EANS-Adhoc: LifeWatch AG reports strong results for second quarter 2009 as seventh consecutive quarter of year-over-year revenue growth Entering the market for Home Sleep Testing

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3-month report/LifeWatch Q2 2009 Results

28.07.2009

Neuhausen am Rheinfall / Switzerland - LifeWatch AG (SIX Swiss
Exchange: LIFE), the leading provider of wireless cardiac monitoring
services in the U.S., today announces strong results for the second
quarter of 2009. Starting in the fourth quarter, LifeWatch will enter
the market for Home Sleep Testing with a new monitoring service offer
package called NiteWatch.

The following link will take you to the complete press release:

http://www.newsaktuell.ch/pdf/lifewatch_q2_2009_english_final.pdf

The following link will take you to the Letter to Shareholders Q2
2009:

http://www.newsaktuell.ch/pdf/lts__q2_09_final_28072009.pdf

Q2 2009 Highlights are as follows:

. Consolidated revenues reached USD 33.92 million, reflecting growth of
66.8% compared with Q2 2008

. Gross profit margin of 59.6% representing USD 20.2 million in gross profit

. EBITDA of USD 8.85 million with a 26.1% margin, compared with a 21.7%
margin in Q2 2008

. EBIT of USD 7.21 million with a margin of 21.3%, versus a 16.1% margin in
Q2 2008

. Positive operational cash flow of USD 8.18 million, more than double the
USD 3.12 million generated in Q2 2008

. 6 new managed care contracts at LifeWatch Services were signed in Q2 2009,
totalling 464 contracts, and covering over 296 million lives

. LifeStar ACT wireless monitoring service achieved more than 18,500
enrollments in Q2 2009

LifeWatch AG reported very strong results for the seventh consecutive
quarter, with consolidated revenues of USD 33.92 million in Q2 2009.
This reflects revenue growth of 66.8% compared with Q2 2008 revenues
of USD 20.34 million. LifeWatch also realized continued operational
efficiencies, with higher EBIT and EBITDA margins, and net income
growth. Net income of USD 5.01 million in the second quarter 2009
increased substantially year-over-year from USD 1.03 million in Q2
2008. Earnings per share for this quarter were USD 0.379 (fully
diluted), a significant increase from USD 0.083 (filly diluted)
earnings per share reported in Q2 2008. In Q2 2009, LifeWatch
generated USD 8.18 million in cash flow from operations, compared
with USD 3.12 million recorded in Q2 2008. The balance of cash, cash
equivalents, marketable securities and structures in Q2 2009 reached
USD 30.20 million, of which cash and cash equivalents were USD 28.92
million. This compares with USD 17.84 million in cash, cash
equivalents, marketable securities and structures reported in Q2
2008.

Monitoring Services

LifeWatch's Monitoring Services achieved revenues of USD 31.81
million in Q2 2009, compared with USD 18.78 million in Q2 2008,
reflecting a 69% increase. ACT continues to be the primary driver of
our impressive results, and supports our decision to focus on growing
the wireless monitoring service business. Adoption of wireless
cardiac monitoring solutions will continue to be driven by further
outsourcing from hospitals and clinics to Independent Diagnositic
Test Facilities (IDTFs) such as LifeWatch.

As reported on July 13, 2009, LifeWatch Services Inc. received a
letter from Highmark Medicare Services (the carrier for CMS/Medicare
services in Pennsylvania) announcing a reduction in reimbursement
rates from USD 1,123 to USD 754 for the U.S. nationwide CPT Code
93229 beginning September 1, 2009. LifeWatch strongly believes that
the planned reduction affecting all providers covered under CPT Code
93229 is unjustified, as a result of the cost related to providing
24-hour cardiac monitoring. LifeWatch in conjunction with the
coalition of IDTFs is challenging the decision. Highmark's proposed
rates is applicable to Medicare patients and impacts roughly a third
of LifeWatch's LifeStar ACT enrollees. The remainder of our wireless
cardiac arrhythmia monitoring enrollees are covered by 464
independent commercial contracts.

The LifeWatch Federal business division signed two new contracts with
the Department of Defence (DoD) and three with the Department of
Veterans Affairs (VA) for facilities to start utilizing LifeWatch
monitoring services in Q2 2009. To help support this growth, a new
Federal Client Executive was hired in the quarter.

In June of 2009, LifeWatch consolidated its monitoring centres to two
fully redundant locations in order to better support our ACT
telemetry platform. This allows LifeWatch to better align the
clinical continuity and service operations that support the continued
expansion of ACT, while becoming more efficient and cost effective.

Sales of Systems

Sales of Systems in Q2 2009 of USD 2.12 million compared with USD
1.55 million in Q2 2008. This growth was attributed mainly to sales
of cardiac event recorders in the U.S. market.

New Market Entry - Home Sleep Testing Market

The Company's successful ACT wireless monitoring services in the U.S.
has positioned LifeWatch as the brand leader in wireless telemedicine
services, and to this end, LifeWatch intends to leverage its
expertise in remote medical monitoring into complementary markets. As
a first step, LifeWatch has announced a strategy to enter the sleep
apnea market with an Obstructive Sleep Apnea (OSA) home sleep testing
solution in the U.S. Untreated OSA patients have double the
healthcare costs of those not afflicted, yet even with the high
prevalence of OSA in the U.S., less than 1 in 7 OSA patients have
been diagnosed. The Sleep Testing Market is estimated at USD 3
billion; and is forecast at more than 3 million diagnostic tests in
2009. In January 2009, Medicare issued a coverage decision memorandum
specific to HST for OSA diagnosis after an extensive review of 93
clinical studies conducted to validate the utilization of home sleep
testing (HST), Given favorable reimbursement environment for HST,
LifeWatch decided to enter into the HST market with its "NiteWatch"
monitoring service platform, which will be launched in Q4 2009 to
specific customers, with an expanded roll-out planned in 2010.

Reiterate 2009 Outlook

LifeWatch reiterates its 2009 guidance of at least 50% revenue growth
with ongoing strong profitability. We expect the EBITDA margin to
exceed 20%, with an EBIT margin above 16% for Fiscal Year 2009.

About LifeWatch AG

LifeWatch AG, headquartered in Neuhausen am Rheinfall and listed on
SIX Swiss Exchange (LIFE), Switzerland, is the leading healthcare
technology and solution company, specializing in advanced telehealth
systems and wireless cardiac monitoring services. LifeWatch services
treat high-risk and chronically ill patients, health conscious
consumers and wellness programs. LifeWatch has subsidiaries in the
United States, the Netherlands, Japan, the United Kingdom,
Switzerland and Israel. LifeWatch AG is the parent company of
LifeWatch Services Inc., a leading US-based cardiac monitoring
service provider, and manufacturer of telecardiology products.
www.lifewatch.com

Sign-up for customized E-mail alerts and documentation requests is
available at

http://production.investis.com/lifewatch/alert-service/

This press release includes forward-looking statements. All
statements other than statements of historical facts contained in
this press release, including statements regarding future results of
operations and financial position, business strategy and plans and
objectives for future operations, are forward- looking statements.
The words "believe," "may," "will," "estimate," "continue,"
"anticipate," "intend," "expect" and similar expressions are intended
to identify forward-looking statements. LifeWatch AG has based these
forward- looking statements largely on current expectations and
projections about future events and financial trends that it believes
may affect the financial condition, results of operations, business
strategy, short term and long term business operations and
objectives, and financial needs. These forward-looking statements are
subject to a number of risks, uncertainties and assumptions. In light
of these risks, uncertainties and assumptions, the forward-looking
events and circumstances described may not occur and actual results
could differ materially and adversely from those anticipated or
implied in the forward- looking statements. All forward-looking
statements are based only on data available to LifeWatch AG at the
time of the issue of this press release. LifeWatch AG does not
undertake any obligation to update any forward-looking statements
contained in this press release as a result of new information,
future events or otherwise.

THIS PRESS RELEASE IS NOT BEING ISSUED IN THE UNITED STATES OF
AMERICA AND SHOULD NOT BE DISTRIBUTED TO UNITED STATES PERSONS OR
PUBLICATIONS WITH A GENERAL CIRCULATION IN THE UNITED STATES. THIS
PRESS RELEASE DOES NOT CONSTITUTE AN OFFER OF SECURITIES OF LIFEWATCH
AG OR ANY OF ITS SUBSIDIARIES FOR SALE IN THE UNITED STATES OR AN
INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES OF LIFEWATCH
OR ITS SUBSIDIARIES IN THE UNITED STATES. IN ADDITION, THE SECURITIES
OF LIFEWATCH AG AND ITS SUBSIDIARIES HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR
DELIVERED WITHIN THE UNITED STATES OR TO U.S. PERSONS ABSENT
REGISTRATION UNDER OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE UNITED STATES SECURITIES LAWS. ANY PUBLIC
OFFERING OF SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE
BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM LIFEWATCH AG OR
ITS SUBSIDIARIES, AS APPLICABLE, AND WILL CONTAIN DETAILED
INFORMATION ABOUT THE ISSUER AND ITS MANAGEMENT AS WELL AS FINANCIAL
STATEMENTS OF THE ISSUER.

end of announcement euro adhoc
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ots Originaltext: LifeWatch AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Kobi Ben Efraim, Chief Financial Officer, LifeWatch AG

Tel +41 52 632 00 50 | Fax +41 52 632 00 51 | Email kobibe@lifewatch.com

Sensus Investor and Public Relations GmbH, Zürich:

Tel +41 43 366 55 11 | Fax +41 43 366 55 12 | Email lifewatch@sensus.ch

Branche: Healthcare Providers
ISIN: CH0012815459
WKN: 1281545
Index: SPI, SPIEX
Börsen: Frankfurt / Open Market / XETRA
SIX Swiss Exchange / Hauptsegment
Berlin / free trade