(Source: PrimeNewswire)
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.
