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Patient Safety Technologies Reports Fourth Quarter and Year End 2008 Results
Date:4/20/2009

Fourth Quarter 2008 Revenues more than tripled to $843 thousand

2008 Annual Revenues Increased 155% to $2.8 million

TEMECULA, Calif., April 20 /PRNewswire-FirstCall/ -- Patient Safety Technologies (OTC Bulletin Board: PSTX) today announced record quarterly and annual revenues for the quarter and year ended December 31, 2008.

"We are pleased to announce record fourth quarter and fiscal year end revenues for our SurgiCount Safety-Sponge System. We believe this is evidence that our customer value proposition, reducing avoidable surgical complications resulting in reduced hospital expenses, is enjoying acceptance. With over 300,000 procedures performed through 2008 and key peer-reviewed papers demonstrating its effectiveness, the Safety-Sponge has been shown to virtually eliminate retained surgical sponge events. With penetration of approximately 1% of surgical procedures in the US, the opportunity for continued growth is substantial," stated David Bruce, Chief Executive Officer of Patient Safety Technologies.

Fourth Quarter Results

Revenues for the fourth quarter 2008 were $843 thousand, an increase of 231% from the $255 thousand reported for fourth quarter 2007. Fourth quarter 2008 gross margin of 45% increased over fourth quarter 2007 gross margin of 21%. Loss from continuing operations for the fourth quarter 2008 was $630 thousand compared a loss of $2.1 million for the 4th quarter of 2007.

Fiscal Year End 2008

Revenues for the full year in 2008 were $2.8 million, an increase of 155% from the $1.1 million reported for fiscal year 2007. Gross profit for 2008 was $978 thousand, an increase of $605 thousand over the $373 thousand reported for 2007. Loss from continuing operations for the full year 2008 was $4.4 million compared a loss of $7.0 million in 2007. Loss per share dropped from ($0.72) in 2007 to ($0.31) in 2008.

"The company made substantial progress in 2008 by launching commercialization of the Safety-Sponge System from product refinements to building its sales and clinical support organizations. We see substantial opportunities for continued market penetration and are working closely with our distribution partners to educate and convert customer prospects," said Mr. Bruce.

About Patient Safety Technologies, Inc. and SurgiCount Medical, Inc.

Patient Safety Technologies, Inc., through its subsidiary SurgiCount Medical, Inc., develops and markets the SurgiCount Safety-Sponge System. The Safety Sponge system is designed to reduce the number of retained sponges and towels unintentionally left in patients during surgical procedures, one of the most common avoidable errors in surgery. The System is a patented turn-key line of modified surgical sponges, SurgiCounter(TM) scanners, and software file and database elements integrated to form a comprehensive counting and documentation system. For more information, contact SurgiCount at (951) 587-6201, or visit www.surgicountmedical.com.



    PATIENT SAFETY TECHNOLOGIES, INC.
    CONSOLIDATED STATEMENT OF OPERATIONS
    (in thousands, except per share date)

                     Three Months Ended December 31, Year Ending December 31,
                          2008    2007 (Restated)    2008    2007 (Restated)

    Revenues                $843          $255       $2,780        $1,089
    Cost of revenue          460           203        1,802           716
    Gross profit             383            52          978           373

    Operating expenses:
      Research and
       development           103            42          271           133
      Sales and
       marketing             720           720        2,516         1,811
      General and
       administrative      1,527           941        5,206         3,730
          Total operating
           expenses        2,350         1,703        7,993         5,674

    Operating loss        (1,967)       (1,651)      (7,016)       (5,301)

    Other income
     (expenses):
      Liquidated damages       -          (194)           -          (194)
      Interest expense       (79)          (81)        (333)       (1,496)
      Change in fair
       value of warrant
       liability           1,067             -        2,582             -
      Realized gain
       (loss) assets
       held for sale, net    (66)            -          (91)           22
      Unrealized loss
       on assets held
       for sale, net          65           (25)           -           (25)
      Other income             8            (3)          44            (3)
    Total other income
     (expense)               995          (303)       2,202        (1,696)

    Loss from continuing
     operations before
     income taxes           (972)       (1,954)      (4,813)       (6,997)
    Income tax provision     342          (121)         439           (31)
    Loss from continuing
     operations             (630)       (2,075)      (4,374)       (7,028)

    Loss from discontinued
     operations                -             -            -          (166)
    Net loss                (630)       (2,075)      (4,374)       (7,194)
    Preferred dividends      (19)          (19)         (77)          (77)
    Net loss applicable
     to common
     shareholders          $(649)      $(2,094)     $(4,451)      $(7,271)

    Basic and diluted
     per common share:
    Continuing
     operations           $(0.05)       $(0.22)      $(0.31)       $(0.70)
    Discontinued
     operations               $-            $-           $-        $(0.02)
    Net income (loss)     $(0.05)       $(0.22)      $(0.31)       $(0.72)

    Weighted average
     common shares
     outstanding:
         Basic and
          diluted         13,588         9,501       14,452        10,067



    PATIENT SAFETY TECHNOLOGIES, INC.
    BALANCE SHEET
    (In thousands, except par value)

                                         For the Year Ending December 31,
                                            2008       2007 (Restated)

                  Assets

    Current assets:
        Cash and cash equivalents           $296             $405
        Accounts receivable                  418              104
        Inventories                          200                -
        Prepaid expenses                     188              105

            Total current assets           1,102              614

    Restricted certificate of deposit         94               88
    Notes receivable                         121              121
    Property and equipment, net              622              663
    Assets held for sale, net                  -              406
    Goodwill                               1,832            1,832
    Patents, net                           3,439            3,764
    Long-term investment                     667              667
    Other assets                              37               19

            Total assets                  $7,914           $8,174


                Liabilities and Stockholders' Equity

    Current liabilities
        Accounts payable                    $909             $709
        Current portion of convertible
         debentures                        1,425              572
        Current portion of notes
         payable                           1,100              600
        Accrued liabilities                3,358            1,193

            Total current liabilities      6,792            3,074
        Long-term convertible debentures,
         less current portion                 51            2,531
        Deferred tax liabilities           1,042            1,500

            Total liabilities              7,885            7,105


    Stockholders' (deficit) equity:
        Convertible preferred stock,
         $1.00 par value, cumulative 7%
         dividend: 1,000 shares authorized;
         11 issued and outstanding at
         December 31, 2008 and 2007
         (Liquidation preference of
         $1.2 million at December 31, 2008
         and 2007                             11               11
        Common stock, $0.33 par value:
         25,000 shares authorized;
         17,180 shares issued and
         outstanding at December 31,
         2008; 12,055 shares issued and
         outstanding at December 31,
         2007                              5,675            3,978
        Additional paid-in capital        36,034           34,320
        Accumulated deficit              (41,691)         (37,240)

            Total stockholders'
             equity                           29            1,069

            Total liabilities and
             stockholders' equity         $7,914           $8,174


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SOURCE Patient Safety Technologies, Inc.
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