MINNEAPOLIS, Aug. 4, 2010 (GLOBE NEWSWIRE) -- Vital Images, Inc. (Nasdaq:VTAL),a leading provider of advanced visualization and analysis software, today reported financial results for the second quarter ended June 30, 2010.
Second quarter revenue was $14.0 million, compared to $13.4 million for the second quarter of 2009. Second quarter net loss was $1.6 million, or $(0.11) per diluted share, compared to a net loss of $19.6 million, or $(1.37) per diluted share, which included $18.1 million of non-cash charges representing $(1.27) per diluted share, for the second quarter of 2009.
Second quarter adjusted EBITDA (a non-GAAP measure) was $(212,000), compared to $520,000 for the second quarter of 2009. The company's total cash and investments were $143.1 million as of June 30, 2010, compared to $143.0 million as of March 31, 2010.
"We are pleased with our year-over-year growth on the top-line," said Michael H. Carrel, Vital Images president and chief executive officer. "While the CT market remains challenging and clearly impacted our results, we are beginning to see increased revenue from enterprise sales. Additionally, with each software release, including Vitrea Enterprise Suite 1.3 during the second quarter, we reinforce our technology leadership position in the marketplace."
"We are confident our cost management, strategic position and calculated investments will enable us to succeed in the market long-term." Carrel continued, "As a result, our board of directors approved an additional stock buyback of up to $20.0 million, on top of the 566,000 shares remaining to be purchased under the previously approved plan as of June 30, 2010. As of the end of the second quarter, we had purchased 3.3 million shares for $44.6 million since 2008."
Conference Call and Webcast
Vital Images will host a live webcast of its second quarter earnings conference call on Thursday, August 5, 2010 at 10:30 a.m. CT. The webcast can be accessed on the Vital Images website at www.vitalimages.com. An audio replay of the conference call will be available beginning at 2:00 p.m. CT on Thursday, August 5, 2010 through 5:00 p.m. CT on Thursday, August 19, 2010 by calling (888) 203-1112 and entering passcode 8046562.
About Vital Images
Vital Images, Inc. is a leading provider of advanced visualization and analysis software for physicians and healthcare specialists. The company's software provides users productivity and communication tools to improve patient care that can be accessed throughout the enterprise anytime, anywhere via the Web. Established in 1988 and headquartered in Minneapolis, Vital Images also has offices in Europe and Asia. For more information, visit www.vitalimages.com.
Vital Images® and Vitrea® are registered trademarks of Vital Images, Inc. Vital Images disclaims any proprietary interest in the marks and names of others.
The Vital Images, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5843
Non-GAAP Information
To supplement the company's condensed consolidated financial statements presented on a GAAP basis, the company uses adjusted EBITDA (a non-GAAP measure), which excludes certain items presented under GAAP. The company uses adjusted EBITDA to develop budgets, to assess its operating performance, to increase comparability among different periods and to serve as a measurement for incentive compensation. The company uses adjusted EBITDA even though it is not probable that the financial impact of excluded amounts will be immaterial in the future. Additionally, amounts excluded from adjusted EBITDA are managed by and are the responsibility of the company's management. The company believes that adjusted EBITDA is useful to investors because it provides supplemental information that allows investors to review the company's results of operations from the same perspective as management and the company's board of directors.
The method the company uses to produce non-GAAP measures is not in accordance with GAAP and may not be computed the same as similarly titled measures used by other companies. These non-GAAP results should not be considered in isolation or regarded as a substitute for corresponding GAAP measures but instead should be utilized as a supplemental measure of operating performance in evaluating the company's business. Non-GAAP measures do have limitations in that they do not reflect certain items that may have a material impact upon the company's reported financial results. As such, these non-GAAP measures should be viewed in conjunction with both the company's financial statements prepared in accordance with GAAP and the reconciliation of the supplemental non-GAAP financial measures to the comparable GAAP measures.
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, 2009. 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, Inc. | ||||
| Condensed Consolidated Statements of Operations | ||||
| (In thousands, except per share amounts) | ||||
| (Unaudited) | ||||
| For the Three Months Ended | For the Six Months Ended | |||
| June 30, | June 30, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Revenue: | ||||
| License fees | $ 5,162 | $ 4,565 | $ 10,683 | $ 10,559 |
| Maintenance and services | 8,165 | 8,371 | 16,969 | 16,932 |
| Hardware | 647 | 439 | 1,081 | 672 |
| Total revenue | 13,974 | 13,375 | 28,733 | 28,163 |
| Cost of revenue: | ||||
| License fees | 1,055 | 558 | 1,972 | 1,528 |
| Maintenance and services | 2,549 | 2,268 | 4,896 | 4,645 |
| Hardware | 667 | 424 | 1,107 | 633 |
| Total cost of revenue | 4,271 | 3,250 | 7,975 | 6,806 |
| Gross profit | 9,703 | 10,125 | 20,758 | 21,357 |
| Operating expenses: | ||||
| Sales and marketing | 5,151 | 5,487 | 10,630 | 10,927 |
| Research and development | 4,095 | 3,953 | 8,125 | 7,955 |
| General and administrative | 2,212 | 2,497 | 4,934 | 5,240 |
| Asset impairment | -- | 3,147 | -- | 3,147 |
| Total operating expenses | 11,458 | 15,084 | 23,689 | 27,269 |
| Operating loss | (1,755) | (4,959) | (2,931) | (5,912) |
| Interest income | 130 | 330 | 238 | 760 |
| Loss before income taxes | (1,625) | (4,629) | (2,693) | (5,152) |
| Provision .for income taxes | 21 | 14,992 | 45 | 14,720 |
| Net loss | $ (1,646) | $ (19,621) | $ (2,738) | $ (19,872) |
| Net loss per share – basic and diluted | $ (0.11) | $ (1.37) | $ (0.19) | $ (1.38) |
| Weighted average common shares outstanding – basic and diluted | 14,419 | 14,288 | 14,376 | 14,402 |
| Vital Images, Inc. | ||||
| Condensed Consolidated Balance Sheets | ||||
| (In thousands, except per share amounts) | ||||
| (Unaudited) | ||||
| June 30, | December 31, | |||
| 2010 | 2009 | |||
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ 100,757 | $ 120,317 | ||
| Marketable securities | 16,347 | 9,673 | ||
| Accounts receivable, net | 12,144 | 12,196 | ||
| Prepaid expenses and other current assets | 2,516 | 2,686 | ||
| Total current assets | 131,764 | 144,872 | ||
| Marketable securities | 25,969 | 12,234 | ||
| Property and equipment, net | 4,663 | 5,485 | ||
| Other intangible assets, net | 202 | 382 | ||
| Goodwill | 9,089 | 9,089 | ||
| Total assets | $ 171,687 | $ 172,062 | ||
| Liabilities and Stockholders' Equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ 2,906 | $ 2,588 | ||
| Accrued compensation | 2,131 | 3,574 | ||
| Accrued royalties | 804 | 812 | ||
| Other current liabilities | 1,434 | 1,364 | ||
| Deferred revenue | 15,936 | 15,500 | ||
| Total current liabilities | 23,211 | 23,838 | ||
| Deferred revenue | 921 | 1,033 | ||
| Deferred rent | 253 | 469 | ||
| Total liabilities | 24,385 | 25,340 | ||
| 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; 14,451 issued and outstanding | ||||
| as of June 30, 2010; and 14,330 shares issued and outstanding as of December 31, 2009 | 145 | 143 | ||
| Additional paid-in capital | 171,330 | 168,058 | ||
| Accumulated deficit | (24,370) | (21,632) | ||
| Accumulated other comprehensive income | 197 | 153 | ||
| Total stockholders' equity | 147,302 | 146,722 | ||
| Total liabilities and stockholders' equity | $ 171,687 | $ 172,062 | ||
| Vital Images, Inc. | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (In thousands) | ||
| (Unaudited) | ||
| For the Six Months Ended | ||
| June 30, | ||
| 2010 | 2009 | |
| Cash flows from operating activities: | ||
| Net loss | $ (2,738) | $ (19,872) |
| Adjustments to reconcile net loss to net cash provided | ||
| by operating activities: | ||
| Depreciation and amortization of property and equipment | 1,741 | 2,545 |
| Amortization of identified intangibles | 180 | 246 |
| Asset impairment | -- | 3,147 |
| Provision for doubtful accounts | 66 | 88 |
| Deferred income taxes | -- | 14,664 |
| Amortization of discount and accretion of premium on marketable securities | 4 | 190 |
| Employee stock-based compensation | 2,126 | 1,974 |
| Amortization of deferred rent | (206) | (196) |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (14) | 1,590 |
| Prepaid expenses and other assets | 170 | 248 |
| Accounts payable | 219 | (1,207) |
| Accrued expenses and other liabilities | (1,414) | (576) |
| Deferred revenue | 324 | (1,910) |
| Net cash provided by operating activities | 458 | 931 |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (820) | (1,645) |
| Purchases of marketable securities | (25,369) | (16,774) |
| Proceeds from maturities of marketable securities | 5,000 | 22,725 |
| Net cash (used in) provided by investing activities | (21,189) | 4,306 |
| Cash flows from financing activities: | ||
| Repurchases of common stock | (277) | (5,757) |
| Proceeds from sale of common stock under stock plans | 1,642 | 920 |
| Payment for employee stock options tendered | (194) | -- |
| Net cash provided by (used in) financing activities | 1,171 | (4,837) |
| Net (decrease) increase in cash and cash equivalents | (19,560) | 400 |
| Cash and cash equivalents, beginning of period | 120,317 | 109,706 |
| Cash and cash equivalents, end of period | $ 100,757 | $ 110,106 |
| Vital Images, Inc. | ||||||||
| Supplemental Financial Information | ||||||||
| Revenue Summary (dollars in thousands): | ||||||||
|
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||
| 2010 | 2009 | 2010 | 2009 | |||||
| Revenue: | ||||||||
| License fees | $ 5,162 | $ 4,565 | $ 10,683 | $ 10,559 | ||||
| Maintenance and services | 8,165 | 8,371 | 16,969 | 16,932 | ||||
| Hardware | 647 | 439 | 1,081 | 672 | ||||
| Total revenue | $ 13,974 | $ 13,375 | $ 28,733 | $ 28,163 | ||||
|
Revenue by channel and as a percent of total revenue: |
||||||||
| Direct and other distributors | $ 7,389 | 53% | $ 5,826 | 44% | $ 13,928 | 48% | $ 12,381 | 44% |
| Toshiba | 6,585 | 47 | 7,549 | 56 | 14,805 | 52 | 15,782 | 56 |
| Total revenue | $ 13,974 | 100% | $ 13,375 | 100% | $ 28,733 | 100% | $ 28,163 | 100% |
|
License fee revenue by channel and as a percent of total license fee revenue: |
||||||||
| Direct and other distributors | $ 1,573 | 30% | $ 345 | 8% | $ 2,573 | 24% | $ 1,705 | 16% |
| Toshiba | 3,589 | 70 | 4,220 | 92 | 8,110 | 76 | 8,854 | 84 |
| Total license fee revenue | $ 5,162 | 100% | $ 4,565 | 100% | $ 10,683 | 100% | $ 10,559 | 100% |
|
Maintenance and services revenue by channel and as a percent of total maintenance and services revenue: |
||||||||
| Direct and other distributors | $ 5,288 | 65% | $ 5,219 | 62% | $ 10,432 | 61% | $ 10,287 | 61% |
| Toshiba | 2,877 | 35 | 3,152 | 38 | 6,537 | 39 | 6,645 | 39 |
| Total maintenance and services revenue | $ 8,165 | 100% | $ 8,371 | 100% | $ 16,969 | 100% | $ 16,932 | 100% |
| Revenue by geography: | ||||||||
| United States | $ 9,313 | $ 8,995 | $ 18,957 | $ 18,679 | ||||
| Europe | 2,709 | 2,352 | 5,390 | 5,015 | ||||
| Asia and Pacific | 1,182 | 795 | 2,786 | 2,143 | ||||
| Other foreign | 770 | 1,233 | 1,600 | 2,326 | ||||
| Total revenue | $ 13,974 | $ 13,375 | $ 28,733 | $ 28,163 | ||||
|
Export revenue as a percent of total revenue: |
33% | 33% | 34% | 34% | ||||
| Reconciliation from GAAP results to adjusted EBITDA (in thousands): | ||||
| For the Three Months Ended | For the Six Months Ended | |||
| June 30, | June 30, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Adjusted EBITDA (in thousands): | ||||
| Operating loss | $ (1,755) | $ (4,959) | $ (2,931) | $ (5,912) |
| Equity-based compensation | 639 | 982 | 2,126 | 1,974 |
| Depreciation and amortization of property and equipment | 814 | 1,260 | 1,741 | 2,545 |
| Amortization of identified intangibles | 90 | 90 | 180 | 246 |
| Asset impairment | -- | 3,147 | -- | 3,147 |
| Adjusted EBITDA | $ (212) | $ 520 | $ 1,116 | $ 2,000 |