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BOTHELL, Wash., -- Cardiac Science Corporation, a global leader in advanced cardiac diagnosis, resuscitation, rehabilitation, and informatics products, today announced that revenue for the first quarter was in line with its previous guidance at $39.7 million, a decline from the first quarter of 2008 due to both a soft market for healthcare capital equipment and changes in the Japanese AED marketplace.

Cardiac monitoring products revenue was $12.3 million and defibrillation products revenue was $22.9 million for the first quarter of 2009. International AED sales, excluding Japan, were up 4% compared to the first quarter of 2008. AED sales in Japan were off by 46% from last year due to a high comparable quarter as well as a pending product introduction from the company's distribution partner. North American AED sales were down 12% compared to the prior year period and Cardiac monitoring revenue decreased by 30%, driven by slowed buying patterns in both the hospital and physician office environments. Changes in foreign currency exchange rates accounted for approximately 4% of the decrease in total revenue as compared to the same period in the prior year.

"We were challenged during the quarter by the economy and the situation in Japan, but we are pursuing strategies that position the company for future growth and leadership," said Dave Marver, president and chief executive officer. "We generated cash, improved our operations, and aggressively pared our organization to match sales levels. Over the coming months we expect to announce a series of new products and other developments that will strengthen the company."

First Quarter Financial Results

First quarter revenue of $39.7 million represented a decrease of 19% compared to the $49.0 million in revenue reported in the first quarter of 2008. First quarter gross margin was 50.1%, an increase over gross margin from the first quarter of 2008 of 49.4%. This increase is mostly due to favorable product mix.

Operating expenses in the first quarter of 2009 were $20.3 million, compared to $21.2 million for the first quarter of 2008, a reduction of 4%. First quarter 2009 operating expenses decreased 16% compared to the pro forma fourth quarter 2008 operating expenses of $24.1 million. Actual operating expenses in the fourth quarter of 2008 were $131.7 million, but included a goodwill impairment charge of $107.7 million.

The Company reported a small operating loss of $0.4 million and a net loss of $0.5 million, or $0.02 per share in the first quarter of 2009, compared to net income of $2.1 million, or $0.09 per share in the first quarter of 2008. Changes in foreign currency exchange rates accounted for approximately $0.03 of the decrease in earnings per share as compared to the same period in the prior year.

EBITDA was $0.8 million for the first quarter of 2009. Adjusted EBITDA, which excludes stock-based compensation expense, was $1.5 million, or 4% of revenue.

The Company generated $3.7 million in cash from operating activities during the quarter and had $37.6 million in cash and cash equivalents as of March 31, 2009.

Outlook

The Company expects revenue for the second quarter of 2009 to be in a range between $37 million and $39 million, reflecting continued softness in global cardiac monitoring sales and Japanese defibrillation sales, with more stability in North American and other international AED sales and service revenue.

The Company expects to report a small net loss again in the second quarter in a range between $0.03 and $0.05 per share.

"Despite near term revenue softness, we remain confident about our long term growth prospects," said Mike Matysik, chief financial officer. "We expect operating cash flow to be neutral to positive in the near term. We will continue to incur relatively small GAAP losses during this time, as we continue to invest in and build capabilities that we expect will result in longer term growth," he concluded.

Non-GAAP and Pro Forma Financial Information

This news release contains a discussion of EBITDA, Adjusted EBITDA and Pro Forma Operating Expenses which are non-GAAP financial measures provided as a complement to results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The term "EBITDA" refers to a financial measure defined as earnings before net interest, income taxes, depreciation, and amortization. "Adjusted EBITDA" refers to EBITDA before stock-based compensation and litigation expense. "Pro Forma Operating Expenses" refers to Total Operating Expenses before impairment of goodwill in the fourth quarter of 2008. None of these measures are a substitute for measures determined in accordance with GAAP, and may not be comparable to the same measures as reported by other companies. EBITDA and Adjusted EBITDA are an integral part of the internal management reporting and planning process and are the primary measures used by management to evaluate the operating performance of the Company. Pro Forma Operating Expenses for the fourth quarter 2008 are presented because operating expenses as calculated under GAAP for the same period included a significant, non-recurring item related to goodwill impairment. Presenting operating expenses exclusive of that impairment charge provides a more meaningful comparison to operating expenses for the first quarter of 2009, which did not include a goodwill impairment charge. The components of these measures include the key revenue and expense items for which operating managers are responsible and upon which their performance is evaluated. The Company also uses Adjusted EBITDA for planning purposes and in presentations to its board of directors. Reconciliations of EBITDA and Adjusted EBITDA to net income, the most comparable GAAP measure, and Pro Forma Operating Expenses to Operating Expenses, the most comparable GAAP measure, are contained in this press release.

Conference Call Information

Cardiac Science will conduct a conference call at 4:30 p.m. Eastern Daylight Time today to discuss the Company's financial results for the first quarter. The call will be hosted by Rudi Naumann-Etienne, chairman; Dave Marver, president and chief executive officer; and Mike Matysik, senior vice president and chief financial officer.

To access the conference call, please dial 877.941.2333. International participants can call 480.629.9723. The call will also be web cast live at www.cardiacscience.com. An audio replay of the call will be available for 7 days following the call at 800.406.7325 for U.S. callers or 303.590.3030 for those calling outside the U.S. The password required to access the replay is 4064271#. An audio archive will be available at www.cardiacscience.com for 90 days following the call.

About Cardiac Science

Cardiac Science, a wholly owned subsidiary of Opto Circuits (India) Ltd., develops, manufactures, and markets a family of advanced diagnostic and therapeutic cardiology devices and systems, including automated external defibrillators (AED), electrocardiograph devices (ECG/EKG), cardiac stress treadmill and systems, PC-based diagnostic workstations, Holter monitoring systems, hospital defibrillators, vital signs monitors, cardiac rehabilitation telemetry systems, and cardiology data management systems (informatics) that connect with hospital information (HIS), electronic medical record (EMR), and other information systems. The company sells a variety of related products and consumables and provides a portfolio of training, maintenance, and support services. Cardiac Science, the successor to the cardiac businesses that established the trusted Burdick^®, HeartCentrix^®, Powerheart^®, and Quinton^® brands, is headquartered in Bothell, Washington. With customers in almost 100 countries worldwide, the company has operations in North America, Europe, and Asia. For information, call 425.402.2000 or visit http://www.cardiacscience.com.

Forward-Looking Statements

This press release contains forward-looking statements. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, those relating to Cardiac Science Corporation's future AED sales in Japan, expected shipments of backordered products in the fourth quarter of 2010, and expectations regarding the closing of the transaction with Opto Circuits. These are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results and performance may vary significantly from those expressed or implied in such statements. Factors that could cause or contribute to such varying results and other risks include those more fully described in the Annual Report on Form 10-K filed by Cardiac Science Corporation for the year ended December 31, 2009, as updated by subsequent quarterly reports on Form 10-Q. Cardiac Science Corporation undertakes no duty or obligation to update the information provided herein.

For updates and information on worldwide defibrillation and cardiac monitoring, find us on Facebook at http://facebook.com/cardiacscience, the Cardiac Science blog at http://www.cardiacscience.com/blog, Twitter at http://twitter.com/cardiacscience, and YouTube at http://budurl.com/CSonYT

For more information, contact (media) info@cardiacscience.com | (investors) ir@optoindia.com | +91.80.2852.8088