SOURCE: VERSUS TECHNOLOGY, INC.

Versus Technology, Inc.

May 31, 2011 10:45 ET

Versus Technology Announces Second Quarter Results

TRAVERSE CITY, MI--(Marketwire - May 31, 2011) - Versus Technology, Inc. ("Versus" or the "Company") (PINKSHEETS: VSTI) announced revenues of $1,311,000 for its second fiscal quarter ended April 30, 2011, a 47.8% decrease compared to revenues of $2,513,000 for the same quarter of the prior year. Revenues for the six months ended April 30, 2011, were $2,464,000, compared to $4,306,000 for the six months ended April 30, 2010, a 42.8% decrease.

As was the case in the second fiscal quarter of 2010, Versus' quarterly revenues can vary significantly depending on the timing and delivery of major customer projects. Accordingly, 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 70.8% for the current year's second quarter compared to 76.8% for the same quarter of the prior year. Fiscal 2011 year-to-date gross profit as a percentage of revenues is 69.0% compared to 73.1% year-to-date in fiscal 2010.

As a result of lower revenues year-to-date, management implemented cost-cutting measures resulting in operating expenses, other than cost of revenues, which were 17.9% below prior year in the second quarter and 2.5% below prior fiscal year-to-date.

Versus reported a net loss of $405,000 for the second quarter of fiscal 2011 compared to net income of $312,000 for the same quarter of the prior year. The Company reported net loss of $967,000 for the six months ended April 30, 2011, compared to net income of $416,000 for the six months ended April 30, 2010.

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

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 April 30, 2011, and October 31, 2010, and the related consolidated statements of income and cash flows for the six-month periods ended April 30, 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

May 31, 2011


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


                                                     30-Apr-11   31-Oct-10
                                                    ----------- -----------
Assets
Current assets
  Cash and cash equivalents                         $ 1,115,000 $ 2,083,000
  Accounts receivable                                 1,002,000   1,467,000
  Inventories                                           966,000     836,000
  Prepaid expenses and other current assets             198,000     161,000
                                                    ----------- -----------

Total current assets                                  3,281,000   4,547,000
                                                    ----------- -----------

Property and equipment
  Machinery and equipment                               606,000     450,000
  Furniture and fixtures                                135,000     108,000
  Leasehold improvements                                429,000     429,000
                                                    ----------- -----------

                                                      1,170,000     987,000
  Less accumulated depreciation                         742,000     707,000
                                                    ----------- -----------

Net property and equipment                              428,000     280,000

Goodwill and other intangible assets                  1,533,000   1,533,000

Other intangible assets, net                            134,000     138,000

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

Total assets                                        $ 5,386,000 $ 6,508,000
                                                    =========== ===========

See accompanying report of management.




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


                                                   30-Apr-11    31-Oct-10
                                                  -----------  -----------
Liabilities and shareholders' equity

Current Liabilities
  Accounts payable                                $   467,000  $   543,000
  Accrued expenses                                    327,000      407,000
  Deferred revenue from customer advance
   payments                                           305,000      371,000
                                                  -----------  -----------

Total liabilities (all current)                     1,099,000    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                       43,195,000   43,128,000
  Accumulated deficit                             (39,924,000) (38,957,000)
                                                  -----------  -----------

Total shareholders' equity                          4,287,000    5,187,000
                                                  -----------  -----------

Total liabilities and shareholders' equity        $ 5,386,000  $ 6,508,000
                                                  ===========  ===========

See accompanying report of management.




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

                          Three months ended       Six months ended
                             April 30,                April 30,
                         2011         2010          2011          2010
                    ------------  ------------  ------------  ------------

Revenues            $  1,311,000 $  2,513,000   $  2,464,000  $  4,306,000
                    ------------  ------------  ------------  ------------

Operating Expenses
  Cost of revenues       383,000       583,000       763,000     1,157,000
  Research and
   development           236,000       216,000       435,000       391,000
  Sales and
   marketing             884,000       812,000     1,789,000     1,500,000
  General and
   administrative        215,000       598,000       449,000       850,000
                    ------------  ------------  ------------  ------------

Total Operating
 Expenses              1,718,000     2,209,000     3,436,000     3,898,000
                    ------------  ------------  ------------  ------------

Income (Loss) From
 Operations             (407,000)     (304,000)     (972,000)     (408,000)
                    ------------  ------------  ------------  ------------

Other Income
 (Expense)
   Interest income         2,000        2,000          5,000         4,000
   Net foreign
    currency
    transaction
    gain (loss)                -        6,000             -          4,000
                    ------------  ------------  ------------  ------------

Total Other Income,
 Net                       2,000        8,000          5,000         8,000
                    ------------  ------------  ------------  ------------

Net Income (Loss)   $   (405,000) $    312,000  $   (967,000) $    416,000
                    ============  ============  ============  ============

Basic and Diluted
 Net Income (Loss)
  Per Share         $          -  $          -  $          -  $          -
                    ============  ============  ============  ============

See accompanying report of management.




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

                                                      Six Months Ended
                                                          April 30,
                                                      2011         2010
                                                  -----------  -----------
Cash flows from Operating Activities
  Net (loss) income                               $  (967,000) $   416,000
  Adjustments to reconcile net (loss) income to
   net cash provided by (used in) operating
   activities:
    Depreciation                                       41,000       33,000
    Amortization                                        5,000        2,000
    Non-cash equity based compensation                 67,000       84,000
  Changes in operating assets and liabilities:
    Accounts receivable                               465,000     (208,000)
    Inventories                                      (130,000)     120,000
    Prepaid expenses and other current assets         (37,000)      51,000
    Accounts payable                                  (76,000)     201,000
    Accrued expenses                                  (80,000)      73,000
    Deferred revenues                                 (66,000)     (99,000)
                                                  -----------  -----------

Net cash provided by (used in) operating
 activities                                          (778,000)     673,000
                                                  -----------  -----------

Cash used in investing activities
  Additions to property and equipment                (190,000)     (34,000)
  Increase in other noncurrent assets                       -      (16,000)
                                                  -----------  -----------

Net cash used in investing activities                (190,000)     (50,000)
                                                  -----------  -----------

Cash flows from financing activities
  Issuance of common stock                                  -      274,000
                                                  -----------  -----------

Net cash (used in) provided by financing
 activities                                                 -      274,000
                                                  -----------  -----------

Net Increase (Decrease) in Cash and Cash
 Equivalents                                         (968,000)     897,000

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                                       $ 1,115,000  $ 2,198,000
                                                  ===========  ===========

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