EANS-Adhoc: LifeWatch AG to announce results for the first 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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announcement.
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12.05.2011

• Continuous enrollment growth in all services lines - LifeWatch monitored

almost 65,000 patients in the first quarter 2011
    • Secured 32 new contracts with insurance companies
    • Achieved gross margin of 58.5%
    • Positive EBITDA of USD 1.40 million
    • Vice President Jake Mendelsohn will leave LifeWatch at the end of this
      week

International conference call and audio web cast about LifeWatch AG results in
the first quarter 2011:

• Thursday, May 12, 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);
    • Audio Webcast http://services.choruscall.eu/links/lifewatch110512.html;

Neuhausen am Rheinfall/Switzerland - LifeWatch AG (SIX Swiss Exchange: LIFE),
the leading provider of wireless telemedicine, today announces the results for
the first quarter 2011. LifeWatch´s operating results continued to improve in
Q1 2011, with positive levels of EBIT and EBITDA. Enrollments for cardiac
monitoring and home sleep test services rose 7% compared with Q1 2010. At the
same time, LifeWatch is announcing that Vice President Jake Mendelsohn will
leave the company at the end of this week.

You will find a PDF version of this press release and the letter to
shareholders with the results of the first quarter 2011 at the end of this
message.

Fourth Quarter 2010 Financial Highlights:

• Revenues were down 6% to reach USD 21.08 million, compared to USD 22.39
      million in Q1 2010.


    • Gross margin improved significantly to 58.5%, compared to 40.8% in Q1
      2010.

• G&A expenses decreased by USD 1.22 million from Q1 2010.

• EBIT of USD 0.08 million, compared to LBIT of USD 3.99 million in Q1 2010.

• EBITDA of USD 1.40 million, compared to LBITDA of USD 2.35 million in
      2010.


    • Cash, cash equivalents, marketable securities and structures amounted to
      USD 24.1 million.

• Capital reduction and repayment to shareholders of approx. USD 9.1 million
during Q1 2011

Management changes:

We have also to report the departure of our Vice President Jake Mendelsohn, who
will leave the Company at the end of this week. The Board of Directors thanks
Jake Mendelsohn for his work since joining the Company.

Service Enrollments:

Enrollments for our cardiac monitoring and home sleep test services rose 7%
compared to Q1 2010. In order to boost enrollments further, as already
communicated in March, LifeWatch made significant changes to our sales force by
promoting a team of leaders from within our sales organization at the end of
February. These individuals possess strong selling skills, have a deep
understanding of the market, and are experienced at identifying and
implementing new business strategies. The team reports directly to executive
management and has been mandated to develop successful selling programs and to
improve our revenue streams.

As reported previously, the Centers for Medicare & Medicaid Services (CMS)
introduced national pricing guidelines for payment code 93229 in January 2011
bringing, in our view, increased clarity and stability to the marketplace.
LifeWatch continues to engage proactively with the Reimbursement Denial
carriers to overturn their current policies, and we are confident that the CMS
ruling will have a favorable impact on our negotiations.

NiteWatch:

The NiteWatch service was re-launched in Q1 2011 with a refined, multi-faceted
sales strategy, and additional sales individuals. To drive further growth, our
cardiology sales force will educate our cardiology clients on the availability
of NiteWatch Home Sleep Test services, while the new NiteWatch sales team will
call on other medical disciplines such as ENTs (ear, nose and throat),
pulmonologists and general practitioners. A team of independent
representatives, who work strictly on commission, was also retained to help
bolster growth in areas where we have no representation. We are also exploring
partnerships with sleep labs and sleep equipment vendors across the country.

Sales Force:

As mentioned previously, LifeWatch restructured its sales force during the
first quarter of 2011. A team of sales professionals with combined strengths in
training, identifying new strategies, and implementing monitoring programs will
lead the sales organization. This team reports directly to executive management
on a weekly basis. LifeWatch constantly explores new areas of growth. Our
target growth areas include:

• Current Services - expand and grow the cardiac monitoring and sleep test
      businesses
    • New Services - identify and expand into new areas of healthcare remote
      monitoring
    • New Geographies - identify and expand into attractive international
      markets

Third Call Center in the USA:

As reported in March, LifeWatch opened a new office in San Francisco, CA during
Q1 2011. The office will house approximately 50 - 60 employees when fully
staffed by the end of summer 2011 and will primarily be devoted to clinical
call center operations. LifeWatch now operates call centers in three time zones
providing redundancy, flexibility and a competitive advantage in the
marketplace.

Revenues:

Our consolidated revenues in the first quarter of 2011 are reported below:

• U.S.A. - USD 20.78 million, compared to USD 22.08 million in Q1 of 2010.
    • Other markets - Revenues reached USD 0.30 million, compared to USD 0.31
      million in Q1 2010

Our main sales and marketing efforts continue to focus primarily on the U.S.

monitoring services market.

Gross Profit, EBITDA and EBIT:

Gross profit improved to reach USD 12.33 million, reflecting a margin of 58.5%,
compared to gross profit of USD 9.14 million with a margin of 40.8% in Q1 2010.
Gross profit in Q1 2010 included a write off-of USD 1.5 million in inventory.
EBITDA was USD 1.40 million, compared to LBITDA of USD 2.35 million reported in
Q1 of 2010. EBIT was USD 0.08 million, compared to LBIT of USD 3.99 million in
Q1 2010.

Net loss:

LifeWatch reported a net loss of USD 0.95 million in Q 2011, compared to a net
loss of USD 1.09 million recorded a year ago. Loss per share was USD 0.08
(fully diluted), compared to a loss per share of USD 0.09 (fully diluted) in
the first quarter of 2010.

Outlook 2011:

Our goals for 2011 are to increase our revenues, reduce costs and improve
profitability in both our service lines. With that in mind, we reiterate our
outlook for 2011 of USD 100 - 105 million of revenue, an EBIT margin of 10%
plus and an EBITDA margin of 15% plus. As part of its long-term growth
strategy, LifeWatch will continue to prudently invest in new services and
geographies.

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.

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 [email protected]

Sensus Investor & Public Relations, Zürich;
Tel +41 43 366 55 11 | Fax +41 43 366 55 12 | E-mail [email protected]
end of announcement euro adhoc
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Attachments with Announcement:
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http://resources.euroadhoc.com/us/e5BmaAtQ
http://resources.euroadhoc.com/us/8lHAAnNK

issuer:      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, free trade: Berlin, Main Standard: SIX
Swiss Exchange
language: English

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