MINNEAPOLIS, May 6, 2009 (GLOBE NEWSWIRE) -- Vital Images, Inc. (Nasdaq:VTAL), a leading provider of advanced visualization and analysis solutions, today reported revenue for the first quarter ended March 31, 2009 of $14.8 million, compared to $17.3 million for the first quarter of 2008. Net loss for the 2009 first quarter was $(251,000), or $(0.02) per diluted share, compared to a net loss of $(594,000), or $(0.03) per diluted share, for the 2008 first quarter.
The company also reported adjusted EBITDA (a non-GAAP measure) for the first quarter of 2009 of $1.5 million, compared to $147,000 for the first quarter of 2008.
Michael H. Carrel, Vital Images president and chief executive officer, said, "The economic downturn has had a significant impact on our customers, causing delays in hospital capital equipment purchases that continue to affect our revenue. However, our profitability improved significantly, and we remain the market leader in advanced visualization. Our pipeline continues to grow, and we are confident that our enterprise strategy of providing anywhere, anytime access to our industry-leading clinical applications is the best way to serve patients, physicians and hospitals."
"Vital is financially strong, with $1.5 million in both cash from operations and adjusted EBITDA this quarter, and $145 million in cash and investments. In 2009, we are focused on profitability while making strategic investments in building the best products, improving market share and maintaining service excellence. Vital is well-positioned to emerge from this recession an even stronger industry leader. In another demonstration of our confidence in our future prospects, we recently announced a new share repurchase program," said Carrel.
Financial Summary
For the Three Months
Ended March 31,
----------------------------
2009 2008
-------- -------
Revenue:
License fees $ 5,994 $ 9,358
Maintenance and services 8,561 7,534
Hardware 233 425
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Total revenue $ 14,788 $17,317
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Revenue by channel and as a
percent of total revenue:
Direct and other distributors $ 6,555 44% $ 8,535 49%
Toshiba 8,233 56 8,782 51
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Total revenue $ 14,788 100% $17,317 100%
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Revenue by geography:
United States $ 9,684 $13,224
Europe 2,663 2,039
Asia and Pacific 1,348 1,025
Other foreign 1,093 1,029
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Total revenue $ 14,788 $17,317
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Export revenue as a percent of
total revenue: 35% 24%
* Cash and investments as of March 31, 2009 were $144.9 million,
compared to $147.0 million as of December 31, 2008. During the
2009 first quarter, the company repurchased 295,000 shares of its
common stock for $3.2 million under its share repurchase
programs. In March, the company's board of directors approved a
new share repurchase program authorizing up to an additional one
million shares to be repurchased pursuant to a 10b5 plan at
predetermined prices and amounts. As of March 31, 2009, 855,000
shares remained to be purchased under the new plan.
* Operating Expenses Summary:
-- During the 2009 first quarter, the company experienced lower
compensation costs, compared to the same period in 2008,
resulting primarily from its 11 percent workforce reduction in
November 2008. Other cost-control measures also contributed to
decreased expense across all operating expense categories.
-- Sales and marketing expense was $6.0 million for the 2009 first
quarter, compared to $8.1 million for the same period in 2008.
The decrease was due primarily to lower compensation costs and
reduced commissions expense associated with a decrease in sales.
-- Research and development expense was $3.3 million for the 2009
first quarter, compared to $4.3 million for the first quarter of
2008. Lower compensation costs and a reduction in the
utilization of consultants contributed to the expense decrease.
-- General and administrative expense was $3.0 million for the
first quarter of 2009, compared to $3.7 million for the 2008
first quarter, due primarily to lower compensation costs and
other cost-control measures.
2009 Financial Guidance
The company remains confident in strong adjusted EBITDA profitably in 2009. However, due to the difficult economic environment and associated uncertainty in hospital capital spending, and resulting longer sales cycles, the company will no longer provide 2009 financial guidance. The company continues to be focused on positioning for long-term growth when the market improves.
Conference Call and Webcast
Vital Images will host a live webcast of its first quarter earnings conference call, Thursday, May 7, 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. The webcast replay will be available beginning at 2:00 p.m. CT on the same day. If you wish to listen to an audio replay of the conference call, dial (888) 203-1112 and enter conference call ID #9420218. The audio replay will be available beginning at 2:00 p.m. CT on Thursday, May 7, 2009 through 5:00 p.m. CT on Thursday, May 21, 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. Vital Images also has offices in Beijing, China, and Den Haag, the Netherlands. For more information, visit www.vitalimages.com.
The Vital Images, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5843
Non-GAAP Information
Vital Images provides certain non-GAAP information to supplement GAAP information. Adjusted EBITDA (non-GAAP) is defined as earnings before interest, taxes, depreciation, amortization, impairment of patent, equity-based compensation and reduction in workforce charges. Adjusted EBITDA (non-GAAP) excludes certain items that are non-cash in nature and/or items that are affected by market forces that are difficult to predict and may not be within the control of management. Accordingly, management excludes these items from its internal operating forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to the company's board of directors, determining a portion of bonus compensation for executive officers and certain other key employees, and evaluating short-term and long-term operating trends in the company's core operations. Management believes that this presentation facilitates the comparison of the company's current operating results to historical operating results.
Non-GAAP information is not prepared in accordance with GAAP and should not be considered a substitute for or an alternative to GAAP and may not be computed the same as similarly titled measures used by other companies. Management expects to continue to incur expenses similar to the non-GAAP adjustments described above, and the exclusion of these items from its non-GAAP net income should not be construed as an inference that these costs are unusual, infrequent or non-recurring.
The following is a reconciliation from GAAP earnings to adjusted EBITDA:
For the Three Months
Ended March 31,
---------------------
2009 2008
-------- --------
Adjusted EBITDA (in thousands):
Operating loss $ (953) $(2,590)
Equity-based compensation 992 1,232
Depreciation and amortization of
property and equipment 1,285 1,244
Amortization of identified intangibles 156 261
-------- --------
Adjusted EBITDA $ 1,480 $ 147
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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 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 Months
Ended March 31,
----------------------
2009 2008
--------- ---------
Revenue:
License fees $ 5,994 $ 9,358
Maintenance and services 8,561 7,534
Hardware 233 425
--------- ---------
Total revenue 14,788 17,317
Cost of revenue:
License fees 970 1,153
Maintenance and services 2,377 2,572
Hardware 209 195
--------- ---------
Total cost of revenue 3,556 3,920
Gross profit 11,232 13,397
Operating expenses:
Sales and marketing 5,955 8,051
Research and development 3,261 4,285
General and administrative 2,969 3,651
--------- ---------
Total operating expenses 12,185 15,987
Operating loss (953) (2,590)
Interest income 430 1,685
--------- ---------
Loss before income taxes (523) (905)
Income tax benefit (272) (311)
--------- ---------
Net loss $ (251) $ (594)
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Net loss per share - basic $ (0.02) $ (0.03)
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Net loss per share - diluted $ (0.02) $ (0.03)
========= =========
Weighted average common shares
outstanding - basic 14,518 17,075
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Weighted average common shares
outstanding - diluted 14,518 17,075
========= =========
Vital Images, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
March 31, Dec. 31,
2009 2008
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 98,044 $ 109,706
Marketable securities 34,941 37,287
Accounts receivable, net 10,437 13,047
Deferred income taxes 654 654
Prepaid expenses and other current assets 1,856 2,179
---------- ----------
Total current assets 145,932 162,873
Marketable securities 11,934 --
Property and equipment, net 11,240 11,519
Deferred income taxes 14,252 13,904
Other intangible assets, net 652 808
Goodwill 9,089 9,089
---------- ----------
Total assets $ 193,099 $ 198,193
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,024 $ 3,792
Accrued compensation 2,485 2,936
Accrued royalties 600 1,057
Other current liabilities 1,938 1,947
Deferred revenue 16,630 17,724
---------- ----------
Total current liabilities 24,677 27,456
Deferred revenue 1,103 1,164
Deferred rent 780 882
---------- ----------
Total liabilities 26,560 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; 14,440 issued and
outstanding as of March 31, 2009; and
14,673 shares issued and outstanding
as of December 31, 2008 144 147
Additional paid-in capital 166,926 168,738
Accumulated deficit (631) (380)
Accumulated other comprehensive income 100 186
---------- ----------
Total stockholders' equity 166,539 168,691
---------- ----------
Total liabilities and stockholders' equity $ 193,099 $ 198,193
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Vital Images, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
For the Three Months
Ended March 31,
-----------------------
2009 2008
---------- ----------
Cash flows from operating activities:
Net loss $ (251) $ (594)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization of property
and equipment 1,285 1,244
Amortization of identified intangibles 156 261
Provision for doubtful accounts 88 135
Deferred income taxes (300) (311)
Excess tax benefit from stock transactions (58) (66)
Amortization of discount and accretion
of premium on marketable securities 90 (299)
Employee stock-based compensation 992 1,232
Amortization of deferred rent (97) (93)
Changes in operating assets and liabilities:
Accounts receivable 2,522 (439)
Prepaid expenses and other assets 323 5
Accounts payable (1,053) (439)
Accrued expenses and other liabilities (993) 65
Deferred revenue (1,155) 388
---------- ----------
Net cash provided by operating
activities 1,549 1,089
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment (721) (1,300)
Purchases of marketable securities (11,902) (20,609)
Proceeds from maturities of marketable
securities 2,090 16,227
Proceeds from sale of marketable
securities -- 1,581
---------- ----------
Net cash used in investing activities (10,533) (4,101)
---------- ----------
Cash flows from financing activities:
Repurchases of common stock (3,249) --
Proceeds from sale of common stock
under stock plans 513 319
Excess tax benefit from stock
transactions 58 66
---------- ----------
Net cash (used in) provided by
financing activities (2,678) 385
---------- ----------
Net decrease in cash and cash equivalents (11,662) (2,627)
Cash and cash equivalents, beginning of
period 109,706 146,685
---------- ----------
Cash and cash equivalents, end of period $ 98,044 $ 144,058
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