.6 million on revenue of $16.3 million in the same quarter of the prior year. For the first half of the year, operating loss decreased by $0.7 million, or 37%, to $1.3 million on revenue of $32.7 million from $2.0 million on revenue $33.5 million for the first half of 2020," commented Dr. Jun Ma, President and Chief Executive Officer of Vaso Corporation. "We are very much encouraged by the operating results this year so far, especially the progress in the IT segment despite the continued negative impact of the COVID-19 pandemic."

"With the forgiveness of the $3.6 million PPP (Paycheck Protection Program) loan in June, which was accounted for as other income, the Company recorded net income of $2.8 million and $2.1 million for the three- and six-month periods ending June 30, 2021, respectively. Operating cash flow during the first half of the year was up 39% year-over-year, enabling us to pay down most of the debts," Dr. Ma continued.

"New variants of the COVID virus have brought new challenges to the world and have greatly slowed down the economic reopening in the country. However, we remain cautiously optimistic for the remainder of the year as we have reduced operating expenses, improved business efficiency, and prepared for the market uncertainty going forward," concluded Dr. Ma.

Financial Results for Three Months Ended June 30, 2021

For the three months ended June 30, 2021, revenue decreased 1% to $16.1 million from $16.3 million for the same period of 2020. When compared to the second quarter of 2020, revenue in the IT segment decreased $0.3 million or 3%, as this segment continued to experience the impact of COVID-19; revenue in our professional sales service segment increased $0.3 million or 5% as a result of higher deliveries of underlying equipment by our partner and a higher blended commission rate; and revenue in the equipment segment decreased $0.1 million or 10% as a result of lower EECP service revenue.

Gross profit for the second quarter of 2021 increased 3% to $8.6 million, compared with a gross profit of $8.4 million for the same quarter of 2020. This increase was primarily the result of the increase in revenue in the professional sales service segment.

Selling, general and administrative (SG&A) expenses for the second quarter of 2021 increased 4% to $9.2 million, when compared to the first quarter of 2020. The increase is primarily attributable to higher travel and personnel costs in the professional sales service and equipment segments as well as an increase in corporate accounting fees, offset by a reduction in the costs in the IT segment as a result of lower personnel costs.

Other income, net, increased $3.6 million in the second quarter 2021 from net expense of $54 thousand in the second quarter 2020. The increase was due primarily to the $3.6 million gain on the forgiveness of the PPP loan.

Net income for the three months ended June 30, 2021 was $2.8 million, compared to a net loss of $0.7 million in the second quarter 2020. The improvement was primarily due to the forgiveness of the PPP loan.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation) was $3.4 million for the three months ended June 30, 2021, compared to $121 thousand for the same period a year ago.

Net cash provided by operating activities in the first six months of 2021 was $5.6 million, a 39% improvement when compared to cash provided by operations of $4.0 million for the same period in 2020. The Company repaid debt totaling $3.0 million in the first half of 2021 and an additional $2.6 million in August 2021. As of June 30, 2021 and December 31, 2020, the Company had cash and cash equivalents of approximately $9.4 million and $6.8 million, respectively.

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 SIX MONTHS ENDED
STATEMENTS OF OPERATIONS		June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
		(In thousands)
Revenue		$	16,131			$	16,294			$	32,651			$	33,523
Gross profit			8,640				8,374				17,200				17,514
Operating loss			(722	)			(632	)			(1,262	)			(1,992	)
Other (expense) income, net			3,552				(54	)			3,467				(288	)
Income (loss) before taxes			2,830				(686	)			2,205				(2,280	)
Income tax benefit (expense)			(50	)			(11	)			(68	)			108
Net income (loss)		$	2,780			$	(697	)		$	2,137			$	(2,172	)
Income tax expense (benefit)			50				11				68				(108	)
Interest expense (income), net			78				152				199				412
Depreciation and amortization			528				628				1,124				1,251
Non-cash stock-based compensation			8				27				17				54
Adjusted EBITDA*		$	3,444			$	121			$	3,545			$	(563	)

*Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization and non-cash stock-based compensation

BALANCE SHEETS		June 30, 2021				December 31, 2020
		(In thousands)
Total current assets		$	18,133			$	22,268
Total assets		$	45,043			$	50,376
Total current liabilities		$	29,230			$	31,699
Total stockholders' equity		$	7,269			$	5,085

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: 516-508-5840
Email: mbeecher@vasocorporation.com

SOURCE: Vaso Corporation

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FAQ

What were Vaso Corporation's Q2 2021 financial results?

In Q2 2021, Vaso reported a net income of $2.8 million and revenue of $16.1 million, with an operating loss of $0.7 million.

How did the forgiveness of the PPP loan affect Vaso's earnings?

The forgiveness of the $3.6 million PPP loan contributed significantly to Vaso's net income, which improved to $2.8 million in Q2 2021.

What is Vaso's outlook for the remainder of 2021?

Vaso remains cautiously optimistic, focusing on reducing operating expenses and improving business efficiency despite ongoing COVID-19 challenges.

What are the key revenue segments for Vaso Corporation?

Vaso's key segments include IT services, professional sales services, and medical equipment, all of which showed varying performance impacted by COVID-19.

What was the adjusted EBITDA for Vaso in Q2 2021?

Vaso's adjusted EBITDA for Q2 2021 was $3.4 million, compared to $121 thousand in the same quarter last year.