Cardiac Science Reports Q2 Revenue; Resumes AED...(ensation expense was negative $1.2 milli...),Health

The Company generated $0.5 million in cash from operating activities during the second quarter and had $37.9 million in cash and cash equivalents as of June 30, 2009.

Outlook

The Company expects revenue for the third quarter of 2009 to be in a range between $37 million and $40 million. Actual revenue will be dependent, in part, on how quickly the Company is able to ramp up AED production and fulfill the order backlog that accumulated while shipping was suspended, as well as new orders that are received during the third quarter.

Profitability and cash flow levels for the quarter will be adversely affected by the AED ship-hold, including manufacturing inefficiencies, product re-work and testing and professional services associated with evaluating the related quality issues. The Company will also incur higher regulatory and quality assurance expenses as it upgrades its internal capabilities in this area. In addition, the Company expects to incur higher research and development and marketing expenses associated with product development initiatives.

Profitability and cash flows for the quarter may also be adversely impacted if the Company determines that a corrective action is required to address AED component issues in the field. While the Company has not yet determined whether a field action may be required, such action, if necessary, could cost between $10 and $20 million, depending on the nature of the action, the number and location of affected units and other factors, although there can be no assurance that the cost of an action, if required, would fall within this range.

Excluding expenses relating to a possible field action, the Company expects to report a net loss for the quarter in a range between $0.10 and $0.14 per share.

Non-GAAP and Pro Forma
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