Card Guard reports on the financial results Q1 2009

Revenues for the first quarter of 2009 were USD 28.0 million, an approx. 75% increase from USD 16.0 million in the first quarter of 2008. Card Guard's U.S. subsidiary LifeWatch Corp. generated revenues of USD 26.2 million, representing 93.6% of first quarter 2009 total revenues and an increase of 86% from USD 14.1 million recorded in the prior year period.

Net income of USD 11.0 million in Q1 2009 included a one-time tax benefit of USD 5.6 million, and compares to a net loss of USD 0.7 million in Q1 2008. Diluted earnings per share of USD 0.84 in the quarter included tax benefit of USD 0.43 per share, and compares to a USD 0.06 loss per share reported in Q1 2008 (basic and fully diluted).

Card Guard recorded a balance of cash, cash equivalents, marketable securities and structures in the amount of USD 25.6 million at the end of Q1 2009, up from USD 24.0 at year end 2008.

Dr. Yacov Geva, Chairman and CEO, remarked, “Card Guard recorded a strong increase in revenues during Q1 2009, marking the sixth consecutive quarter of year-over-year growth. Q1 2009 consolidated revenues reached USD 28.0 million, an increase of approximately 75% compared with Q1 2008 revenues of USD 16.0 million. The company also realized strong sequential revenue growth this quarter of 12.9%, driven by the continued market adoption of the ACT offering for wireless cardiac monitoring services at its U.S. subsidiary, LifeWatch Services, Inc. Card Guard also continued to improve its operational costs demonstrated by EBIT margin expansion and net income growth.”

Monitoring Services Card Guard’s Monitoring Services achieved revenues of USD 26.2 million in Q1 2009, an extremely strong increase of 86% over Q1 2008. These impressive results were driven by the LifeStar™ ACT wireless monitoring service and reflect the success of our talented sales force which experienced significant expansion during the quarter. As reported in the Q4 2008 letter to shareholders, Card Guard has shifted its focus to the growing wireless monitoring services.

Sales of Systems The Q1 2009 revenues from our Sales of Systems of USD 1.8 million, decreased as expected of 7% from Q1 2008, due to the weakened demand for capital equipment by hospitals and clinics.

Although we are recording less revenue from sales of products, we see an increasing interest in out-sourcing non-core out-patient services, such as cardiac monitoring, leading to additional opportunities from our hospital customer base.

2009 Guidance Card Guard reiterates its outlook for the full year 2009 with revenue growth greater than 50%, EBITDA margins exceeding 20% and EBIT margins above 16%.

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