Third Quarter Results

RNS Number:1890W
Spacelabs Healthcare Inc.
08 May 2007


Spacelabs Healthcare, Inc. Third Quarter Results


LONDON -- (MARKET WIRE) -- May 08, 2007 -- OSI Systems, Inc., the majority
shareholder of Spacelabs Healthcare, Inc. (LSE: SLAB) ("Spacelabs" or the
"Company"), today announced its third quarter segment operating results for its
healthcare business.


                       Third     Third             Nine     Nine
                      Quarter   Quarter           Months   Months
                        2007     2006      %       2007     2006      %
                      -------- -------- -------  -------- -------- -------
Revenue               $  53.7m $  49.4m      9%  $ 164.6m $ 161.8m      2%
                      -------- -------- -------  -------- -------- -------
Income (loss) from
 Operations           $ (3.4)m $   1.1m          $ (9.0)m $   8.2m
                      -------- -------- -------  -------- -------- -------



The results for Spacelabs Healthcare are being reported as part of OSI System's
healthcare segment. As such, these results are segment results as defined by
U.S. GAAP, and therefore differ from those that would be reported for Spacelabs
Healthcare on a stand-alone basis. These results do not reflect certain costs
and expenses relating to services provided by OSI Systems to Spacelabs
Healthcare during the quarter.

Operational Summary for Third Quarter of Fiscal 2007


--  Third quarter fiscal 2007 revenue of $53.7 million, an increase of 9%
    from $49.4 million in the third quarter of fiscal 2006. Excluding revenue
    from Del Mar Reynolds ("DMR"), acquired July 2006, underlying revenues
    decreased by 8%. Revenues and operating income were negatively impacted by
    weaker than expected patient monitoring sales in the U.S.
    
--  OSI Systems announced that it expects Spacelabs Healthcare to be
    profitable in the fourth quarter of fiscal 2007. This is due to cost
    savings implemented and management's visibility.
    
--  Rationalization of facilities and reduction of headcount associated
    with the integration of DMR and global review of the Company's cost
    structure is nearly complete with the Company expected to have the majority
    of the previously announced $10 million of annualized cost savings
    implemented by the end of the fiscal year. The benefit of the cost savings
    will begin to be evident in the fourth quarter with the full benefit
    expected in fiscal 2008.
    
--  The Company has expanded its presence in the Asia Pacific region with
    execution of a lease on a new facility in China. The new facility, expected
    to begin operation in the fiscal 2008, will increase the Company's
    competitiveness in the emerging market environment of China, India and
    Latin America while also improving the Company's gross margin through
    supply chain efficiencies.
    
--  The Company remains committed to R&D. In the third quarter of fiscal
    2007, R&D spending increased 42% compared to the third quarter of fiscal
    2006. In the third quarter of fiscal 2007, the Company announced the launch
    of two new diagnostic cardiology products and the receipt of 510k clearance
    for the distribution of its Diagnostic Data Management System in the U.S.
    
--  In the third quarter, OSI Systems reached a $15.0 million settlement
    in its dispute with GE Healthcare Finland Oy regarding working capital
    adjustments and other matters arising from OSI's March 2004 acquisition of
    Spacelabs Medical. Under U.S. GAAP, the settlement, net of $0.6 million of
    legal costs, will be recorded as Other Gains on Spacelabs' income
    statement, and therefore is not reflected in the segment operating results
    reported by OSI Systems for the third quarter of fiscal 2007.  Proceeds
    received from GE resulted in a corresponding reduction of $14.4 million
    from the outstanding inter-Company loan from OSI Systems. At the end of the
    third quarter, the outstanding loan payable to OSI Systems was
    approximately $14.0 million. As a result, interest expense in the fourth
    quarter is expected to be reduced.

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements include information
regarding the Company's expectations, goals or intentions about the future,
including, the Company's predictions about the size and effect of its
cost-cutting measures, steps being taken to improve profitability and future
revenues. The actual results may differ materially from those described in or
implied by any forward-looking statement. In particular, there can be no
assurance that cost-cutting measures will ultimately result in savings that are
in line with current expectations, that the Company will achieve profitability
or that future revenues predictions will ultimately prove accurate. Other
important factors are set forth in our Securities and Exchange Commission
filings. All forward-looking statements speak only as of the date made, and we
undertake no obligation to update these forward-looking statements.

For further information, please contact:

Spacelabs Healthcare Inc
Jeremy Norton
Director of Investor Relations
Tel: + 1 [phone]

Financial Dynamics
Ben Atwell/John Gilbert
Tel: + 44 (0) 20 7269 7242



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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