SOURCE: VERSUS TECHNOLOGY, INC.

Versus, RTLS, healthcare, healthIT

March 21, 2011 11:50 ET

Versus Technology Announces First Quarter Results

TRAVERSE CITY, MI--(Marketwire - March 21, 2011) - Versus Technology, Inc. (PINKSHEETS: VSTI) ("Versus" or the "Company") announced revenues of $1,153,000 for the fiscal quarter ended January 31, 2011, a 35.7% decline over revenues of $1,793,000 for the same period in 2010.

As was the case in the first quarter of fiscal 2011, Versus' quarterly revenues can vary significantly depending upon the timing of delivery of major customer projects. Accordingly, the revenues reported in any one quarter are not necessarily indicative of what full year results will be.

Gross profits as a percentage of revenues were 67.0% for the quarter compared to 68.0% for the same period in 2010. Operating expenses, excluding cost of revenues, exceeded prior year by $224,000, or 20.1%, primarily due to additional sales staff hired in the fourth quarter of fiscal 2010.

Versus reported a pre-tax loss of $562,000 for the quarter, compared to pre-tax net income of $105,000 for the same period in 2010.

For additional information, please refer to the unaudited consolidated financial statements below.

About Versus Technology, Inc.

Established in 1988, Versus Technology, Inc. specializes in real-time location systems (RTLS) for healthcare. Used for enterprise patient tracking, bed management, asset tracking, and nurse call automation, Versus Advantages™ improves patient flow and documentation of caregiver and patient interactions, while enhancing communication and efficiency. Exclusively endorsed by the American Hospital Association, the Versus Advantages infrared (IR) and Active RFID solution is responsible for clinical-grade location and automation at a number of hospitals, clinics and long-term care facilities throughout North America. To learn more about Versus Technology, Inc. (PINKSHEETS: VSTI), our technology and client successes, visit www.versustech.com and take the Advantages Tour.

Safe Harbor Provision

This document may contain forward-looking statements relating to future events, such as the development of new products, the commencement of production, or the future financial performance of the Company. These statements fall within the meaning of forward-looking information as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of important risks and uncertainties that could cause actual results to differ materially including, but not limited to, economic, competitive, governmental, and technological factors affecting the Company's markets and market growth rates, products and their rate of commercialization, services, prices and adequacy of financing, and other factors. The Company undertakes no obligation to update, amend, or clarify forward-looking statements, whether because of new information, future events, or otherwise.

REPORT OF MANAGEMENT

The accompanying consolidated balance sheets of Versus Technology, Inc. and Subsidiary as of January 31, 2011, and October 31, 2010, and the related consolidated statements of income and cash flows for the three-month periods ended January 31, 2011 and 2010, have been prepared by management.

Management has elected to omit the statement of shareholders' equity and substantially all of the footnote disclosures required by accounting principles generally accepted in the United States. If the omitted statement and disclosures were included in the financial statements, they might influence the user's conclusions about the Company's financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

The reader should refer to the Versus Technology, Inc. 2010 Annual Report for further details regarding the Company's financial position at October 31, 2010.

                                                    Joseph E. Winowiecki
                                                    Chief Financial Officer

March 18, 2011




                  VERSUS TECHNOLOGY, INC. AND SUBSIDIARY
                        Consolidated Balance Sheets
                                (Unaudited)

                                                ---------------------------
                                                  31-Jan-11     31-Oct-10
                                                ------------- -------------
Assets
Current assets
   Cash and cash equivalents                    $   1,410,000 $   2,083,000
   Accounts receivable                              1,171,000     1,467,000
   Inventories                                      1,017,000       836,000
   Prepaid expenses and other current assets          243,000       161,000
                                                ------------- -------------

Total current assets                                3,841,000     4,547,000
                                                ------------- -------------

Property and equipment
   Machinery and equipment                            453,000       450,000
   Furniture and fixtures                             118,000       108,000
   Leasehold improvements                             429,000       429,000
                                                ------------- -------------

                                                    1,000,000       987,000
   Less accumulated depreciation                      725,000       707,000
                                                ------------- -------------

Net property and equipment                            275,000       280,000

Goodwill                                            1,533,000     1,533,000

Other intangible assets, net                          135,000       138,000

Other noncurrent assets                                10,000        10,000
                                                ------------- -------------

Total assets                                    $   5,794,000 $   6,508,000
                                                ============= =============

See accompanying report of management.





                  VERSUS TECHNOLOGY, INC. AND SUBSIDIARY
                        Consolidated Balance Sheets
                                (Unaudited)

                                                --------------------------
                                                  31-Jan-11     31-Oct-10
                                                ------------  ------------
Liabilities and shareholders' equity

Current Liabilities
   Accounts payable                             $    521,000  $    543,000
   Accrued expenses                                  258,000       407,000
   Deferred revenue from customer advance
    payments                                         357,000       371,000
                                                ------------  ------------

Total liabilities (all current)                    1,136,000     1,321,000
                                                ------------  ------------

Shareholders' equity
   Common stock $0.01 par value; 120,000,000
    shares authorized; 101,608,325 issued and
    outstanding                                    1,016,000     1,016,000
   Additional paid-in capital                     43,161,000    43,128,000
   Accumulated deficit                           (39,519,000)  (38,957,000)
                                                ------------  ------------

Total shareholders' equity                         4,658,000     5,187,000
                                                ------------  ------------

Total liabilities and shareholders' equity      $  5,794,000  $  6,508,000
                                                ============  ============


See accompanying report of management.




                  VERSUS TECHNOLOGY, INC. AND SUBSIDIARY
                    Consolidated Statements of Income
                                (Unaudited)

                                                    Three Months Ended
                                                        January 31,
                                                    2011          2010
                                                ------------  -------------
Revenues                                        $  1,153,000  $   1,793,000

Operating Expenses
   Cost of revenues                                  380,000        574,000
   Research and development                          199,000        175,000
   Sales and marketing                               905,000        698,000
   General and administrative                        234,000        241,000
                                                ------------  -------------

Total Operating Expenses                           1,718,000      1,688,000

Income From Operations                              (565,000)       105,000
                                                ------------  -------------

Other Income (Expense)
   Interest income                                     3,000          2,000
   Net foreign currency
    transaction gain (loss)                                -          2,000
                                                ------------  -------------

Total Other Income (Expense)                           3,000              -
                                                ------------  -------------

Net Income (Loss)                               $   (562,000) $     105,000
                                                ============  =============

Basic and Diluted Net
Income Per Share                                $    (0.0055) $      0.0010
                                                ============  =============



See accompanying report of management.



                  VERSUS TECHNOLOGY, INC. AND SUBSIDIARY
                  Consolidated Statements of Cash Flows
                                (Unaudited)

                                                    Three Months Ended
                                                        January 31,
                                                    2011          2010
                                                ------------  ------------
Cash flows from Operating Activities
   Net (loss) income                            $   (562,000) $    105,000
   Adjustments to reconcile net (loss) income
    to net cash used in operating activities:
     Depreciation                                     18,000        16,000
     Amortization                                      3,000         1,000
     Non-cash equity based compensation               33,000        30,000
   Changes in operating assets and liabilities:
     Accounts receivable                             296,000       (68,000)
     Inventories                                    (181,000)       83,000
     Prepaid expenses and other current assets       (82,000)       50,000
     Accounts payable                                (22,000)     (156,000)
     Accrued expenses                               (149,000)      (90,000)
     Deferred revenues                               (14,000)      (65,000)
                                                ------------  ------------ 

Net cash used in operating activities               (660,000)      (94,000)
                                                ------------  ------------

Cash flows from investing activities
   Additions to property and equipment               (13,000)       (9,000)
   Increase in other noncurrent assets                     -       (16,000)
                                                ------------  ------------

Net cash used in investing activities                (13,000)      (25,000)
                                                ------------  ------------

Cash flows from financing activities
   Issuance of common stock                                -       129,000
                                                ------------  ------------

Net cash provided by financing activities                  -       129,000
                                                ------------  ------------

Net (Decrease) Increase in Cash and Cash
 Equivalents                                        (673,000)       10,000

Cash and Cash Equivalents, at the beginning
 of the period                                     2,083,000     1,301,000
                                                ------------  ------------

Cash and Cash Equivalents, at the end of
 the period                                     $  1,410,000  $  1,311,000
                                                ============  ============


See accompanying report of management.

Contact Information

  • Investors/Analysts contact:
    Joseph E. Winowiecki
    Chief Financial Officer

    Media contact:
    Stephanie Bertschy
    Director of Marketing
    Versus Technology, Inc.
    (231) 946-5868