SOURCE: VERSUS TECHNOLOGY, INC.

Versus Advantages, RTLS, healthIT, Real-time Locating, Patient Flow, Asset Tracking

August 31, 2010 10:22 ET

Versus Technology Announces Third Quarter Results

TRAVERSE CITY, MI--(Marketwire - August 31, 2010) - Versus Technology, Inc. (PINKSHEETS: VSTI) ("Versus" or the "Company") announced revenues of $1,797,000 for its third fiscal quarter ended July 31, 2010, a 55.5% increase compared to revenues of $1,155,000 for the same quarter of the prior year. Revenues for the nine months ended July 31, 2010 were $6,103,000, compared to $3,905,000 for the nine months ended July 31, 2009, a 56.3% increase.

This represents the fourth consecutive quarter of growth over the same quarter of the prior year which is attributable to growth in the Company's healthcare solutions and service business. 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 70.3% for the current year's third quarter compared to 69.4% for the same quarter of the prior year. Fiscal 2010 year-to-date gross profit as a percentage of revenues is 72.3% compared to 70.6% year-to-date in fiscal 2009.

Operating expenses, other than cost of revenues, increased 5.4% and 13.5% for the current year's third quarter and fiscal year-to-date, respectively, compared to the same period of the prior year. The increase in operating expenses is due to increased research and development expenses, and related one-time professional fees.

Versus reported its fourth consecutive profitable quarter, posting net income of $38,000 for the third quarter of fiscal 2010 compared to a net loss of $360,000 for the same quarter of the prior year. The Company reported net income of $450,000 for the nine months ended July 31, 2010, compared to a net loss of $731,000 for the nine months ended July 31, 2009.

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 worldwide. 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 July 31, 2010, and October 31, 2009, and the related consolidated statements of operations and cash flows for the nine-month period ended July 31, 2010 and 2009, 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. 2009 Annual Report which is available upon request for further details regarding the Company's financial position at October 31, 2009.

Joseph E. Winowiecki
Chief Financial Officer




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

                                                  -------------------------
                                                   31-Jul-10    31-Oct-09
                                                  ------------ ------------
Assets
Current assets
   Cash and cash equivalents                      $  2,284,000 $  1,301,000
   Accounts receivable                               1,287,000    1,322,000
   Inventories                                         593,000      669,000
   Prepaid expenses and other current assets           170,000      176,000
                                                  ------------ ------------

Total current assets                                 4,334,000    3,468,000
                                                  ------------ ------------

Property and equipment
   Machinery and equipment                             444,000      429,000
   Furniture and fixtures                              106,000      100,000
   Leasehold improvements                              428,000      421,000
                                                  ------------ ------------

                                                       978,000      950,000
   Less accumulated depreciation                       688,000      657,000
                                                  ------------ ------------

Net property and equipment                             290,000      293,000

Goodwill and other intangible assets                 1,667,000    1,533,000

Other noncurrent assets                                  9,000       57,000
                                                  ------------ ------------

Total assets                                      $  6,300,000 $  5,351,000
                                                  ============ ============



See accompanying report of management.




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

                                                  ------------------------
                                                   31-Jul-10    31-Oct-09
                                                  -----------  -----------
Liabilities and shareholders' equity

Current Liabilities
   Accounts payable                               $   567,000  $   455,000
   Accrued expenses                                   441,000      366,000
   Deferred revenue                                   307,000      409,000
                                                  -----------  -----------

Total liabilities (all current)                     1,315,000    1,230,000
                                                  -----------  -----------

Shareholders' equity
   Common stock $0.01 par value; 120,000,000
    shares authorized; 98,274,325 and
    95,325,325 issued and outstanding               1,016,000      953,000
   Additional paid-in capital                      43,150,000   42,800,000
   Accumulated deficit                            (39,181,000) (39,632,000)
                                                  -----------  -----------

Total shareholders' equity                          4,985,000    4,121,000
                                                  -----------  -----------

Total liabilities and shareholders' equity        $ 6,300,000  $ 5,351,000
                                                  ===========  ===========



See accompanying report of management.



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


                            Three Months Ended       Nine Months Ended
                                 July 31,                 July 31,
                            2010         2009         2010        2009
                        ------------ -----------  ------------ -----------

Revenues                $  1,797,000 $ 1,155,000  $  6,103,000 $ 3,905,000

Operating Expenses
   Cost of revenues          534,000     353,000     1,691,000   1,150,000
   Research and
    development              266,000     172,000       657,000     502,000
   Sales and marketing       733,000     735,000     2,233,000   2,326,000
   General and
    administrative           230,000     259,000     1,080,000     670,000
                        ------------ -----------  ------------ -----------

Total Operating Expenses   1,763,000   1,519,000     5,661,000   4,648,000

Income (Loss) From
 Operations                   34,000    (364,000)      442,000    (743,000)
                        ------------ -----------  ------------ -----------

Other Income (Expense)
   Interest income             4,000       4,000         8,000      12,000
                        ------------ -----------  ------------ -----------

Total Other Income
 (Expense)                     4,000       4,000         8,000      12,000
                        ------------ -----------  ------------ -----------

Net Income (Loss)       $     38,000 $  (360,000) $    450,000 $  (731,000)
                        ============ ===========  ============ ===========

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


See accompanying report of management.




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


                                                      Nine Months Ended
                                                          July 31,
                                                      2010         2009
                                                  -----------  -----------
Cash flows from Operating Activities
   Net income (loss)                              $   450,000  $  (731,000)
   Adjustments to reconcile net income (loss) to
    net cash provided by operating activities:
     Depreciation                                      50,000       48,000
     Amortization                                       3,000            -
     Non-cash equity based compensation               139,000       78,000
   Changes in operating assets and liabilities:
     Accounts receivable                               35,000      815,000
     Inventories                                       75,000       91,000
     Prepaid expenses and other current assets          6,000       (9,000)
     Accounts payable                                 113,000       22,000
     Accrued expenses                                  75,000      (97,000)
     Deferred revenues                               (102,000)     119,000
                                                  -----------  -----------

Net cash provided by operating activities             844,000      336,000
                                                  -----------  -----------

Cash used in investing activities
   Additions to property and equipment                (45,000)     (24,000)
   Increase in other intangible assets                (89,000)          (-)
                                                  -----------  -----------

Net cash used in investing activities                (134,000)     (24,000)
                                                  -----------  -----------

Cash flows from financing activities
   Net short-term borrowings (repayments)                   -     (400,000)
   Issuance of common stock                           273,000            -
                                                  -----------  -----------

Net cash provided by (used in) financing
 activities                                           273,000     (400,000)
                                                  -----------  -----------

Net Increase (Decrease) in Cash and Cash
 Equivalents                                          983,000      (88,000)

Cash and Cash Equivalents, at the beginning
 of the period                                      1,301,000    1,709,000
                                                  -----------  -----------

Cash and Cash Equivalents, at the end of
 the period                                       $ 2,284,000  $ 1,621,000
                                                  ===========  ===========



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