Vasomedical Reports Financial Results for the Quarter Ended November 30, 2010

WESTBURY, N.Y., Jan. 18, 2011 /PRNewswire/ -- Vasomedical, Inc. ("Vasomedical") (OTC Bulletin Board: VASO), a global provider of medical devices, today announced financial results of the three months ended November 30, 2010. Vasomedical is a world leader in the noninvasive treatment of cardiovascular diseases. In addition, the Company, through a wholly-owned subsidiary Vaso Diagnostics d/b/a VasoHealthcare, commenced operations on July 1, 2010 under its sales representative agreement with GE Healthcare (the "GEHC Agreement") for the sale of select GE Healthcare Diagnostic Imaging products. Under the GEHC Agreement, VasoHealthcare has been appointed the exclusive representative for these products to specific market segments in the 48 contiguous states of the United States and the District of Columbia.

For the second quarter ended November 30, 2010, the Company's total revenues were $3.801 million, an increase of $2.961 million, or 353% as compared to revenues of $0.839 million for the same quarter last year. Revenue in the equipment segment of our business increased 113% to $1.789 million for the three-month period ended November 30, 2010 as compared to $0.839 million for the comparable prior period. The Company reported an operating loss of $1.153 million for the quarter, compared to an operating loss of $0.314 million for the same period in the prior fiscal year. This loss was attributable to an operating loss of $1.271 million in the sales representation segment, which was partially offset by an operating profit of $0.168 million in our equipment segment.

The Company is required, under certain accounting rules, to defer the recognition of revenues until the underlying equipment or service is accepted or performed, which may take several quarters. Jonathan Newton, Chief Financial Officer of the Company, stated that, "we record GEHC commissions initially as deferred revenue, and we recognize commission revenue generally when the related equipment is delivered and accepted per the terms of the GEHC Agreement. As a result, our expenses in the sales representation segment will precede the related revenue in the early stages of its operation." As of November 30, 2010, the Company had approximately $6.597 million in total deferred revenue, an increase of $5.570 million from six months ago.

Commenting on the performance of VasoHealthcare, Brent Barron, subsidiary President and Chief Operating Officer, noted, "We are very pleased with the significant achievements of our sales professionals during the first few months of operation. We believe that we have met or exceeded every initial strategic and financial objective and expect to deliver exceptional performance under our agreement with GE Healthcare. Our level of accomplishment in this initial stage of our agreement should serve as a foundation for a sustainable long-term relationship."

"Our equipment and sales representation segments both have delivered excellent performance in the quarter," said Dr. Jun Ma, President and Chief Executive Officer of Vasomedical. "The fact that EECP® system sales more than doubled from a year ago is a testimonial both to the success of our efforts to expand EECP® systems sales in the international market and to the growth of our direct sales force in the U.S. The superior execution of our VasoHealthcare business, which has resulted in exceeding the planned target in a difficult economic climate, further enhances our belief of a bright future for the Company."

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 diseases of the cardiovascular system currently indicated for use in cases of angina, cardiogenic shock, acute myocardial infarction and congestive heart failure. The therapy serves to increase circulation in areas of the heart with less than adequate blood supply and may restore systemic vascular function. 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. EECP® is a registered trademark for Vasomedical's enhanced external counterpulsation system. Through its sales representative agreement with GE Healthcare, the Company is also engaged as an exclusive sales representative for certain GE Healthcare products. Additional information is available on the Company's website at www.vasomedical.com.

VasoHealthcare™, a wholly owned subsidiary of Vasomedical Inc. is a professional sales representation company offering vendors an alternative third party sales channel. Additional information is available at www.vasohealthcare.com.

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.

SOURCE Vasomedical, Inc.