Vasomedical cuts expenditures to preserve shrinking cash balances

By Lisa Kerner

Charlotte, N.C., Oct. 16 - Vasomedical, Inc. said it had cash, cash equivalents and certificates of deposit balances of about $1.8 million for the first quarter of fiscal 2007 ended Aug. 31, compared with roughly $2.4 million at May 31.

The company attributed the decrease in cash, cash equivalents and certificates of deposit balances primarily to $510,479 used for operating activities and $84,448 used for financing activities.

Working capital decreased to $2.3 million at Aug. 31 from $2.9 million at May 31.

Vasomedical reported first-quarter fiscal 2007 revenues of $2.1 million, down from $3.5 million for the first quarter of fiscal 2006.

The company recorded a net loss of $539,000, or $0.01 per share, for the first quarter, compared with a loss of $1.7 million, or $0.03 per share, for the prior-year period.

The company said its main product, EECP therapy for the treatment of ischemic heart disease, continues to face "significant challenges" obtaining broader adoption due in large part to reimbursement policies that limit the patient population and restrict availability of the therapy.

"We are continuing efforts to preserve cash, we have reduced expenditures in areas including clinical research, product development, as well as sales and marketing, and we are continuing to restructure our costs to be better aligned with potential near-term sales," president and chief executive officer Thomas Glover said in a news release.

"These cuts, while necessary, have restricted our ability to advance the adoption of EECP therapy in the medical market place." Glover emphasized, however, that the company remains committed to working with physicians to obtain a broader understanding of the therapy's benefits and with the Centers for Medicare & Medicaid Services to expand reimbursement coverage.

Vasomedical is a medical device company based in Westbury, N.Y.

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