Vasomedical Reports Second Quarter Fiscal 2008 Financial Results

Vasomedical, Inc. ("Vasomedical”) (OTC: VASO.OB), a leader in the noninvasive treatment and management of cardiovascular diseases, today announced financial results for the three and six months ended November 30, 2007. Total revenues were $1,388,000 in the second quarter of fiscal 2008, compared with total revenues of $1,523,000 in the second quarter of fiscal 2007. Revenues from equipment sales increased approximately 4% to $597,000 in the three months ended November 30, 2007 as compared to $575,000 for the same period for the prior year. Equipment rentals and services were $791,000 in the three months ended November 30, 2007, down approximately 17% from $948,000 for the same period in the previous year. Revenue from equipment rental and services represented 57% of total revenue in the second quarter of fiscal 2008 compared to 62% in the second quarter of fiscal 2007. This decrease in revenue resulted primarily from a 16% decrease in service-related revenue and a 56% decline in rental revenue. The company recorded a net loss attributable to common shareholders of $64,000, or $0.00 per common share, during the three months ended November 30, 2007, compared to a loss of $369,000, or $0.00 per common share, during the three months ended November 30, 2006. The decrease in the net loss compared to the prior-year quarter reflects a $420,000, or 36%, decrease in operating expenses as a result of continuing to restructure our costs to be better aligned with potential near-term sales. Dr. John C.K. Hui, President and Chief Executive Officer of Vasomedical, commented, "As we end the 2nd quarter of 2008, it is apparent that the financial status of the company has improved significantly due to cost cutting measures and the injection of new capital. We have been focusing on sales related to the treatment of refractory angina, which is reimbursed domestically, and at the same time expanding our international market to explore additional claims such as heart failure and the applications of EECP® therapy as a preventive treatment for cardiovascular disease. Going forward, we will concentrate on growing our sales, while at the same time continuing to expand our clinical data to support EECP® therapy as a safe and effective treatment to gain widespread recognition from both physicians and the public.” For the first six months of fiscal 2008, total revenues were $2,728,000, compared with total revenues of $3,605,000 for the first six months of fiscal 2007. The company recorded a net loss attributable to common shareholders of $83,000, or $0.00 per common share, during the six months ended November 30, 2007, compared to a loss of $908,000, or $0.01 per common share, during the six months ended November 30, 2006. As of November 30, 2007, the Company had cash and cash equivalents balances of $2,556,000 compared with $850,000 as of May 31, 2007 and working capital as of November 30, 2007 of $3,107,000 compared with $1,320,000 as of May 31, 2007. About Vasomedical, Inc. and EECP® Therapy Vasomedical, Inc. develops, manufactures and markets EECP® therapy systems to deliver its proprietary form of enhanced external counterpulsation therapy. EECP® therapy is a noninvasive, outpatient therapy used in the treatment of ischemic cardiovascular diseases, currently used to manage chronic stable angina and heart failure. The therapy increases blood flow and oxygen supply to the heart muscle and other organs and decreases the heart's workload and need for oxygen. Function of the endothelium, the inner lining of blood vessels throughout the body, is also improved, lessening resistance to blood flow. These actions reduce or eliminate symptoms of angina and heart failure, and improve exercise performance and quality of life for thousands of people worldwide. For more information visit www.vasomedical.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 report, words such as "anticipated,” "believes,” "could,” "estimates,” "expects,” "may,” "offers,” "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 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 Vasomedical, Inc. and Subsidiaries CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands, except per share amounts)     November 30, 2007 May 31, 2007 ASSETS (unaudited) (Derived from audited financial statements) CURRENT ASSETS Cash and cash equivalents $2,556 $850 Accounts receivable, net of an allowance for doubtful accounts of $292 at November 30, 2007, and $365 at May 31, 2007 866 734 Inventories, net 1,724 2,118 Other current assets 201 35 Total current assets 5,347 3,737   PROPERTY AND EQUIPMENT, net of accumulated depreciation of $2,154 at November 30, 2007, and $2,837 at May 31, 2007 147 1,286 DEFERRED DISTRIBUTOR COSTS, net of accumulated amortization of $51 at November 30, 2007, and $0 at May 31, 2007 458 -- OTHER ASSETS 236 260 $6,188 $5,283   LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $603 $573 Current maturities of long-term debt and notes payable -- 66 Sales tax payable 143 160 Deferred revenue 1,289 1,287 Deferred gain on sale of building 53 -- Accrued director fees 19 79 Accrued warranty and customer support expenses 31 16 Accrued professional fees 37 144 Accrued commissions 65 90 Total current liabilities 2,240 2,415   LONG-TERM DEBT -- 785 DEFERRED REVENUE 309 470 DEFERRED GAIN ON SALE OF BUILDING 195 -- DEFERRED RENT EXPENSE 3 --   COMMITMENTS AND CONTINGENCIES   STOCKHOLDERS' EQUITY   Common stock, $.001 par value; 110,000,000 shares authorized; 93,618,004 shares at November 30, 2007, and 65,198,592 at May 31, 2007, issued and outstanding   94   65 Additional paid-in capital 48,049 46,166 Accumulated deficit (44,702) (44,618) Total stockholders’ equity 3,441 1,613 $6,188 $5,283 Vasomedical, Inc. and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)     Six Months Ended November 30, Three Months Ended November 30, 2007   2006 2007   2006 Revenues Equipment sales $1,091 $1,648 $597 $575 Equipment rentals and services 1,637 1,957 791 948 Total revenues 2,728 3,605 1,388 1,523   Cost of Sales and Services Cost of sales, equipment 765 909 424 299 Cost of equipment rentals and services 626 772 312 417 Total cost of sales and services 1,391 1,681 736 716         Gross Profit 1,337 1,924 652 807   Operating Expenses Selling, general and administrative 1,200 2,353 642 1,028 Research and development 246 469 106 141 Total operating expenses 1,446 2,822 748 1,169         LOSS FROM OPERATIONS (109) (899) (96) (362)   Other Income (Expense) Interest and financing costs (17) (37) -- (18) Interest and other income, net 35 36 23 15 Gain on sale of fixed asset 18 -- 13 -- Total other income (expense) 36 (1) 36 (3)         LOSS BEFORE INCOME TAXES (73) (900) (60) (365) Income tax expense, net (10) (8) (4) (4) NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $(83) $(908) $(64) $(369)   Net loss per common share - basic $(.00) $(0.01) $(0.00) $(0.00) - diluted $(.00) $(0.01) $(0.00) $(0.00)   Weighted average common shares outstanding - basic 90,667,355 65,198,592 93,618,004 65,198,592 - diluted 90,667,355 65,198,592 93,618,004 65,198,592   REVENUES BY GEOGRAPHIC REGION United States business $2,136 $2,913 $952 $1,293 Non-domestic business 592 692 436 230 $2,728 $3,605 $1,388 $1,523