EANS-Adhoc: LifeWatch is back to profitability (with document)

--------------------------------------------------------------------------------
ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
distribution. The issuer is solely responsible for the content of this
announcement.
--------------------------------------------------------------------------------

Analysts' Comments/LifeWatch AG

01.03.2011

• Revenues increased by 12% to USD 22 m in the fourth quarter 2010

• EBIT of USD 1.9 m and EBITDA of USD 2.5 m in the fourth quarter 2010
• Net income of USD 3.3 m in the fourth quarter 2010
• Net income of USD 0.8 m in full fiscal year 2010

International conference call and audio web cast about LifeWatch AG
results in 2010

• Tuesday, March 1, 2011 at 10:00 a.m. CET
• 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 https://services.choruscall.eu/links/lifewatch110301.html

Neuhausen am Rheinfall/Switzerland - LifeWatch AG (SIX Swiss
Exchange: LIFE), the leading provider of wireless telemedicine, today
announces the results for the fourth quarter 2010 and full fiscal
year 2010 and provides an outlook for 2011. LifeWatch marked the end
of a challenging year with a return to growth and profitability in
the fourth quarter of 2010. Revenues and ACT enrollments increased in
Q4 compared to the prior quarter and both EBIT and EBITDA returned to
positive levels. The Company continues to make improvements in all
areas of its business.

You will find a PDF version of this press release and the letter to
shareholders with the results for the fourth quarter 2010 and full
fiscal year 2010 at the end of this message.

Fourth Quarter 2010 Financial Highlights:

• Revenues of USD 21.9 million, a 11.9% increase from the prior quarter and
a 19.1% decrease year-on-year

• EBIT and EBITDA of USD 1.9 million and USD 2.5 million, respectively, and
a return to profitability

• Excluding one-off restructuring and other costs, EBIT and EBITDA were USD
2.6 million and USD 3.2 million, respectively

• Net Income of USD 3.3 million

• Negative operating cash flow of USD 1.5 million

• Cash, cash equivalents, marketable securities and structures of USD 37.9
million on December 31, 2010

• ACT enrollments of 18,598, a 2.3% increase from the prior quarter and 7.4%
decrease year-on-year

• NiteWatch Home Sleep Test enrollments of 423, a 22.5% decrease from the
prior quarter

Full Fiscal Year 2010 Financial Highlights:

• Revenues of USD 87.1 million, compared to USD 123.0 million in FFY 2009

• LBIT and EBITDA of USD 4.9 million and USD 0.4 million, respectively,
compared to EBIT and EBITDA of USD 26.6 million and USD 32.9 million,
respectively, in FFY 2009

• Excluding one-off restructuring and other costs, LBIT and EBITDA in FFY
2010 were USD 4.3 million and USD 0.9 million, respectively

• Net Income of USD 0.8 million, compared to USD 29.2 million in FFY 2009

• Operating cash flow of USD 8.4 million

• Cash, cash equivalents, marketable securities and structures of USD 37.9
million on December 31, 2010

• ACT enrollments of 77,388, a 4.1% increase from FFY 2009

• NiteWatch Home Sleep Test enrollments of 1,887

Service Enrollments:

During Q4 2010, the Centers for Medicare & Medicaid Services (CMS)
set national pricing guidelines for payment code 93229, which is the
CPT payment code used by Medicare for payment for our ACT service.
The national pricing went into effect on January 1, 2011 and the
reimbursement levels have been in line with expectations. LifeWatch
believes that this development will have a positive impact on its
industry as it increases clarity and brings stability to the
marketplace.

Enrollments for our ACT service were down 7.4% to 18,598 during Q4
2010 compared with 20,081 enrollments in Q4 2009. The decline in
enrollments was primarily due to the impact of Reimbursement Denials.
ACT enrollments in Q4 2010 grew 2.3% from the prior quarter, the
first sequential increase in three quarters. NiteWatch enrollments
declined 22.5% sequentially to 423 enrollments in Q4 2010 from 546
enrollments in the prior quarter. Enrollments have been affected by
changes to the NiteWatch organization during the quarter. Total
enrollments for ACT, NiteWatch, Event and Holter services grew at a
5.6% rate to 59,662 enrollments in Q4 2010 from 56,509 enrollments in
Q4 2009. ACT enrollments for FFY 2010 were up 4.1% to 77,388 compared
to 74,369 in FFY 2009. Total enrollments for ACT, NiteWatch, Event
and Holter services grew at a 3.0% rate to 239,253 enrollments in FFY
2010 from 232,358 enrollments in FFY 2009.

New software version:

LifeWatch recently released a new version of its ACT software. The
new release includes several improvements to the previous version
including:

• Enhanced and more descriptive ACT cell phone messaging
• Simplified customer activation process
• Support of current generation mobile phones with battery life improvement
of 25 - 30%
• New format for daily summary reports and end of session reports

New iPhone application:

The Company also recently released an iPhone application, a complementary

product to the previously released iPad application. Similar to the
iPad application in scope and function, the iPhone application
provides yet another value-added feature to physicians and
cardiologists.

NiteWatch:

As discussed last quarter, NiteWatch has underperformed in 2010 and a
new plan was being developed to "re-launch" the service. To lead our
efforts, the Company appointed Rafi Heumann, a veteran of LifeWatch,
as business leader for NiteWatch. Along with Rafi, the Company has
hired talented individuals to join the NiteWatch team including Amy
Holstead, a former NovaSom executive that will focus on NiteWatch
sales.

Sales Force:

LifeWatch has implemented several meaningful changes to the sales
organization. The Company is aggressively looking to hire talented
individuals and recently has been successful in filling 5 out of the
8 Director of Sales positions. LifeWatch has also hired 15 sales
representatives since the beginning of Q4 2010. As of the end of
January 2011, the U.S. sales force in the U.S. included nearly 90
sales reps.

Third Call Center in the USA:

In February 2011, LifeWatch opened a new office in San Francisco, CA.
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. The Company now operates call
centers in 3 time zones providing redundancy, flexibility and a
competitive advantage in the marketplace.

Revenues:

Revenues decreased 19.1% to USD 21.9 million in Q4 2010 from USD 27.0
million in Q4 2009. The decrease in revenues was primarily due to
Reimbursement Denials and the overall reduction in reimbursement
rates. Revenues in Q4 2010 grew 11.9% from the prior quarter,
primarily due to an increase in enrollments and improvement in the
ACT average selling price. Revenues for FFY 2010 decreased 29.2% to
USD 87.1 million from USD 123.0 million in FFY 2009.

Gross Profit:

Gross profit was USD 13.3 million in Q4 2010 with a margin of 60.9%,
compared with USD 15.7 million with a 58.0% margin in Q4 2009. While
gross profits in Q4 2010 decreased compared to Q4 2009 reflecting a
lower revenue base, gross margins increased due to the impact of
efficiency initiatives. Gross profit in Q4 2010 grew 42.1% from the
prior quarter largely due to increases in enrollments, revenues and
the ACT average selling price. Gross profit in FFY 2010 was USD 43.7
million with a margin of 50.2%, compared with USD 75.2 million with a
61.1% margin in FFY 2009. The decrease in gross profit and gross
margins is largely attributable to the decrease in the overall
average selling prices and the impact of Reimbursement Denials.

Net Income:

Net Income for the fourth quarter of 2010 was USD 3.3 million,
compared with net income of USD 5.9 million recorded in Q4 2009.
Fully-diluted earnings per share were USD 0.25 in the fourth quarter
of 2010 compared with fully-diluted earnings per share of USD 0.45
reported for the fourth quarter of 2009. Net Income for FFY 2010 was
USD 0.8 million, compared with net income of USD 29.2 million
recorded in FFY 2009. Fully-diluted earnings per share were USD 0.06
in FFY 2010 compared with fully-diluted earnings per share of USD
2.22 reported for FFY 2009.

Outlook 2011:

While 2010 has been a challenging year for LifeWatch, we concluded
the year on a positive note and expect to continue the momentum
throughout 2011 and beyond. Our outlook for FFY 2011 is USD 100 - 105
million of revenue, EBIT margin of 10% plus and 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.

Attachments with Announcement:
----------------------------------------------
http://resources.euroadhoc.com/us/KCznsemX
http://resources.euroadhoc.com/us/hKxckGkq

end of announcement euro adhoc
--------------------------------------------------------------------------------

ots Originaltext: LifeWatch AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

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

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