BOTHELL, Wash., July 19 /PRNewswire-FirstCall/ -- Cardiac Science
Corporation (Nasdaq: CSCX), a global leader in automated external
defibrillator (AED) and diagnostic cardiac monitoring devices,
announced it has addressed outstanding issues with the Food and
Drug Administration ("FDA") relating to the corrective AED field
action announced on November 13,
2009. The FDA has issued an updated communication on this
matter which may be viewed at
http://www.fda.gov/MedicalDevices/Safety/AlertsandNotices/ucm191426.htm.
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Under the updated recall plan, Cardiac Science will replace
approximately 24,000 AEDs used by first responders and certain
medical facilities in the United
States. First responders include police, fire, and ambulance
services. Medical provider facilities include hospitals, medical
clinics, dialysis centers and assisted living facilities.
"We have worked constructively with the FDA to address their
concerns and are pleased to bring this matter to a close. We are
now focused on executing the updated recall quickly and
effectively," said Dave Marver, Cardiac Science president and chief
executive officer.
The Company estimates this plan will add between $10 and $15 million to the $18.5 million expense previously accrued for the
November, 2009 recall. The Company expects to take a charge to
earnings in the second quarter within this range. Cash expenditures
related to this updated recall plan are expected to occur over the
next twelve months or more. The Company has executed an updated
agreement with Silicon Valley Bank, increasing its line of credit
from $5 million to $15 million and
will use borrowings from this line, in combination with existing
cash resources, to carry out this updated recall plan.
The Updated Recall Plan
Under the updated recall plan, Cardiac Science will repair or
replace approximately 24,000 AEDs used by first responders and
certain medical facilities in the U.S. AED use by these customers
is likely to be more frequent due to the nature of the settings in
which the AEDs are employed and the involvement of professionally
trained caregivers. More frequent use of affected AEDs may
introduce a slightly higher probability that the component issue
that led to the November 2009 recall
will be encountered during a rescue attempt.
All other AEDs affected by the November
2009 recall require only the Company's previously announced
software update. This update enhances the AED's self-test
capabilities and improves detection of the component issue such
that the probability of failure of these devices during a rescue
attempt is significantly reduced. The Company has notified affected
customers and the software update is currently available for all
affected AEDs. For most models, the update is available online at
www.cardiacscience.com/aed175. Cardiac Science urges all users,
including those who will receive replacements, to install the
software update for their affected AED(s) as soon as possible.
Cardiac Science will immediately begin notifying U.S. based
first responder and medical facility customers eligible for
replacement units. Replacements will be scheduled as soon as
possible, with first priority given to police, fire, and ambulance
service customers.
The determination whether replacement units are appropriate for
first responders and/or medical facilities outside the U.S. will be
made through discussions with local regulatory authorities. These
authorities have previously accepted the software update as the
appropriate action for all customers, including first responders
and medical facilities. The number of units subject to the updated
plan outside the U.S., if any, will affect costs within the
estimated range.
Customers inside the US may call 877.901.1788 for more
information. Customers outside the US may call +44.161.926.0011, or
contact their local Cardiac Science representative.
Conference Call Scheduled at 1:00 pm
EDT Today
Cardiac Science will conduct a conference call today at
1:00 p.m. Eastern Daylight Time to
discuss today's news. The call will be hosted by Dave Marver,
president and chief executive officer, and Mike Matysik, senior vice president and chief
financial officer.
To access the conference call, please dial 877.941.0844 and
reference conference ID 4331134. Callers outside the U.S. can dial
480.629.9645. The call will also be webcast live at
www.cardiacscience.com. An archive of the webcast will also be
available at www.cardiacscience.com for 90 days.
Forward-Looking Statements
This press release contains forward-looking statements. The
words "believe," "expect," "intend," "anticipate," variations of
such words, and similar expressions identify forward-looking
statements, but their absence does not mean that the statement is
not forward-looking. Forward-looking statements in this press
release include, but are not limited to, those that refer to the
number of AEDs expected to be repaired or replaced under the
updated recall plan, the timing of replacement, the resolution of
regulatory concerns in both the U.S. and foreign jurisdictions, the
effectiveness of the software update, the risk of component
failure, the timing and amount of expenses to be recorded in the
Company's financial statements relating to the repair and
replacement of affected AEDs, the timing and amount of associated
cash expenditures and the sufficiency of the Company's line
of credit with Silicon Valley Bank, together with existing cash, to
fund the recall. These are forward-looking statements for purposes
of the safe harbor provisions under the Private Securities
Litigation Reform Act of 1995. Actual results and performance may
vary significantly from those expressed or implied in such
statements. Factors that could cause or contribute to such varying
results and other risks include the outcome of discussions or
negotiations with applicable regulatory bodies in geographies
outside the U.S., additional regulatory issues that may arise in
the course of our business due to the fact that we remain subject
to the oversight of the FDA and other regulatory bodies, the extent
to which AED units recovered from affected customers can be
repaired and used as replacement units for other customers, the
availability of financial resources to perform the replacements and
other actions described herein, as well as those more fully
described in the Annual Report on Form 10-K filed by Cardiac
Science Corporation for the year ended December 31, 2009, as updated by subsequent
quarterly reports on Form 10-Q. Cardiac Science Corporation
undertakes no duty or obligation to update the information provided
herein.
For more information,
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Company Contact:
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Investor Contact:
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Media Contact:
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Mike Matysik
Cardiac Science
Corporation
Senior Vice President and
CFO
425.402.2009
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Matt Clawson
Allen & Caron
949.474.4300
matt@allencaron.com
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Christopher Gale
EVC Group Inc.
646.201.5431
203.570.4681
cgale@evcgroup.com
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CSCX-F
SOURCE Cardiac Science Corporation