EANS-Adhoc: LifeWatch to announce results for the second quarter 2011 (with document)

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ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
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6-month report/LifeWatch Q2 2011 results

23.08.2011

• Continuous enrollment growth in all services lines

• New NiteWatch Sales approach leads to 50% more growth
• San Francisco Call Center with new Medicare IDTF provider number
• Important cost savings initiatives of USD 15 m annually on track
• In total 33 new contracts

International conference call about LifeWatch AG results in the
second quarter 2011:

• Tuesday, August 23, 2011 at 10:00 a.m. CEST
• Dial-in number: +41 (0)91 610 56 00 (Europe) / +44 (0)203 059 58 62 (UK) /
+1 (1) 866 291 41 66 (USA - Toll-free)

Neuhausen am Rheinfall/Switzerland - LifeWatch AG (SIX Swiss
Exchange: LIFE), the leading provider of wireless telemedicine, today
announces the results for the second quarter 2011. LifeWatch´s
financial results are still affected by the difficult reimbursement
environment in the U.S. healthcare market but the Company achieved
important operational improvements.

At the end of this message you will the PDF-versions of this press
release and of the letter to shareholders with the results for the
second quarter 2011.

Second Quarter 2011 Financial Highlights:

• ACT enrollments rose 6.6% compared to Q2 2010

• NiteWatch enrollments increased 50.4% over Q2 2010

• 16 new managed care contracts for ACT Services

• 17 new managed care contracts for NiteWatch services

• Revenues decreased 13.4% to USD 20.15 million, versus USD 23.27 million in
Q2 2010

• Gross margin decreased to 43.8%, compared to 51.0% in Q2 2010

• LBIT of USD 8.55 million, compared to EBIT of USD 0.12 million in Q2 2010

• LBITDA of USD 7.02 million, compared to EBITDA of USD 1.57 million in Q2
2010

• Cash, cash equivalents, marketable securities and structures amounted to
USD 11.53 million

• Accounts receivable this quarter include USD 9.00 million for Medicare
services provided at our San Francisco call center, which will be
collected in Q3 2011

Management analysis:

The difficult reimbursement and overall economic environment in the
U.S.A. and in the healthcare market continued to impact our business
and our revenues. This difficult environment has compelled the
company to implement major restructuring and cost savings initiatives
of approximately USD 15 million annually. The company is on its way
to complete the cost savings initiatives by mid-October 2011. The
restructuring will include more automation, outsourcing and other
measures which will reduce the labour costs and other expenses
significantly. We expect these measures to have a relative impact on
our 2011 fiscal results, and a positive impact on our 2012 results.
In mid-February 2011 we opened our third call center in San Francisco
and applied for a Medicare provider number, which is the normal
administrative process. From mid-February until August, the Company
provided services to Medicare patients in the amount of USD 12.5
million. On August 10, 2011 we received this Medicare provider number
for the San Francisco call center, which will now enable the Company
to collect for these services.

R&D:

The company is investing heavily in the development of two new
breakthrough products that will be ready for launch in the second
half of 2012. We believe these new products will completely change
the business direction, financial situation and total positioning of
the company, and further diversify our offerings.

Gross Profit, LBIT and LBITDA:

• Gross profit was USD 8.82 million (43.8%), compared to gross profit of USD
11.87 million (51.0%) in Q2 2010. The lower gross margin is mainly
attributable to 1) the decline in reimbursement, while fixed costs for the
provision of monitoring services remained the same; and 2) overlapping
payroll expenses related to hiring and training staff at our San Francisco
call center which took longer than anticipated.

• LBIT was USD 8.55 million, compared to EBIT of USD 0.12 million in Q2
2010. The operational expenses were affected by the cost items below:

- Investment in R&D developing new products and services

- Expenses for legal services including intellectual property
protection of the Company

- Expenses related to restructuring and other

• LBITDA was USD 7.02 million, compared to EBITDA of USD 1.57 million in Q2
of 2010.

Net Loss:

LifeWatch reported a net loss of USD 10.07 million in Q2 2011,
compared to a net profit of USD 1.87 million recorded a year ago.
Loss per share was USD 0.81 (fully diluted), compared to earnings per
share of USD 0.14 (fully diluted) in the second quarter of 2010.

ACT Monitoring Services:

ACT enrollments rose 6.6% over Q2 2010; however a lower Average
Selling Price (ASP) had a negative impact on ACT revenues. We expect
the ASP for ACT services to rise in Q3 2011 as we have terminated the
provision of services when there is no insurance coverage.

NiteWatch:

During this reporting quarter, enrollments for our NiteWatch Home
Sleep Test service grew 50.4%, compared to Q2 2010. The growth is due
to the implementation of a multi-faceted sales approach. We also
received 17 new managed care contracts. LifeWatch will continue its
investments into this service line.

Outlook 2011:

Given the current environment, we will not meet our previously
announced forecast for 2011. The Company has lowered the fiscal
revenue forecast to USD 80 - 82 million. For the remainder of the
fiscal year the Company will focus on completing the restructuring
and cost savings initiatives in order to return to profitability.

Sign-up for customized E-mail alerts and documentation requests is
available at http://production.investis.com/lifewatch/alert-service/

About LifeWatch AG:

LifeWatch AG, headquartered in Neuhausen am Rheinfall, Switzerland
and listed on SIX Swiss Exchange (LIFE), is the leading healthcare
technology and solutions company, specializing in advanced
telemedicine systems and wireless remote patient monitoring services.
LifeWatch provides services to 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 wireless
remote telemedicine provider. LifeWatch services include Home Sleep
Testing for Obstructive Sleep Apnea patients under the brand name
NiteWatch. For additional information, please visit www.lifewatch.com
and www.nitewatchservices.com.

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
AG 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.

Attachments with Announcement:
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http://resources.euroadhoc.com/us/1HCW6Rjz
http://resources.euroadhoc.com/us/IBzY8Led

Further inquiry note:
Kobi Ben Efraim, Chief Financial Officer, LifeWatch AG:
Tel +41 52 632 00 50 | Fax +41 52 632 00 51 | E-mail kobibe@lifewatch.com

Sensus Investor & Public Relations, Zürich:
Tel +41 43 366 55 11 | Fax +41 43 366 55 12 | E-mail lifewatch@sensus.ch

end of announcement euro adhoc
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Attachments with Announcement:
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http://resources.euroadhoc.com/us/1HCW6Rjz
http://resources.euroadhoc.com/us/IBzY8Led

issuer: LifeWatch AG
Rundbuckstrasse 6
CH-8212 Neuhausen am Rheinfall
phone: +41 52 632 00 50
FAX: +41 52 632 00 51
mail: users@lifewatch.com
WWW: www.lifewatch.com
sector: Healthcare Providers
ISIN: CH0012815459
indexes: SPI, SPIEX
stockmarkets: Open Market / XETRA: Frankfurt, free trade: Berlin, Main Standard:
SIX Swiss Exchange
language: English