Versus Technology Announces Fiscal Year Results

Marketwired

TRAVERSE CITY, MI--(Marketwire - Dec 21, 2012) - Versus Technology, Inc. ("Versus" or the "Company") (PINKSHEETS: VSTI) announced revenues of $11,424,000 for the year ended October 31, 2012, a 73.4% increase, compared to revenues of $6,589,000 for fiscal year 2011. Revenues for the quarter ended October 31, 2012, totaled $4,606,000 compared to revenues of $2,605,000 for the same period in fiscal 2011. Versus' revenue 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.

Fiscal 2012 gross profit as a percentage of revenue was 75.9% compared to 71.0% in fiscal 2011. The higher margins are the result of increased software revenues as a percentage of total revenues, 36.1% in fiscal 2012 compared to 16.3% in fiscal 2011. Similarly, gross profit for the current year's fourth quarter as a percentage of revenue was 85.4% compared to 72.7% for the same quarter of the prior year. 

Operating expenses other than cost of revenues for the full year increased from $4,964,000, or 75.3% of revenues in 2011 to $6,132,000, or 53.7% of revenues, in 2012. The increase is the direct result of continued investment in growth strategies directed at building the sales organization and System Integrator channel. Fourth quarter operating expenses other than cost of revenue totaled $1,800,000, or 39.1% of revenues, compared to $1,190,000, or 45.7% of revenues, in 2011. 

The Company reported net income of $3,529,000 which includes a deferred income tax benefit of $988,000. This is compared to a net loss of $278,000 for fiscal 2011. Net income for the quarter ended October 31, 2012, was $3,121,000 compared to net income of $704,000 for the same period in fiscal 2011.

Effective with the new fiscal year, the Company will discontinue issuing press releases publishing financial results. Shareholders should visit the Company's website or contact Joe Winowiecki at joew@versustech.com for information regarding access to future financial results.

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 October 31, 2011, and October 31, 2010, and the related consolidated statements of operations and cash flows for the fiscal year ended October 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. 2011 Annual Report which is available upon request for further details regarding the Company's financial position at October 31, 2011.

Joseph E. Winowiecki
Chief Financial Officer

December 21, 2012

 
VERSUS TECHNOLOGY, INC. AND SUBSIDIARY
Consolidated Balance Sheets
 
    October 31,
    2012   2011
Assets            
             
Current assets            
  Cash and cash equivalents   $ 2,189,000   $ 1,380,000
  Accounts receivable     4,174,000     1,965,000
  Inventories, net     893,000     741,000
  Prepaid expenses and other current assets     145,000     211,000
  Deferred income taxes     1,108,000     -
             
Total current assets     8,509,000     4,297,000
             
Property and equipment            
  Machinery and equipment     727,000     631,000
  Furniture and fixtures     102,000     99,000
  Leasehold improvements     457,000     429,000
               
        1,286,000     1,159,000
  Less accumulated depreciation     795,000     696,000
             
Net property and equipment     491,000     463,000
             
Goodwill     1,533,000     1,533,000
Other intangible assets, net     224,000     128,000
             
Other noncurrent assets     46,000     10,000
             
Total assets   $ 10,803,000   $ 6,431,000
             

See accompanying report of management.

The full annual report is available upon request.

   
VERSUS TECHNOLOGY, INC. AND SUBSIDIARY  
Consolidated Balance Sheets  
       
    October 31,  
    2012     2011  
Liabilities and shareholders' equity                
                 
Current liabilities                
  Accounts payable   $ 680,000     $ 599,000  
  Accrued expenses     829,000       499,000  
  Income taxes payable     120,000       -  
  Deferred revenue from customer advance payments     386,000       306,000  
                 
Total liabilities (all current)     2,015,000       1,404,000  
                 
Shareholders' equity                
  Common stock $0.01 par value; 150,000,000 shares authorized; 103,992,869 issued and outstanding     1,040,000       1,016,000  
  Additional paid-in capital     43,453,000       43,245,000  
  Accumulated deficit     (35,705,000 )     (39,235,000 )
                 
Total shareholders' equity     8,788,000       5,027,000  
                 
Total liabilities and shareholders' equity   $ 10,803,000     $ 6,431,000  
                 

See accompanying report of management.

The full annual report is available upon request.

   
VERSUS TECHNOLOGY, INC. AND SUBSIDIARY  
Consolidated Statements of Operations  
   
    Three months ended October 31,   Year-ended October 31,  
    2012   2011   2012   2011  
Revenues   $ 4,606,000   $ 2,605,000   $ 11,424,000   $ 6,589,000  
                           
Operating Expenses                          
  Cost of revenues     674,000     712,000     2,757,000     1,908,000  
  Research and development     287,000     170,000     925,000     770,000  
  Sales and marketing     1,128,000     828,000     3,952,000     3,329,000  
  General and administrative     385,000     192,000     1,255,000     865,000  
                           
Total Operating Expenses     2,474,000     1,902,000     8,889,000     6,872,000  
Income (Loss) From Operations     2,132,000     703,000     2,535,000     (283,000 )
                           
Interest income     1,000     1,000     6,000     5,000  
                           
Income (Loss) From Operations Before Taxes     2,133,000     704,000     2,541,000     (278,000 )
                           
Income tax benefit (expense)     988,000     -     988,000     -  
                           
Net Income (Loss)   $ 3,121,000   $ 704,000   $ 3,529,000   $ (278,000 )
                           
Basic and Diluted Net Income (Loss) Per Share   $ 0.03   $ 0.01   $ 0.03   $ -  
                           

See accompanying report of management.

The full annual report is available upon request.

   
VERSUS TECHNOLOGY, INC. AND SUBSIDIARY  
Consolidated Statements of Cash Flows  
   
  Year ended October 31,  
  2012   2011  
Cash flows from operating activities            
  Net income (loss) $ 3,529,000   $ (278,000 )
  Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:            
  Depreciation and amortization   138,000     106,000  
  Share-based compensation   90,000     117,000  
  Deferred tax asset   (1,108,000 )   -  
  Changes in operating assets and liabilities which provided (used) cash:            
    Accounts receivable   (2,210,000 )   (498,000 )
    Inventories   (152,000 )   95,000  
    Prepaid expenses and other current assets   67,000     (50,000 )
    Accounts payable   81,000     56,000  
    Accrued expenses   330,000     92,000  
    Income taxes payable   120,000     -  
    Deferred revenue from customer advance payments   80,000     (65,000 )
             
Net cash provided by (used in) operating activities   965,000     (425,000 )
             
Cash used in investing activities            
  Additions to property and equipment   (155,000 )   (278,000 )
  Increase in other noncurrent assets   (143,000 )   -  
             
Net cash used in investing activities   (298,000 )   (278,000 )
             
Cash flows from financing activities            
  Issuance of common stock upon exercise of stock options   127,000     -  
  Issuance of Common Stock   15,000     -  
             
Net cash provided by financing activities   142,000     -  
Net increase (decrease) in cash and cash equivalents   809,000     (703,000 )
             
Cash and cash equivalents, at the beginning of the year   1,380,000     2,083,000  
             
Cash and cash equivalents, at the end of the year $ 2,189,000   $ 1,380,000  

See accompanying report of management.

The full annual report is available upon request.

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


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

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