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Vital Images Announces Second Quarter Results
(GlobeNewswire Via Acquire Media NewsEdge) MINNEAPOLIS, Aug. 5, 2009 (GLOBE NEWSWIRE) -- Vital Images, Inc. (Nasdaq:VTAL), a leading provider of advanced visualization and analysis solutions, today reported financial results for the second quarter ended June 30, 2009. Second quarter revenue was $13.4 million, compared to $15.7 million for the second quarter of 2008. Second quarter net loss was $(19.6) million, or $(1.37) per diluted share, which included $18.1 million of non-cash charges representing $(1.27) per diluted share, compared to a net loss of $(1.6) million, or $(0.09) per diluted share, for the second quarter of 2008.
Second quarter adjusted EBITDA (a non-GAAP measure) was $520,000, compared to negative adjusted EBITDA of $(936,000) for the second quarter of 2008. Second quarter non-cash charges of $18.1 million consisted of a $15.0 million valuation allowance against the company's deferred tax assets and a $3.1 million write-off of capitalized costs relating to the unimplemented portion of the company's enterprise resource planning system due to continued cost-control efforts. The non-cash charges have no impact on Vital Images' cash flow or liquidity. The company generated $931,000 in cash flow from operations in the first six months of 2009.
Michael H. Carrel, Vital Images president and chief executive officer, said, "While the economic downturn continues to constrain hospital capital spending and, as a result, our revenue, we remain confident in our ability to remain cash flow positive and that our enterprise strategy of providing anywhere, anytime access to our industry-leading clinical software applications is the best way to serve patients, physicians and hospitals."
Carrel continued, "Given our resources, we are continuing to make strategic investments in research and development, services and improving market share while maintaining positive adjusted EBITDA in 2009. Once hospital spending rebounds, we will be in an excellent position to return to revenue and earnings growth."
Financial Summary
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- -------------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Revenue:
License fees $ 4,565 $ 7,706 $10,559 $17,064
Maintenance and
services 8,371 7,811 16,932 15,345
Hardware 439 190 672 615
------- ------- ------- -------
Total revenue $13,375 $15,707 $28,163 $33,024
======= ======= ======= =======
Revenue by channel
and as a percent
of total revenue:
Direct and other
distributors $ 5,826 44% $ 7,824 50% $12,381 44% $16,358 50%
Toshiba 7,549 56 7,883 50 15,782 56 16,666 50
----------- ----------- ----------- -----------
Total revenue $13,375 100% $15,707 100% $28,163 100% $33,024 100%
=========== =========== =========== ===========
Revenue by
geography:
United States $ 8,995 $11,987 $18,679 $25,211
Europe 2,352 1,921 5,015 3,960
Asia and Pacific 795 924 2,143 1,949
Other foreign 1,233 875 2,326 1,904
------- ------- ------- -------
Total revenue $13,375 $15,707 $28,163 $33,024
======= ======= ======= =======
Export revenue as a
percent of total
revenue: 33% 24% 34% 24%
* Cash and investments were $141.1 million as of June 30, 2009,
compared to $144.9 million as of March 31, 2009. During the second
quarter of 2009, the company repurchased 236,000 shares of its
common stock for $2.5 million under its publicly announced share
repurchase program. As of June 30, 2009, up to 618,000 shares
remained to be purchased under the program.
* As noted above, the company recorded $18.1 million of non-cash
charges during the second quarter of 2009 which consisted of:
-- A $15.0 million valuation allowance against the company's
deferred tax assets. Accounting standards require, except in
very limited circumstances, that a valuation allowance be
established when there are cumulative losses in recent years.
Therefore, the company established a valuation allowance
against its deferred tax assets. The company may be able to
utilize some if not all of the assets to reduce tax payments
if pretax results improve in future periods.
-- A $3.1 million write-off of capitalized costs relating to the
unimplemented portion of the company's enterprise resource
planning system due to continued cost-control efforts.
* Operating Expenses Summary:
-- Sales and marketing, research and development, and general and
administrative expenses for the 2009 second quarter decreased 25
percent to $11.9 million, compared to $15.8 million for the same
period in 2008. The decrease was due primarily to the reduction
in workforce in November 2008 and other cost-control measures.
-- Sales and marketing expense was $6.0 million for the 2009 second
quarter, compared to $8.1 million for the same period in 2008.
The decrease was due primarily to lower compensation costs and
reduced commission expense associated with a decrease in sales.
-- Research and development expense was $3.2 million for the 2009
second quarter, compared to $4.4 million for the same period in
2008. Lower compensation costs and reduced utilization of
consultants contributed to the expense decrease.
-- General and administrative expense was $2.7 million for the
second quarter of 2009, compared to $3.3 million for the same
period in 2008, due primarily to lower compensation costs and
other cost-control measures.
Non-GAAP Information
To supplement the company's condensed consolidated financial statements presented on a GAAP basis, Vital Images uses adjusted EBITDA (a non-GAAP measure), which is adjusted to exclude certain items to enhance the overall understanding of our past financial performance. These adjustments to GAAP results are made with the intent of providing both management and investors a more complete understanding of Vital Images' underlying operational results and trends and our marketplace performance. In addition, these non-GAAP results are among the information management uses to establish internal operating budgets, supplement the financial results and forecasts reported to the company's board of directors, determine a portion of bonus compensation for executive officers and certain other key employees, and evaluate short-term and long-term operating trends in the company's core operations. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP and may not be computed the same as similarly titled measures used by other companies.
The following is a reconciliation from GAAP results to adjusted EBITDA:
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Adjusted EBITDA (in thousands):
Operating loss $ (4,959) $ (3,719) $ (5,912) $ (6,309)
Equity-based compensation 982 1,310 1,974 2,542
Depreciation and amortization
of property and equipment 1,260 1,212 2,545 2,456
Amortization of identified
intangibles 90 261 246 522
Asset impairment 3,147 -- 3,147 --
-------- -------- -------- --------
Adjusted EBITDA $ 520 $ (936) $ 2,000 $ (789)
======== ======== ======== ========
Conference Call and Webcast
Vital Images will host a live webcast of its second quarter earnings conference call, Thursday, August 6, 2009 at 10:30 a.m. CT. To access this webcast, go to the investors' portion of the company's Web site, www.vitalimages.com, and click on the webcast icon. If you wish to listen to an audio replay of the conference call, dial (888) 203-1112 and enter conference call ID #8443855. The audio replay will be available beginning at 2:00 p.m. CT on Thursday, August 6, 2009 through 5:00 p.m. CT on Thursday, August 20, 2009.
About Vital Images
Vital Images, Inc., headquartered in Minneapolis, is a leading provider of advanced visualization and analysis software solutions. The company's technology gives radiologists, cardiologists, oncologists and other medical specialists time-saving productivity and communications tools that can be accessed throughout the enterprise and via the Web for easy use in the day-to-day practice of medicine. For more information, visit www.vitalimages.com.
The Vital Images, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5843
Forward-Looking Statements
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that Act. These statements involve risks and uncertainties which could cause results to differ materially from those projected, including but not limited to dependence on market growth, challenges associated with international expansion, the ability to predict product, customer and geographic sales mix, fluctuations in interest rates, regulatory approvals, the timely introduction, availability and acceptance of new products, the impact of competitive products and pricing, dependence on major customers, the ability to successfully manage operating costs, fluctuations in quarterly results, approval of products for reimbursement and the level of reimbursement, and other factors detailed from time to time in Vital Images' SEC reports, including its annual report on Form 10-K for the year ended December 31, 2008. Vital Images encourages you to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements contained in this release. As a result of these matters, changes in facts, assumptions not being realized or other circumstances, the company's actual results may differ materially from the expected results discussed in the forward-looking statements contained in this release. The forward-looking statements made in this release are made only as of the date of this release, and, except as may be required by law, the company undertakes no obligation to update them to reflect subsequent events or circumstances.
Vital Images(r) and Vitrea(r) are registered trademarks of Vital Images, Inc. Vital Images disclaims any proprietary interest in the marks and names of others.
Vital Images, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenue:
License fees $ 4,565 $ 7,706 $ 10,559 $ 17,064
Maintenance and services 8,371 7,811 16,932 15,345
Hardware 439 190 672 615
-------- -------- -------- --------
Total revenue 13,375 15,707 28,163 33,024
Cost of revenue:
License fees 558 1,011 1,528 2,164
Maintenance and services 2,268 2,479 4,645 5,051
Hardware 424 111 633 306
-------- -------- -------- --------
Total cost of revenue 3,250 3,601 6,806 7,521
Gross profit 10,125 12,106 21,357 25,503
Operating expenses:
Sales and marketing 6,040 8,117 11,995 16,168
Research and development 3,184 4,378 6,445 8,663
General and administrative 2,713 3,330 5,682 6,981
Asset impairment 3,147 -- 3,147 --
-------- -------- -------- --------
Total operating expenses 15,084 15,825 27,269 31,812
Operating loss (4,959) (3,719) (5,912) (6,309)
Interest income 330 1,159 760 2,844
-------- -------- -------- --------
Loss before income taxes (4,629) (2,560) (5,152) (3,465)
Provision (benefit) for income
taxes 14,992 (983) 14,720 (1,294)
-------- -------- -------- --------
Net loss $(19,621) $ (1,577) $(19,872) $ (2,171)
======== ======== ======== ========
Net loss per share - basic and
diluted $ (1.37) $ (0.09) $ (1.38) $ (0.13)
======== ======== ======== ========
Weighted average common shares
outstanding - basic and
diluted 14,288 16,827 14,402 16,951
======== ======== ======== ========
Vital Images, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
June 30, Dec. 31,
2009 2008
-------- --------
Assets
Current assets:
Cash and cash equivalents $110,106 $109,706
Marketable securities 14,117 37,287
Accounts receivable, net 11,369 13,047
Deferred income taxes -- 654
Prepaid expenses and other current assets 1,931 2,179
-------- --------
Total current assets 137,523 162,873
Marketable securities 16,879 --
Property and equipment, net 7,251 11,519
Deferred income taxes -- 13,904
Other intangible assets, net 562 808
Goodwill 9,089 9,089
-------- --------
Total assets $171,304 $198,193
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,364 $ 3,792
Accrued compensation 2,624 2,936
Accrued royalties 419 1,057
Other current liabilities 2,405 1,947
Deferred revenue 15,847 17,724
-------- --------
Total current liabilities 23,659 27,456
Deferred revenue 1,131 1,164
Deferred rent 676 882
-------- --------
Total liabilities 25,466 29,502
-------- --------
Stockholders' equity:
Preferred stock: $0.01 par value; 5,000 shares
authorized; none issued or outstanding -- --
Common stock: $0.01 par value; 40,000 shares
authorized; 14,259 issued and outstanding as of
June 30, 2009; and 14,673 shares issued and
outstanding as of December 31, 2008 143 147
Additional paid-in capital 165,805 168,738
Accumulated deficit (20,252) (380)
Accumulated other comprehensive income 142 186
-------- --------
Total stockholders' equity 145,838 168,691
-------- --------
Total liabilities and stockholders' equity $171,304 $198,193
======== ========
Vital Images, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
For the Six Months
Ended June 30,
------------------
2009 2008
-------- --------
Cash flows from operating activities:
Net loss $(19,872) $ (2,171)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization of property and
equipment 2,545 2,456
Amortization of identified intangibles 246 522
Asset impairment 3,147 --
Provision for doubtful accounts 88 259
Deferred income taxes 14,664 (1,294)
Excess tax benefit from stock transactions -- (157)
Amortization of discount and accretion of premium
on marketable securities 190 (428)
Employee stock-based compensation 1,974 2,542
Amortization of deferred rent (196) (186)
Changes in operating assets and liabilities:
Accounts receivable 1,590 1,735
Prepaid expenses and other assets 248 (137)
Accounts payable (1,207) 111
Accrued expenses and other liabilities (576) 571
Deferred revenue (1,910) 801
-------- --------
Net cash provided by operating activities 931 4,624
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (1,645) (2,792)
Purchases of marketable securities (16,774) (68,427)
Proceeds from maturities of marketable securities 22,725 36,917
Proceeds from sale of marketable securities -- 1,581
-------- --------
Net cash provided by (used in) investing
activities 4,306 (32,721)
-------- --------
Cash flows from financing activities:
Repurchases of common stock (5,757) (13,309)
Proceeds from sale of common stock under stock
plans 920 999
Excess tax benefit from stock transactions -- 157
-------- --------
Net cash used in financing activities (4,837) (12,153)
-------- --------
Net increase (decrease) in cash and cash
equivalents 400 (40,250)
Cash and cash equivalents, beginning of period 109,706 146,685
-------- --------
Cash and cash equivalents, end of period $110,106 $106,435
======== ========
CONTACT: Vital Images
Peter J. Goepfrich, Chief Financial Officer
(952) 487-9500
www.vitalimages.com
Padilla Speer Beardsley:
Nancy A. Johnson
(612) 455-1745
njohnson@psbpr.com
Marian Briggs
(612) 455-1742
mbriggs@psbpr.com
2009 GlobeNewswire, Inc.
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