Vasomedical Reports Financial Results for the Quarter Ended February, 28, 2011

Achieved Profitability and Positioned for Significant Future Growth with Strong Cash Flow

WESTBURY, N.Y.--(BUSINESS WIRE)--Vasomedical, Inc. (“Vasomedical”) (OTC: VASO.PK), a world leader in the noninvasive treatment of cardiovascular diseases, today reported financial results for the three months ended February, 28, 2011. These results include the operations of its wholly-owned subsidiary Vaso Diagnostics d/b/a VasoHealthcare which represents GE Healthcare 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.

“Our equipment segment performance continued to improve over last year, and our VasoHealthcare team delivered another successful quarter. 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.”

For the third quarter of fiscal year 2011, which ended February 28, 2011, the Company's total revenues were $5.851 million, an increase of $4.744 million, or 428% as compared to revenues of $1.107 million for the same quarter last year. The Company reported operating income of approximately $0.330 million for the quarter, compared to an operating loss of $0.135 million for the same period in the prior fiscal year. The Company continued to record substantial increases in its deferred revenues, which will be recognized once the underlying equipment or service is accepted or performed. As of February 28, 2011, total deferred revenues were $12.609 million, an increase of $6.012 million from $6.597 million three months ago.

“We are very pleased by our improved financial results and generating an operating profit for the quarter,” commented Dr. Jun Ma, Chief Executive Officer and President of Vasomedical. “Our equipment segment performance continued to improve over last year, and our VasoHealthcare team delivered another successful quarter. 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.” As of March 31, 2011, the company had cash and cash equivalents of approximately $9.8 million.

“With our improving financial position,” stated Dr. Ma, “we are now well positioned to implement our business plan which consists of intensifying our efforts to expand reimbursement for our proprietary EECP® therapy; actively seeking accretive acquisitions of compatible medical equipment products; and expanding our product line with GE Healthcare.”

“This is a very exciting time for our Company,” continued Dr. Ma. “We appreciate the valuable contributions of our employees and thank our shareholders for their support and will continue to work hard to achieve our anticipated continued growth and diversification.”

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 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 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.