ROCHESTER, N.Y., Aug. 12 /PRNewswire-FirstCall/ -- VirtualScopics, Inc. (Nasdaq: VSCP), a leading provider of quantitative imaging for clinical trials, today announced its financial results for the quarter and six months ended June 30, 2009.
Highlights include:
"This has been a transformational year for VirtualScopics," stated Jeff Markin, president and chief executive officer of VirtualScopics. "We have successfully progressed the company from a consumer of cash to a generator of cash. I am especially pleased that we have accomplished this by building a strong operational foundation with a talented and committed team that is focused on our customers and returning value to our stockholders."
"The second quarter of 2009 was the strongest financial quarter of the company's history," said Molly Henderson, chief business and financial officer of VirtualScopics, Inc. She continued, "On all significant comparative financial metrics, we demonstrated solid results. Our year to date Adjusted EBITDA improved over $1,100,000 compared to the same period last year. This significant improvement captures the essence of our progress over the past twelve months as well as the strength of our business." She concluded, "We are very pleased with our financial results for the first half of 2009 and remain optimistic on our outlook for 2009."
Jeff Markin and Molly Henderson will provide a business update and discuss these results during a conference call on Thursday, August 13, 2009 at 11:00 a.m. EDT. Interested participants should call 888-352-6795 when calling within the United States or 719-325-2192 when calling internationally. The call can also be accessed at www.virtualscopics.com and will be available for 30 days after the call.
The Company defines Adjusted EBITDA as earnings less interest, taxes (if any), depreciation and amortization as further adjusted to exclude stock compensation expense and the loss on derivative instrument (mark to market adjustment for warrants). The Company provides Adjusted EBITDA as a supplemental measure to GAAP regarding the Company's operational performance. This financial measure excludes the impact of certain items and, therefore, has not been calculated in accordance with GAAP. The Company's method of calculating Adjusted EBITDA, however, may differ from methods used by other companies, and, as a result, Adjusted EBITDA measures disclosed herein may not be comparable to other similarly titled measures used by other companies. The Company continues to provide information in accordance with GAAP, however, with the adoption of EITF 07-05 and the non-cash variable nature of stock compensation expense and their very substantial impact on the overall reported net losses, the Company believes it is also helpful for investors to receive additional information relating more specifically to the Company's operating results. Accordingly, the Company has presented Adjusted EBITDA which excludes the non-cash effects of EITF 07-05 and FAS 123R on its financial results. Management uses Adjusted EBITDA (a) to evaluate the Company's financial performance, (b) to set internal spending budgets, and (c) to measure operational profitability. In addition, investors have requested these non-GAAP financial measures as a means of providing consistent and comparable information with past reports of financial results. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure, net loss, below.
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.
Forward-Looking Statements
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 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-K for the fiscal year ended December 31, 2008 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 contract 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.
-Financial tables to follow-
VirtualScopics, Inc. and Subsidiary Condensed Consolidated Statements of Operations (unaudited) For the Three Months For the Six Months Ended June 30, Ended June 30, 2009 2008 2009 2008 Revenues $2,541,316 $1,733,299 $4,675,685 $3,367,402 Cost of services 1,147,980 1,021,536 2,162,564 2,051,520 --------- --------- --------- --------- Gross profit 1,393,336 711,763 2,513,121 1,315,882 --------- ------- --------- --------- Gross margin 55% 41% 54% 39% Operating expenses Research and development 258,180 212,825 493,735 464,654 Sales and marketing 357,222 384,237 639,676 673,111 General and administrative 590,496 580,435 1,149,843 1,074,876 Stock-based compensation expense 269,016 284,228 554,348 687,291 Depreciation and amortization 119,126 116,765 236,636 234,332 ------- ------- ------- ------- Total operating expenses 1,594,040 1,578,490 3,074,238 3,134,264 --------- --------- --------- --------- Operating loss (200,704) (866,727) (561,117) (1,818,382) Other income (expense) Interest income 87 17,002 3,280 45,727 Other expense (6,592) (1,385) (8,076) (2,968) Loss on derivative financial instrument (205,914) - (603,323) - -------- --- -------- --- Total other (expense) income (212,419) 15,617 (608,119) 42,759 -------- ------ -------- ------ Net Loss (413,123) (851,110) (1,169,236) (1,775,623) Series B preferred stock cash dividend 84,520 84,520 169,040 169,760 ------ ------ ------- ------- Net loss attributable to common stockholders $(497,643) $(935,630) $(1,338,276)$(1,945,383) ========= ========= =========== ========== Basic and diluted net loss per common share $(0.02) $(0.04) $(0.06) $(0.08) ====== ====== ====== ====== Weighted average number of common shares outstanding basic and diluted 23,738,855 23,358,625 23,636,886 23,302,346 ========== ========== ========== ========== VirtualScopics, Inc. and Subsidiary Condensed Consolidated Balance Sheets June 30, December 31, 2009 2008 Assets (unaudited) Current assets Cash and cash equivalents $3,157,927 $3,143,904 Accounts receivable 1,395,565 1,021,110 Prepaid expenses and other current assets 355,104 263,297 ------- ------- Total current assets 4,908,596 4,428,311 Patents, net 1,877,522 1,920,446 Property and equipment, net 428,960 355,479 Other assets 95,023 156,788 ------ ------- Total assets $7,310,101 $6,861,024 ========== ========== Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued expenses $984,035 $659,009 Accrued payroll 452,081 554,425 Unearned revenue 609,493 291,594 Derivative liability 1,026,231 - --------- - Total current liabilities 3,071,840 1,505,028 --------- --------- Stockholders' Equity Convertible preferred stock, $0.001 par value; 15,000,000 shares authorized; 8,400 shares designated Series A; issued and outstanding: 3,773 at June 30, 2009, 3,976 at December 31, 2008; liquidation preference $1,000 per share 4 4 6,000 shares designated Series B; issued and outstanding: 4,226 at June 30, 2009 and December 31, 2008; liquidation preference $1,000 per share 4 4 Common Stock, $0.001 par value; 85,000,000 shares authorized; issued and outstanding, 23,758,632 at June 30, 2009 and 23,502,352 at December 31, 2008 23,759 23,503 Additional paid-in capital 13,881,704 16,546,550 Accumulated deficit (9,667,210) (11,214,065) ---------- ----------- Total stockholders' equity 4,238,261 5,355,996 --------- --------- Total liabilities and stockholders' equity $7,310,101 $6,861,024 ========== ========== Three Months Three Months Ended Ended Adjusted EBITDA (non-GAAP measurement): June 30, 2009 June 30, 2008 Net loss ($413,123) ($851,110) Interest income ($87) ($17,002) Depreciation and Amortization $119,126 $116,765 Stock-based compensation expense (non-cash) $269,016 $284,228 Loss on derivative financial instrument (non-cash) $205,914 - -------- --- Adjusted EBITDA $180,846 ($467,119) -------- --------- Basic and diluted, Adjusted EBITDA per common share, non-GAAP $0.01 ($0.02) ===== ====== Six Months Six Months Ended Ended Adjusted EBITDA (non-GAAP June 30, 2009 June 30, 2008 measurement): Net loss ($1,169,236) ($1,775,623) Interest income ($3,280) ($45,727) Depreciation and Amortization $236,636 $234,332 Stock-based compensation expense (non-cash) $554,348 $687,291 Loss on derivative financial instrument (non-cash) $603,323 - -------- --- Adjusted EBITDA $221,791 ($899,727) -------- --------- Basic and diluted, Adjusted EBITDA per common share, non-GAAP $0.01 ($0.04) ===== ======
CONTACT: Company Contact: Molly Henderson Chief Business and Financial Officer 500 Linden Oaks Rochester, New York 14625 (585)249.6231
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