Vital Images Inc. (NSDQ:VTAL) posted fourth-quarter sales of $6.6 million for the three months ended Dec. 31, 2009, down 18.8 percent compared with $8.1 million during the same period in 2008. Net losses widened 63.2 percent to $630,000, compared with $386,000 during Q4 2008:
Vital Images Announces 2009 Fourth Quarter Sequential Revenue Growth and Full-Year Results
MINNEAPOLIS, Feb. 17, 2010 (GLOBE NEWSWIRE) — Vital Images, Inc. (Nasdaq:VTAL), a leading provider of advanced visualization and analysis solutions, today reported financial results for the fourth quarter ended December 31, 2009. Fourth quarter revenue was $15.8 million, compared to $17.4 million for the fourth quarter of 2008. For full-year 2009, revenue was $58.2 million, compared to $68.1 million in 2008.
Fourth quarter net loss was $630,000, or $(0.04) per diluted share, compared to a net loss of $386,000, or $(0.03) per diluted share, for the fourth quarter of 2008. For full-year 2009, net loss was $21.3 million, or $(1.48) per diluted share, which included $18.1 million of non-cash charges in the second quarter representing $(1.27) per diluted share, compared to a net loss of $2.8 million, or $(0.17) per diluted share, in 2008.
Fourth quarter adjusted EBITDA (a non-GAAP measure) was $1.0 million, compared to $1.2 million for the fourth quarter of 2008. For full-year 2009, adjusted EBITDA was $4.3 million, compared to $1.8 million in 2008.
The company’s total cash and investments were $142.2 million as of December 31, 2009, compared to $140.3 million as of September 30, 2009.
Michael H. Carrel, Vital Images president and chief executive officer, said, “The fourth quarter was our second quarter of sequential revenue growth, and we are cautiously optimistic that our markets are improving. During the quarter, we grew our enterprise customer base, delivered and deployed significant product enhancements both clinically and for the enterprise, and established a strategic partnership with Medtronic whereby they will use our software as part of their new 3D Recon service for endovascular treatment of aortic aneurysms.”
Carrel continued, “In 2010, we will continue our strategic investments in research and development, services, and diversifying our revenue base, as we plan for revenue growth and improved profitability.”
Cash Tender Offer for Employee Stock Options
In an effort to reduce stock option overhang, the company also announced that its board of directors approved a cash tender offer for certain employee stock options. The tender offer is planned to commence soon and expire, unless otherwise extended by the company in its sole discretion, 20 business days after its commencement. The tender offer applies to outstanding stock options held by employees with an exercise price equal to or greater than $25.00 per share. The price to be offered for each eligible stock option is expected to be a discount to its Black-Scholes fair value. The company’s management may participate in this offer, but members of the company’s board of directors may not. As of February 16, 2010, there were approximately 406,000 eligible options. If all eligible options are tendered and accepted in the offer, the aggregate cash purchase price would be approximately $225,000 as of today.
As a result of the tender offer, the company will incur an equity-based compensation charge of up to $760,000, consisting of the remaining unamortized equity-based compensation expense associated with the eligible options tendered in the offer. This charge would be reflected in the financial results of the fiscal quarter in which the offer is completed, currently anticipated to be the first quarter of 2010.
The tender offer is subject to a number of other terms and conditions that will be set forth in the offering documents. Neither the company’s management nor its board of directors makes any recommendation in connection with the tender offer.
Important Statement Regarding Proposed Tender Offer
The tender offer for certain company employee stock options described above has not commenced. When the tender offer begins, the company will provide option holders who are eligible to participate with written materials explaining the precise terms and timing of the tender offer. Persons who are eligible to participate in the tender offer should read these written materials carefully when they become available because they will contain important information about the offer. The company will also file these written materials with the Securities and Exchange Commission as part of a tender offer statement upon commencement of the tender offer. The company’s option holders will be able to obtain these written materials and other documents filed by the company with the Securities and Exchange Commission free of charge at www.sec.gov. In addition, the company’s option holders may obtain free copies of the tender offer documents, when available, by contacting Vital Images by email at firstname.lastname@example.org or telephone at 952-487-9500.
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.