4th quarter gross profit grows by nearly 90%, operating loss reduced by 73%
ROCHESTER, N.Y., Feb. 25 /PRNewswire-FirstCall/ -- VirtualScopics, Inc. (Nasdaq: VSCP), a leading provider of quantitative imaging for clinical trials, announced today that revenues for the fourth quarter of 2008 were over $1.9 million, a 33% increase over prior year's fourth quarter. Revenues for the year ended December 31, 2008 were approximately $7.1 million compared to $5.6 million in the comparable period in 2007. The gross profit for the fourth quarter of 2008 was $973,522 compared to $513,361 in the fourth quarter of 2007, representing a 90% increase. Gross margin increased to 50%, in the fourth quarter ended December 31, 2008 compared to 35% in the fourth quarter of 2007, a 43% improvement. The Company's operating loss for the quarter ended December 31, 2008 was reduced by $828,536, or 73%, to $313,915 compared to $1,142,451 for the prior year's comparable period.
"We are extremely proud of the significant accomplishments we have made across many fronts in 2008," stated Jeff Markin, president and chief executive officer of VirtualScopics. "From a client perspective, we have expanded our customer base by securing contracts with an additional three leading pharmaceutical companies and have demonstrated a greater than 65% increase in the average size of new projects which now stands at $350,000. These two items, we believe, provide the best validation of our value proposition to the industry." He added, "On top of this confidence we are seeing from our customers, we also achieved our 2008 guidance in delivering a 50% gross margin in the fourth quarter, demonstrating the strength in our business model as we enter 2009."
The company announced additional highlights during 2008, including:
"In early 2008, we announced that we had targeted the fourth quarter of 2008 for the company to be cash flow breakeven on an operating basis(1), I am very pleased to announce that we have achieved this objective," stated Molly Henderson, chief business and financial officer of VirtualScopics, Inc. She continued, "Not only is this an essential milestone for the company, especially in light of the volatility within the financial markets, but also provides us the ability to be self sufficient from a cash perspective which is extremely important for the company and our stockholders." She concluded, "This accomplishment, coupled with meeting our revenue and gross margin targets, has resulted in us delivering our strongest financial quarter and full year in the company's history."
Jeff Markin and Molly Henderson will provide a business and 2009 update and discuss these results during the conference call on Thursday, February 26, 2009 at 11:00 a.m. EST. Interested participants should call 877-407-0778 when calling within the United States or 201-689-8565 when calling internationally. There will be a playback available until March 26, 2009. To listen to the playback, please call 877-660-6853 when calling within the United States or 201-612-7415 when calling internationally. For the replay, please use account number: 286, conference ID number: 313687.
About VirtualScopics, Inc.
VirtualScopics, Inc. is a leading provider of imaging solutions to accelerate drug and medical device development. VirtualScopics has developed a robust software platform for analysis and modeling of both structural and functional medical images. In combination with VirtualScopics' industry-leading experience and expertise in advanced imaging biomarker measurement, this platform provides a uniquely clear window into the biological activity of drugs and devices in clinical trial patients, allowing sponsors to make better decisions faster. For more information about VirtualScopics, visit www.virtualscopics.com.
The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created thereby. These forward-looking statements include, but are not limited to, statements regarding the expected benefits of the Company's investment in infrastructure and new customer contract signings and awards in 2008 and/or statements preceded by, followed by or that include the words "believes," "could," "expects," "anticipates," "estimates," "intends," "plans," "projects," "seeks," or similar expressions. Forward-looking statements deal with the Company's current plans, intentions, beliefs and expectations. Investors are cautioned that all forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Many of these risks and uncertainties are discussed in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007 filed with the Securities and Exchange Commission (the "SEC"), and in any subsequent reports filed with the SEC, all of which are available at the SEC's website at www.sec.gov. These include without limitation: the risk of cancellation or delay of customer contracts or specifically as it relates to contact awards, the risk that they may not get signed. Other risks include the company's dependence on its largest customers and risks of contract performance, protection of our intellectual property and the risks of infringement of the intellectual property rights of others. All forward-looking statements speak only as of the date of this press release and the Company undertakes no obligation to update such forward-looking statements.
(1) Operating cash flow breakeven = Operating loss less depreciation, amortization and stock compensation expense
-Financial tables to follow-
VirtualScopics, Inc. and Subsidiary Consolidated Statements of Operations For the Three Months For the Year Ended Ended December 31, December 31, 2008 2007 2008 2007 (unaudited) (unaudited) (unaudited) Revenues $1,947,501 $1,462,336 $7,130,518 $5,647,049 Cost of services 973,979 948,975 4,031,198, 3,680,409 Gross profit 973,522 513,361 3,099,320 1,966,640 Operating expenses Research and development 243,553 315,706 941,193 1,440,312 Sales and marketing 282,854 193,546 1,219,882 749,329 General and administrative 446,054 580,490 2,035,077 2,268,668 Stock-based compensation expense 199,392 443,428 1,123,283 1,484,884 Depreciation and amortization 115,584 122,642 466,149 485,520 Total operating expenses 1,287,437 1,655,812 5,785,584 6,428,713 Operating loss (313,915) (1,142,451) (2,686,264) (4,462,073) Other income (expense) Interest income 13,920 39,324 73,599 153,968 Other expense (4,541) (4,349) (16,077) (13,279) Total other income 9,379 34,975 57,522 140,689 Net Loss (304,536) (1,107,476) (2,628,742) (4,321,384) Preferred stock deemed dividend - 1,381,163 - 1,381,163 Series B preferred stock cash dividend 84,520 12,567 338,827 99,433 Net loss attributable to common stockholders $(389,056) $(2,501,206) $(2,967,569) $(5,801,980) Basic and diluted net loss per common share $(0.02) $(0.11) $(0.13) $(0.25) Weighted average number of common shares outstanding Basic and diluted 23,492,651 23,148,152 23,389,705 23,058,820 VirtualScopics, Inc. and Subsidiary Consolidated Balance Sheets December 31, 2008 2007 Assets (unaudited) Current assets Cash and cash equivalents $3,143,904 $3,955,835 Restricted cash - 455,583 Accounts receivable 1,021,110 648,300 Prepaid expenses and other assets 263,297 306,301 Total current assets 4,428,311 5,366,019 Restricted cash - 43,216 Patents, net 1,920,446 1,948,785 Property and equipment, net 355,479 542,679 Other assets 156,788 280,317 Total assets $6,861,024 $8,181,016 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued expenses $659,009 $626,693 Accrued payroll 554,425 221,013 Unearned revenue 291,594 279,275 Total current liabilities 1,505,028 1,126,981 Commitments and Contingencies Stockholders' Equity Convertible preferred stock, $0.001 par value; 15,000,000 shares authorized; 8,400 shares designated Series A; issued and outstanding: 3,976 at December 31, 2008, 4,001 at December 31, 2007; liquidation preference $1,000 per share 4 4 6,000 shares designated Series B; issued and outstanding: 4,226 at December 31, 2008, 4,230 at December 31, 2007; liquidation preference $1,000 per share 4 4 Common Stock, $0.001 par value; 85,000,000 shares authorized; shares issued and outstanding: 23,502,352 at December 31, 2008, 23,225,664 at December 31, 2007 23,503 23,226 Additional paid-in capital 16,546,550 15,715,557 Accumulated deficit (11,214,065) (8,684,756) Total stockholders' equity 5,355,996 7,054,035 Total liabilities and stockholders' equity $6,861,024 $8,181,016
CONTACT: Company Contact: Molly Henderson Chief Business and Financial Officer 500 Linden Oaks Rochester, New York 14625 (585)249.6231
|SOURCE VirtualScopics, Inc.|
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