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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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.

Further inquiry note:
Kobi Ben Efraim, Chief Financial Officer, LifeWatch AG
Tel +41 52 632 00 50 | Fax +41 52 632 00 51 | Email [email protected]

Sensus Investor and Public Relations GmbH, Zürich:
Tel +41 43 366 55 11 | Fax +41 43 366 55 12 | Email [email protected]

end of announcement euro adhoc
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emitter:      LifeWatch AG
              Rundbuckstrasse 6
              CH-8212 Neuhausen am Rheinfall
phone:        +41 52 632 00 50
FAX:          +41 52 632 00 51
mail:         [email protected]
WWW:          www.lifewatch.com
sector:       Healthcare Providers
ISIN:         CH0012815459
indexes:      SPI, SPIEX
stockmarkets: Open Market / XETRA: Frankfurt, Hauptsegment: SIX Swiss Exchange,
              free trade: Berlin 
language:     English

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