http://www.versustech.com () —
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 (http://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.
