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Vasomedical Reports Financial Results for the Quarter Ended August 31, 2011

Company Reports 239% Revenue Growth over Same Quarter in Prior Year

WESTBURY, N.Y.–(BUSINESS WIRE)–Vasomedical, Inc. (“Vasomedical”) (OTC: VASO.PK), a leader in the manufacture and sale of devices for the non-invasive treatment and management of cardiovascular diseases and a leader in the sale of diagnostic imaging products, today reported financial results for the three months ended August 31, 2011. These results include the operations of its wholly-owned subsidiary Vaso Diagnostics, Inc., d/b/a VasoHealthcare, our sales representative subsidiary which represents GE Healthcare (“GEHC”) for the sale of select diagnostic imaging products on an exclusive basis to specific market segments in the 48 contiguous states of the United States and Washington, DC.

For the first quarter of fiscal 2012, which ended August 31, 2011, the Company had revenue of approximately $4.33 million, compared to revenue of $1.28 million for the quarter ended August 31, 2010, an increase of $3.05 million, or 239%. The increase is principally due to an increase in commission revenue at VasoHealthcare, as the agreement with GE Healthcare is now in full operation and had only begun in the first quarter of fiscal 2011. Net loss attributable to common stockholders was $1.74 million for the three months ended August 31, 2011, compared to a net loss of $2.60 million for the same period in the prior fiscal year. The significant decrease in the net loss is attributable to the increase in commission revenue offset by the related increase in commission expense. Due to the nature of our commission structure under the agreement with GEHC, we earn progressively higher commission rates as calendar year targets are met. As we achieve these targets the higher commission rates are retroactive to the beginning of the calendar year, and therefore we anticipate earning and recognizing greater revenue in the fourth quarter of the calendar year. We continue to record substantial amounts of deferred revenues, which will be recognized once the underlying equipment or service is accepted or performed. As of August 31, 2011, total deferred revenues were approximately $12.1 million, an increase of $200 thousand from $11.9 million at May 31, 2011.

Cash used in operating activities for the quarter ended August 31, 2011 improved by $403 thousand, to $1.84 million, compared to cash used in operating activities of $2.24 million for the same period in the prior year. As noted above, our commission rates under the agreement with GEHC are progressively higher as calendar year targets are met, therefore, we anticipate significantly higher commission billings and recognized revenue in the fourth quarter of the calendar year, as well as receiving payment for such billings in subsequent periods. Our financial position continues to be strong with more than $6.2 million of cash and cash equivalents on hand at August 31, 2011.

“We are excited that we have achieved significant revenue growth from our VasoHealthcare operations and made gains in our operating cash flows,” commented Dr. Jun Ma, Chief Executive Officer and President of Vasomedical. “The performance of VasoHealthcare has generated a significant backlog of deferred revenue to be recognized in ensuing quarters as well as a tremendous improvement in our operating cash flow.”

“Through the vertical integration and expansion of our product lines resulting from our recently announced acquisitions of Life Enhancement Technology Ltd. and BIOX Instruments Co. Ltd., Vasomedical is better positioned in the marketplace to realize our global vision while enhancing our growth and profitability potential,” said Dr. Ma.

About Vasomedical

Vasomedical, Inc. is primarily engaged in designing, manufacturing, marketing and supporting EECP® external counterpulsation systems based on the Company’s proprietary technology. EECP® therapy is a non-invasive, outpatient therapy for the treatment of cardiovascular diseases and is currently indicated for use in cases of angina, cardiogenic shock, acute myocardial infarction and congestive heart failure. The Company provides hospitals, clinics and private practices with EECP® equipment, treatment guidance and a staff training and maintenance program designed to provide optimal patient outcomes. The Company also provides other noninvasive medical equipment including Holter monitors and ambulatory blood pressure monitors.

Vaso Diagnostics d/b/a VasoHealthcare, a wholly owned subsidiary of Vasomedical, Inc., is a professional sales representation organization offering vendors of medical devices an alternative third party sales channel. Through an agreement with GE Healthcare, it is currently engaged as an exclusive sales representative for certain GE Healthcare products. Additional information is available on the Company’s website at

Summarized Financial Information

STATEMENT OF OPERATIONS       August 31, 2011         August 31, 2010
Revenue from operations       $ 4,329,000           $ 1,276,000  
Gross profit       $ 2,827,000           $ 638,000  
Operating loss       $ (1,683,000)           $ (2,577,000)  
Other income, net       $ 32,000           $ 13,000  
Loss before income taxes       $ (1,651,000)           $ (2,564,000)  
Provision for income taxes       $ (2,000)           $ (6,000)  
Net loss       $ (1,653,000)           $ (2,570,000)  
Preferred Stock Dividends       $ (86,000)           $ (28,000)  
Net loss attributable to common shareholders       $ (1,739,000)           $ (2,598,000)  
Basic and diluted loss per share attributable to common shareholders       $ (0.01)           $ (0.02)  


BALANCE SHEET       August 31, 2011         May 31, 2011
Total Current Assets       $ 16,479,000         $ 17,372,000
Total Assets       $ 17,440,000         $ 18,555,000
Total Current Liabilities       $ 14,823,000         $ 14,536,000
Total Shareholders’ Equity       $ 1,336,000         $ 2,908,000


Except for historical information contained in this release, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this release, words such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential” and “intends” and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the effect of the dramatic changes taking place in the healthcare environment; the impact of competitive procedures and products and their pricing; medical insurance reimbursement policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in the conduct of clinical trials and other product development programs; the actions of regulatory authorities and third-party payers in the United States and overseas; uncertainties about the acceptance of a novel therapeutic modality by the medical community; continuation of the GEHC agreement; and the risk factors reported from time to time in the Company’s SEC reports. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.


Investor Relations:
Dr. Jun Ma, 516-997-4600
President and CEO
Michael J. Beecher, 516-997-4600

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