EANS-Adhoc: LifeWatch AG: Results for the second quarter 2012 confirm turnaround (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.
--------------------------------------------------------------------------------

3-month report/LifeWatch AG

22.08.2012

+ EBIT of USD 0.04 million and EBITDA of USD 1.04 million;

+ Reduction of total direct and departmental expenses of USD 5.4
million;

+ 30% Headcount reduction;

+ Improved gross margin of 55.1%;

+ Additional 17 new contracts for ACT and HST respectively;

International analyst and media conference and audio web cast on
LifeWatch Q2 2012 financial results

- Wednesday, August 22, 2012 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 web cast
http://services.choruscall.eu/links/lifewatch120822.html

Neuhausen am Rheinfall/Switzerland - LifeWatch AG (SIX Swiss
Exchange: LIFE), the leading provider of wireless telemedicine, today
announces the results for the second quarter 2012. The Company
continues to improve operating profit on EBIT and EBITDA level and
its gross margin. Total department expenses were reduced to 54.9% of
revenues. Furthermore LifeWatch succeeded in closing 17 additional
contracts for its ACT services and Home Sleep Testing, respectively.

You will find a PDF-version of this press release and of the letter
to shareholders with the results of Q2 2012 at the end of this
message.

Second Quarter 2012 Financial Highlights:

- Revenues of USD 19.06 million, compared with USD 20.15 million in Q2 2011.

- Gross margin was 55.1% compared with 43.8% in Q2 2011.

- Total departmental expenses were 54.9% of revenues compared with
86.2% in Q2 2011:

- R&D expenses decreased by approximately USD 0.52 million

- S&M expenses decreased by USD 1.63 million compared with Q2 2011

- G&A expenses decreased by USD 0.49 million from Q2 2011

- EBIT of USD 0.04 million compared with LBIT of USD 8.55 million in Q2
2011.

- EBITDA of USD 1.04 million compared with LBITDA of USD 7.02 million
in Q2 2011.

Managed Care Updates:

LifeWatch continues to prove to providers the value of our cost
effective health monitoring services.

- 17 new contracts for ACT Services

- 17 new contracts for NiteWatch services.

These new agreements represent over 6 million covered lives and
further validate the awareness of payors to provide coverage for
innovative and cost- effective technologies that offer the potential
for better clinical outcomes.

Monitoring Services Updates:

In March 2012 LifeWatch announced a joint development with U.S.
medical technology developer Ansar on a innovative Parasympathetic &
Sympathetic (P&S Monitoring) platform that can be used together with
the ACT III wireless cardiac monitoring system. A total of 8 clinical
sites are currently evaluating the Ansar with ACT monitoring
platform, and a further 20 clinics are very interested in assessing
this technology. The Company is engaged in embedding the Ansar
platform on an innovative wearable sensor for improved
user-friendliness.

The Elite software-defined technology and cardiac monitoring service,
which was launched in Q1 2012, has been widely embraced by physicians
who value the streamlined enrolment and billing processes. The
remotely programmable feature, which allows the platform to operate
as an ACT telemetry system, a 24-48 hour Holter, or a cardiac event
monitor with auto-detect/auto-send functionality, eliminates the need
for a patient to travel back and forth to a physician in order to be
fitted with an additional monitor, thus shortening the time to a
potential diagnosis.

Technology Update:

LifeWatch unveiled the LifeWatch V, the first-of-its-kind healthcare
smartphone, at two launch events in June and July of 2012. The health
and wellness platform generated strong interest from pharma
companies, cellular service providers, distributors and consumers
around the world. With the services embedded on LifeWatch V platform
LifeWatch plan to target this solution to both consumers and to those
with chronic diseases in new geographies. The LifeWatch V operates on
an android operating system that embeds a multitude of miniature
medical sensors and wellness-related applications on the smartphone
which communicates through a cloud-based ecosystem. By using the
barely visible sensors on the phone's frame, patients as well as
health- conscious consumers can track, capture, collect and analyze
their health and medical measurements anywhere anytime. The sensors
include a 1-lead ECG, body temperature, blood glucose, heart rate,
blood oxygen saturation, body fat percentage and stress levels as
well as drug titration and a special diet software program. The
LifeWatch V wirelessly interacts with a cloud-based environment
allowing users direct access to a wide range of valuable
complementary medical and wellness related services. The Company is
expecting partial regulatory approvals by the end of 2012 and is in
discussions with a number of multi-national companies.

Q2 2012 Revenues:

Revenues this quarter reached USD 19.06 million, a decrease of 5.4%
over Q2 2011. On August 1st, the company hired a seasoned
professional, Mark Bogart, as Executive Vice President of Sales at
LifeWatch Services, Inc., our US-based monitoring services business.
Mr. Bogart brings considerable knowledge and business experience in
our industry, having led sales organizations in two similar cardiac
monitoring companies over the past 15 years.

Gross Profit, EBITDA and LBIT:

- Gross profit was USD 10.49 million in Q2 2012, showing an improved margin
of 55.1%, compared with gross profit of USD 8.82 million, with a margin of
43.8% in Q2 2011.

- EBITDA was USD 1.04 million in Q2 2012, compared to LBITDA of USD 7.02
million in Q2 2011.

- EBIT dramatically improved to reach USD 0.04 million this quarter,
compared with LBIT of USD 8.55 million in Q2 2011.

The improved results are mainly a result of the decrease in headcount and
otheroperating expenses.

Net Loss:

LifeWatch reported a net loss of USD 1.38 million compared to a net
loss of USD 10.07 million in Q2 2011. Our net loss was mainly
affected by ,non cash, deferred income tax expenses related to
LifeWatch Services Inc. Loss per share was USD 0.11 (fully diluted),
compared to a loss per share of USD 0.81 (fully diluted) reported in
the second quarter of 2011.

Outlook 2012:

LifeWatch has made considerable progress in improving its
profitability in 2012. The very challenging reimbursement environment
of the U.S. healthcare system and the unforeseeable impact of the
presidential elections in autumn 2012 do not allow any reliable and
precise forecast for full fiscal year 2012. Although the Company will
cope with these strong conditions, we are actively evaluating our new
service and technology offerings and strategic partnerships in order
to create more service and geographical diversification. Thus the
Company will improve its revenue streams and lower its reliance on
reimbursed- based business.

Yacov Geva, Chariman and CEO says: "We feel that with our a proven
track record in technological innovations and remote medical
monitoring and services we are well positioned to meet the challenges
of a fast moving industry and to target new business opportunities
and geographies. We believe that we have a unique experience in
combining technological innovations with providing specific medical
related services. While we also have a lot of experience in regulated
markets, our new LifeWatch V health and life style offering targets
non regulated markets such as consumer health and new geographies
with high revenue potential."

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 remote patient monitoring services. LifeWatch
services cater to individuals, ranging from high-risk and chronically
ill patients, to consumers of health and wellness products. LifeWatch
AG has operative subsidiaries in the United States, in Switzerland
and in Israel and is the parent company of LifeWatch Services Inc.,
and LifeWatch Technologies, Ltd. LifeWatch Services, Inc. is a
leading US-based provider of cardiac monitoring services and home
sleep testing of Obstructive Sleep Apnea (OSA). LifeWatch
Technologies Ltd., based in Israel, is a leading developer and
manufacturer of telemedicine products. The Company is planning to
introduce the LifeWatch V, an Android-based smartphone with medical
sensors and apps that uses a cloud-based service platform. For
additional information, please visit 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"e"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/8OrWIbpx
http://resources.euroadhoc.com/us/9qJNp19Q

Further inquiry note:
Sensus Investor and Public Relations, Zürich:
Tel +41 43 366 55 11 | Fax +41 43 366 55 12 | Email lifewatch@sensus.ch

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

Attachments with Announcement:
----------------------------------------------
http://resources.euroadhoc.com/us/8OrWIbpx
http://resources.euroadhoc.com/us/9qJNp19Q

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: free trade: Berlin, Open Market / XETRA: Frankfurt, Main Standard:
SIX Swiss Exchange
language: English