Andrew Kersey, president and chief executive officer of the company said, The worldwide economic downturn that started to impact the business late in the fourth quarter of 2008 continued to affect the results for the first quarter of 2009. The decline in year-over-year sales was primarily related to lower sales of capital equipment monitoring products, particularly in the international arena. We remain confident that many of these hospital capital purchases have merely been delayed, although the exact timing of these orders remains uncertain.

I am pleased that, despite the revenue shortfall, we did experience several bright spots during the quarter that give us increased confidence for future business. Bookings for the quarter recovered well, exceeding plan, and provided a healthy shippable backlog of $2.2 million entering the second quarter. Sales of the vital signs monitors to the Department of Veterans Affairs also performed well during the quarter and we are pleased with the recent sales activity with this key customer. We continue to make progress on FORE-SIGHT(r) with revenue for the quarter increasing to $885,000. The majority of monitors installed were sold, rather than placed, and sensor revenue and utilization per monitor continued to trend well.

During the quarter the company announced 510(k) clearance of the FORE-SIGHT pediatric sensor which, along with the new Non-Adhesive Small Sensor launched this past month, expands the breadth of patients within the hospital able to benefit from using this technology. Additionally, abstracts recently presented confirm the link between FORE-SIGHT cerebral tissue oxygen saturation measurements and short- and long-term patient outcomes, and observed that FORE-SIGHT measurements are three times more accurate than those of the competitive product, added Kersey.

Financial Results for Q1

Revenues of the company for the first quarter ended March 31, 2009 decreased 6% or $556,000 to $8.4 million when compared to sales of $9.0 million for the first quarter of 2008. Shortfalls in sales of bedside monitoring products and blood pressure cuffs were partially offset by increases in OEM sales and FORE-SIGHT cerebral oximeter monitors and sensors.

For the first quarter of 2009, the Company recorded a net loss of $903,000, or ($0.08) per basic and diluted common share, compared to a net loss of $530,000, or ($0.05) per basic and diluted common share for the first quarter of 2008. For both periods, sales were below expectations resulting in higher fixed manufacturing costs as a percentage of sales and reduced gross profit levels.

Operating expenses for the first quarter of 2009, increased $305,000 or nearly 9% to $3.8 million from $3.5 million reported for the first quarter of 2008, primarily from increases in FORE-SIGHT related R&D and sales and marketing expenses.

While we remain cautious of the economic outlook, we are nevertheless confident that the products offer superior solutions, and that sales will recover, added Kersey. We believe we have funding available to meet the expected requirements this year, and have taken additional measures to reduce spending and cash outlays. Effective May 2009 we have initiated selective reductions in staff and lowered overall wage levels, which will save around $1 million on an annualized basis. We do not believe these personnel reductions will compromise the sales or development efforts.