# UNITED STATESSECURITIES AND

EXCHANGE COMMISSION  WASHINGTON, D.C. 20549

# FORM 10-K

(MARK ONE)

[X]       
          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
          OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 28, 2003

OR

[ ]       
          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM..................TO.........................

# COMMISSION FILE NUMBER
0-20225

# ZOLL MEDICAL
CORPORATION

(Exact name of
registrant as specified in its charter)

|MASSACHUSETTS                   |  | 04-2711626                          
|------------------------------- |  | ------------------------------------
|(State or other jurisdiction of |  | (I.R.S. Employer Identification No.)
|incorporation or organization)  |  |                                     

|269 MILL ROAD, CHELMSFORD, MASSACHUSETTS |  | 01824     
|---------------------------------------- |  | ----------
|(Address of principal executive offices) |  | (Zip Code)
|                                         |  |           

Registrants
telephone number, including area code (978) 421-9655

Securities registered pursuant to
Section 12(b) of the Act:

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|None                |  | None                                     

Securities registered pursuant to Section
12(g) of the Act:

| |                              | 
| | ---------------------------- | 
| | Common Stock, $.02 Par Value | 
| | Common Stock Purchase Rights | 
| | (Title of class)             | 

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ].

Indicate by check mark if disclosure
of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [X] No

The aggregate market value of the
voting stock held by non-affiliates of the registrant as of March 30, 2003 was
$317,444,140 based on a closing sales price of $41.00 per share as reported for the
NASDAQ-composite transactions.

The number of shares of the
registrants classes of common stock outstanding, as of December 9, 2003 was
9,136,595.

DOCUMENTS INCORPORATED
BY REFERENCE

Portions of the definitive Proxy
statement dated on or about December 19, 2003 to be delivered to shareholders in
connection with the Annual Meeting of Shareholders to be held February 11, 2004 are
incorporated by reference into Part III.

---

# PART I

# Item 1. Business.

# Overview

We design, manufacture and market an
integrated line of proprietary, non-invasive cardiac resuscitation devices, including
external defibrillators/pacemakers, as well as disposable electrodes and emergency medical
system software data management solutions. Our cardiac resuscitation products are designed
to improve survival rates from sudden cardiac arrest, which is a leading cause of death in
the United States. There are over 460,000 deaths each year from out-of-hospital cardiac
arrest in the United States. Estimates say that more than half of these deaths occur
suddenly. For victims of sudden cardiac arrest, time is the most critical element for
survival. According to the American Heart Association (AHA), more than 95% of
victims of sudden cardiac arrest die, in many cases because life-saving defibrillators
arrive on the scene too late, if at all. Additionally, our products aid those collapsed
victims who might benefit from cardiopulmonary resuscitation (CPR) or improved
circulation.

The importance of immediate treatment
creates an annual worldwide market for external defibrillator products, which we estimate
to have been approximately $854 million in 2003. We divide this market into three
principal areas: the hospital, pre-hospital and public access defibrillation markets. The
hospital market consists of doctors, nurses and other medical personnel who use
defibrillators in hospital settings. The pre-hospital market consists of care providers
such as paramedics, ambulance operators, emergency medical technicians, medically-trained
firefighters, emergency medical personnel, and police. The public access market includes
non-traditional providers such as security guards, factory staffs, and other non-medically
trained personnel.

We believe that ZOLLs market
share in some of the key markets is approximately 35% in North American Hospitals, 30% in
North American emergency medical services ("EMS"), and 13% in the international portion of the market. We also believe we
have an approximate 9% market share of the automated external defibrillator ("AED") market.

Our main line of defibrillators is
the M Series. M Series defibrillators are smaller and lighter than competitive
products, making them easier to use, carry and transport. In fiscal 2000, we began
shipping M Series defibrillators equipped with our proprietary biphasic waveform which
provides improved defibrillation efficacy as compared to conventional monophasic
waveforms. We have received clearance from the U.S. Food and Drug Administration
(FDA), to label our M Series defibrillators equipped with our biphasic
waveform as being clinically superior to defibrillators with a monophasic waveform for
particular uses. We are the only company to have received a claim of superiority on its
biphasic waveform. We believe the clinical superiority of our biphasic waveform combined
with product advantages including small size, light weight, and relative ease-of-use offer
compelling reasons for customers to choose our products.

In addition, we see a large opportunity
to improve resuscitation technology and outcomes by moving beyond electrical defibrillation
and pacing to include circulatory support. Our AED Plus with instantaneous CPR feedback is an
 important element to address this opportunity. In March 2002, we introduced the AED
Plus with instantaneous CPR feedback, a simplified, lower cost
AED designed for the infrequent user, and developed to assist
the user in defibrillation and CPR. The device incorporates a number of unique and
proprietary elements designed to provide more comprehensive support for infrequent
rescuers. The device includes a highly simplified graphical user interface, one-piece
electrode pads, easily obtained consumer batteries for operation, and instantaneous
feedback to rescuers on CPR performance.

We believe feedback for infrequent
 users performing CPR is an important addition to an AED in the context that a shock is required
initially for only about one-half of victims of sudden collapse. When defibrillation is
not required initially, if survival is to be improved, the critical rescuer action is to
provide CPR support. CPR is often associated with a return of a shockable
ventricular rhythm, making defibrillation possible later in the event. Rescuers usually do
not know whether defibrillation is the immediate and appropriate therapy or whether CPR is
required until after the AED is attached and the victims electrocardiogram (ECG) is analyzed. Rescuers
therefore must be capable of both using the AED and providing temporary circulatory
support with CPR.

# Our Business Strategy

The cardiac resuscitation market is a
large and growing market driven by a demonstrated and increasing clinical need. Our
business strategy is to continue to gain an increased share in both the domestic and
international markets by offering superior products and through strengthening our
distribution. While we plan to increase our share in markets that we currently serve, we
also seek future growth by entering into new markets with significant opportunities. We
believe that the following elements of our strategy may provide current and longer-term
growth to our business.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Continue to Expand Successful Sales of M Series Defibrillators. A major element of our business strategy is to capitalize
         on the success of the M Series defibrillators in order to increase our market share in the hospital and pre-hospital
         markets. To date, the M Series is our best selling defibrillator. We plan to increase our profits in this segment by
         expanding our presence in both the domestic and international markets by:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |   |     hiring additional salespeople;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |   |     moving from selling through a distributor to selling direct in international markets of a significant size and where
                market share is low; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |   |     increasing distributor sales in emerging markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |   | We also plan to increase profits by selling additional monitoring and display capabilities on the M Series CCT (Critical Care Transport). In
         combination with its small size and weight, the new feature set will make it a likely substitute for a "transport monitor"
         because the defibrillator and monitor are integrated into one portable unit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Compete in Public Safety and the Public Access Defibrillation Markets with a Well-Differentiated Device. We have brought
         to market the AED Plus, a device for the large and relatively untapped public access defibrillation market. Our device is
         relatively low-cost and easy to operate. We believe we can leverage our experience selling to
         EMS personnel in our efforts to sell our device to first responders such as police and firemen. We also market our
         device to other non-traditional providers of healthcare and have agreements with more than 200 independent distributors
         and manufacturers' representatives selling our device. In June 2002, we signed an exclusive multi-year distribution
         agreement with GE Medical Systems Information Technologies for the sale of our AED Plus to physicians' offices and
         clinics throughout the U.S. This partnership affords us an excellent opportunity to expand into a relatively
         un-penetrated market.
|
| |  | Seek Additional Growth Opportunities in the EMS Data Management Market. We believe that the market for EMS data
         management solutions is significant and relatively un-penetrated. We are currently selling several products to this
         market. We have delivered an integrated dispatch, clinical information, data collection, data transfer, billing and
         quality assurance software solution for sale to the EMS market. We intend to leverage our existing relationships with
         purchasing decision-makers in this market to sell our data management solutions. We intend to expand the sale of our
         products into the public safety area. We believe our software solution will be differentiated by our ability to offer a
         complete data management solution that incorporates the clinical information collected by our defibrillators.                                                                                                                                               
|
| |  | Seek Additional Opportunities in the Area of Resuscitation. We believe there are additional untapped opportunities in the
         area of resuscitation outside of our core business. We plan to broaden our product offering beyond the "shock" in the
         future. This may include investing in the securities of other companies and participating in joint venture agreements.
         Additionally, we have made investments in LifeCOR, Inc., manufacturer of the LifeVest Wearable Defibrillator, Revivant
         Corporation, manufacturer of the AutoPulse Resuscitation System, and Advanced Circulatory Systems, Inc, manufacturer of
         the ResQPOD Circulatory Enhancer for Cardiac Arrest. With our extensive and experienced sales organization, these
         products have the potential to expand our sales in our current markets.                                                                                                                                                                     
|

# Overview of Sudden
Cardiac Arrest and Resuscitation Therapies

Sudden cardiac death results from the
unresuscitated, sudden, abrupt loss or disruption of heart function. This loss of heart
function, also known as sudden cardiac arrest, is caused by the heart beating too rapidly
and/or chaotically, ventricular fibrillation, or cardiac standstill from other
non-fibrillation dysrhythmias such as pulseless electrical activity. The Center for
Disease Control estimates deaths from sudden cardiac arrest at more than 460,000 per year,
making it a leading cause of death in the United States. According to the AHA, early
defibrillation of ventricular fibrillation is the single most critical factor in rescuing
a victim of sudden cardiac arrest. Each minute of delay in returning the heart to its
normal pattern of beating decreases the chance of survival by 7% to 10%.

The Human Heart. The normal
human heart has four chambers and expands and contracts over 100,000 times each day. The
two smaller, upper chambers are the atria and the two larger, lower chambers are the
ventricles. The walls of the atria and the ventricles are made up of cardiac muscle which
contracts rhythmically when stimulated by an electrical current. Normally, the heartbeat
starts in the right atrium when a specialized group of cells sends an electrical signal.
This signal spreads through the atria and then moves to the ventricles. As a result, the
atria contract a fraction of a second before the ventricles. This exact pattern must be
followed to ensure that the heart beats properly. This contraction and relaxation of the
four chambers pumps blood to the lungs and the rest of the body. Arrhythmias are abnormal rhythms of
the heart caused by insufficient circulation of oxygenated blood, drugs, electrical shock,
mechanical injury, disease or other causes. The three types of arrhythmias that
defibrillators and pacemakers treat are ventricular fibrillation, atrial fibrillation and bradycardia. It
is possible for a patient to experience more than one type of arrhythmia during a sudden
cardiac arrest. In these situations, it is important to have resuscitation equipment that
has both defibrillation and pacing capabilities. If defibrillation or pacing is not
indicated in a patient the appropriate therapy is CPR.

Ventricular Fibrillation.
Ventricular fibrillation is a condition in which disordered electrical activity causes the
ventricles to contract in a rapid, unsynchronized and uncoordinated fashion. When this
occurs, an insufficient amount of blood is pumped from the heart. Ventricular fibrillation
is the most common arrhythmia that causes sudden cardiac arrest. The onset of ventricular
fibrillation often occurs without warning and causes the heart to stop abruptly. This
sudden stopping of the heart is known as cardiac arrest, and is the cause of sudden
cardiac death.

The only accepted treatment for
ventricular fibrillation is defibrillation, in which a powerful electric shock is
delivered to the heart to stop the fibrillation and permit the return of coordinated
cardiac contractions. In emergency situations, external defibrillation has conventionally
been administered through hand-held paddles placed on the patients chest. However,
external defibrillation can also be administered through disposable adhesive electrodes,
which we believe are safer and easier to use than paddles.

In sudden unexpected cardiac arrest,
current research shows that by the time a device arrives at the side of an arrest victim,
about half are in ventricular fibrillation which requires immediate defibrillation
according to current AHA recommendations. However, new research suggests that CPR before
defibrillation in unwitnessed cardiac arrest may be more effective than immediate
defibrillation and the AHA is expected to review their current recommendations relating to
CPR and defibrillation during the development of new guidelines in 2004. With increased
understanding of the mechanisms of cardiac arrest, the benefits of CPR, new technologies
to improve circulatory support, and the lower incidence of ventricular fibrillation, we
expect a growing emphasis on circulatory support in both the context of AED use and the
AHAs efforts to reduce deaths from sudden cardiac arrest.

Atrial Fibrillation. The AHA
estimates that close to 2 million Americans suffer from atrial fibrillation. Atrial
fibrillation is a condition in which disordered electrical activity causes the atria to
contract in a rapid, unsynchronized and uncoordinated fashion. This inefficient
contraction results in a smaller amount of blood entering the ventricles, which in turn
results in an insufficient level of circulation. Since blood is not pumped completely out
of the atria, the blood can pool and clot. While not immediately life threatening, atrial
fibrillation can lead to significant health threats such as stroke. Over time, poorly
functioning atria can also cause the ventricles to work harder, wear out sooner and
eventually lead to cardiac arrest.

Common forms of treatment for atrial
fibrillation include cardioversion and drug therapies. During cardioversion, a
defibrillator delivers an electric shock that is synchronized with a patients
heartbeat in order to return the atria to a normal rhythm. Cardioversion is usually an
elective therapy, scheduled and performed in a controlled environment. All of our manual
defibrillators include cardioversion capability.

Bradycardia.    
          Bradycardia is a condition in which the heart beats too slowly. The principal
          therapies for the emergency treatment of bradycardia are drugs and temporary
          cardiac pacing, either or both of which may be used to stimulate effective
          cardiac contractions and restore circulation. Cardiac pacing utilizes an
          electrical pulse to stimulate the patients heartbeat. For the emergency
          treatment of bradycardia, there are two primary techniques for temporary pacing:
          invasive endocardial pacing, in which a wire is inserted directly into the heart
          to provide the electrical stimulus; and non-invasive temporary pacing, which
          uses gelled electrodes applied to the patients chest to conduct an
          electrical stimulus. Non-invasive temporary pacing is an option on most of our
          defibrillators (not including AEDs) and is recommended as the first intervention
          for bradycardia in the AHAs resuscitation protocols.

---

# Our Cardiac
Resuscitation Products

# M Series Defibrillators

The M Series is an extensive line of
defibrillators for both the hospital and pre-hospital markets. We currently sell 11 models
of this device ranging in list price from $5,500 to $31,000. The large number of models
reflects user selection and need for various features and options such as shock advisory
capability, 12 lead ECG and diagnostic operation, or data transmission features. The M
Series defibrillator is our best selling product to date and has been selected as the
standard device in such places as The Mayo Clinic, Scripps Health System, The Johns
Hopkins Hospitals, the U.S. Armed Forces, and the German Army. We believe the clinical
superiority of our biphasic waveform combined with product advantages including
portability, ease-of-use and the vivid screen display offer compelling reasons for
customers to choose our M Series defibrillators. Our M Series is a standardized platform
that allows for expandable features. As a result, we believe that this will help maximize
customer retention by reducing the need for operator retraining and enhancing operator
confidence.

We believe that our standard M Series
defibrillators offer the following competitive advantages.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Portability. The M Series defibrillator is the smallest, lightest fully-featured external defibrillator. It is
         significantly less in size and weight than other leading devices in this class. This allows M Series defibrillators to be
         easily used, carried, and transported with patients.                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Ease-of-use with Simple Controls. The M Series defibrillators enable users to efficiently configure each unit, allowing
         local operating preferences to be individually programmed into each unit. Additionally, M Series defibrillators offer
         multiple language labeling as well as multiple language voice prompts to meet both domestic and international needs.                                                                                                                                                                                                                                                                             
|
| |  | Vivid Screen Display. One of the distinguishing features included in M Series defibrillators is their high contrast
         screen. Our screen incorporates the most technologically advanced defibrillator display with a wider viewing angle than
         any LCD display.                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Clinical Performance.  Our proprietary pacing technology was demonstrated clinically to have therapeutic advantages over
         other manufacturers' designs. A number of clinical studies formed the basis for this superiority. In the area of
         defibrillation waveforms, the ZOLL Rectilinear Biphasic ("RLB") Waveform is the only biphasic waveform to have clinically
         demonstrated superiority to monophasic waveforms for the defibrillation of ventricular fibrillation in high impedance
         patients, and it has also been shown to be superior in the cardioversion of atrial fibrillation than monophasic
         waveforms.

The M Series defibrillators are
designed to be upgradeable, allowing customers to add features depending upon their
individual needs. The M Series defibrillators use our unique pacing technology, which has
been clinically shown to provide superior capture rates, lower mean capture thresholds,
less muscle impact and better patient tolerance. The M Series defibrillators are also
available with our patented biphasic waveform. Some of the features that we currently
offer include the following.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Complete Data Management. A code marker system follows protocols established by the AHA and allows complete documentation
         of an event with our unique "one touch" data annotation feature. The record made of the event includes all information
         collected by the defibrillator and can be upgraded to include an optional voice recording. All of this data is stored on
         a removable data card. This data is also able to be transmitted electronically to other devices via a serial port, built
         in modem and Bluetooth® wireless communications.  This allows users significant flexibility in moving data for purposes
         of remote consultation and recordkeeping. We have also developed software applications for the archiving and trending of
         information related to resuscitation. A number of integrated software applications are called RescueNet in the
         pre-hospital market and CodeNet for in-hospital use.
|
| |  | Diagnostic 12 Lead ECG with Interpretive Algorithm.  The 12 lead feature enables a user to see a diagnostic
         ECG, tracing or views, of the heart's electrical activity. 12 lead is used
         to provide rapid and early identification of myocardial infarction, commonly called a heart attack, in the pre-hospital
         setting. We pay royalties to GE Medical Systems ("GEMS") on each 12 lead analysis program we sell.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | GEMS Muse Cardiology Information System. Our M Series defibrillators communicate directly with the GEMS Information
         Technologies' MUSE CV® cardiology information system. This MUSE Interface provides direct communication of pre-hospital
         12 lead ECG data into GE's family of cardiovascular information systems, eliminating the need for a dedicated receiving
         station or gateway.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Pulse Oximetry. Pulse oximeters determine the oxygen saturation levels in blood, allowing a rapid identification of
         potential problems in the cardiopulmonary system. Since pulse oximeters can help detect the onset of cardiovascular
         incidents, pulse oximetry is now widely used in both hospital and pre-hospital settings when monitoring patients' vital
         signs. While conventional pulse oximeters do not perform well during patient motion or in intense light, we use Masimo
         Corporation's patented technology that is designed to overcome these technical problems. We purchase circuit boards and
         sensors from Masimo Corporation. We have a non-exclusive license to use the patented technology incorporated in these
         parts that we then incorporate into our products.                                                                                                                                           
|
| |  | Capnography. Capnography, also known as EtCO2, is the measurement of the amount of carbon dioxide being exhaled, allowing
         for rapid identification of potential problems in the cardiopulmonary system. We purchase circuit boards and sensors from
         Respironics to provide this feature.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Non-invasive Blood Pressure Measurement. We developed a non-invasive blood pressure measurement capability, also known as
         NIBP, and integrated it into our M Series defibrillators. We purchase circuit boards, hoses and cuffs from SunTech
         Medical to provide this feature.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|

# Critical Care
Transport (CCT) Defibrillators

In October 2001, we introduced our newest M Series model that has been designed for critical
care transport, the CCT. Based on an M Series platform, this new model incorporates the
same defibrillation and pacing technologies and general elements of the M Series design but adds significantly
expanded monitoring, battery capacity, and display capabilities. The CCT has a larger
color display that shows three traces simultaneously, combined with the addition of
invasive blood pressure measurement capability and temperature monitoring. This model is
also certified airworthy for military applications.

AED
Plus Defibrillators

In March 2002, we introduced a new
automated external defibrillator, called the AED Plus, designed for the public safety,
first responder and public access segments of the defibrillator market. This product is a
simplified device designed for infrequent use and incorporates new features to assist
rescuers in administering defibrillation and CPR. In addition to the device, we also
introduced a new and unique one-piece, long shelf life (four years) electrode system
called CPR-D Padz as a key accessory to the device. The device and electrode system
incorporate a unique instantaneous CPR feedback system that helps rescuers perform CPR
according to the AHA and the European Resuscitation Council (ERC) guidelines.
Other unique features include an LCD display that can be configured to display the ECG, a
highly graphical interface to remind rescuers how to use the device properly to follow the
recommended life-saving steps in the AHAs Chain of Survival, use of consumer lithium
batteries for power available locally and at low cost, and the incorporation of an
infrared-based communications system for managing data collected during the use of the
device. Support products include a training unit that
mimics the devices operation and is used to teach early defibrillation and CPR
skills, simulators to demonstrate and test operation of the unit, carrying cases, wall
boxes, and training materials.

# Biphasic Waveforms

External defibrillators deliver
current over time to the heart, which results in a defined waveform shape. The waveform in
general use today is monophasic, meaning that current is delivered in a single pulse that
flows in one direction. A biphasic waveform, in contrast, delivers current that first
flows in a positive direction for a period of time and then reverses direction so that it
flows in a negative direction. Typical biphasic waveforms appear to achieve the same
defibrillation success rates as monophasic waveforms but at significantly lower current
levels. Since less current is used, potential injury to the heart and skin is reduced with
a biphasic shock compared to a monophasic shock. All of the major manufacturers of
external defibrillators produce devices that use biphasic waveforms.

Biphasic waveforms are the first
major advance in defibrillation technology since the current monophasic waveform was
adopted in the early 1960s. Although there have been feature enhancements that make
new monophasic defibrillators easier to use and maintain, they have not proven to make
defibrillators more clinically effective or safer and thus have not rendered the older
models obsolete. At present, users generally replace existing defibrillators for
mechanical and other reasons unrelated to any clinical superiority of a new defibrillator.
Based on our sales and marketing experience, we estimate that hospital users replace
defibrillators after approximately seven to ten years of service. In light of the
demonstrated clinical superiority of biphasic technology, however, we believe that the
introduction of biphasic waveforms has accelerated the replacement of the large installed
base of monophasic defibrillators. We believe this accelerated replacement has increased
the size of the market for our defibrillators. Biphasic waveforms for conventional
defibrillators used in hospitals and EMS services by trained users were first introduced
in 1996. Based on our estimates of the replacement of monphasic defibrillators with
biphasic devices, the installed base of defibrillators should be predominately biphasic by
approximately 2010.

# Our Biphasic Waveform

Our primary competitors offer
biphasic waveforms using the same general shape. However, we have developed a uniquely
shaped biphasic waveform which achieves higher efficacy at lower current levels than
monophasic waveforms. Our biphasic waveform reduces the hearts exposure to high peak
current. In addition, our biphasic waveform keeps the waveform shape and duration constant
over a wide range of patients whose differing physiologies impact the conduction of
current.

We have sponsored two clinical trials
that have demonstrated that our proprietary biphasic waveform provides improved efficacy
compared to conventional monophasic waveforms in high impedance patients. High impedance
is generally associated with more difficulty in defibrillation. In a randomized study for
ventricular fibrillation of 184 patients, our biphasic waveform converted 99% of patients
on the first shock compared to 93% of patients converted with the monophasic waveform.
This compares favorably with the results obtained by other parties in similar trials. A
second randomized trial of 165 patients compared the efficacy of our biphasic waveform to
a conventional monophasic waveform for cardioversion of atrial fibrillation. Our
investigators reported a 68% first shock efficacy for our waveform compared to just 21%
for a conventional monophasic waveform. Overall, 94% of the patients randomized to our
biphasic waveform were successfully cardioverted as compared to 79% of the patients
treated with a monophasic waveform. These studies also showed that our waveform required
less than half the current for converting ventricular and atrial fibrillation than the
conventional monophasic waveform.

We sponsored a trial in the City of
Omaha, Nebraska Fire Department which provided the first report of our biphasic waveform
to improve resuscitation rates in a pre-hospital Basic Life Support (BLS) setting compared to historic
Monophasic Damped Sine (MDS) defibrillation effectiveness. There were a total
of 294 patients in the study. Our biphasic waveform showed a significantly higher first
shock success rate (67%) compared to the initial MDS shocks (48%, p < 0.0025). Rates of
Return of Spontaneous Circulation (ROSC) were improved for our biphasic
waveform verses MDS (35% verses 26%). Our biphasic waveform shocked the patients to a
normal sinus rhythm ROSC with significantly greater rates than the MDS waveform (25%
verses 15%, p < 0.05).

We recently sponsored ORBIT (Out of
Hospital Rectilinear Biphasic Investigation and Trial) which analyzed 436 cardiac arrest
patients. ORBIT is the worlds largest and most comprehensive study ever undertaken
in an out-of-hospital setting to look at the advantages of biphasic waveforms for
defibrillation. The trial was the first of its kind to look at the effectiveness of
biphasic defibrillation in the Advanced Life Support setting, where down times can be
significantly longer than those in the BLS setting. The interim
results, presented at the American Heart Association Convention in November 2003, showed an improvement in shock success from 45%
to 54% over the monophasic waveform at a p value of 0.06.

Our M Series defibrillator equipped
with our biphasic waveform is the only device cleared by the FDA to be labeled clinically
superior to monophasic defibrillators for conversion of ventricular fibrillation in
high-impedance patients, those patients who are difficult to defibrillate, and for
cardioversion of all atrial fibrillation patients. We therefore believe that our
proprietary biphasic waveform is superior to the biphasic waveform utilized by any of our
competitors. We believe that our proprietary biphasic waveform will offer compelling
clinical benefits that should give customers a reason to choose our biphasic
defibrillators over those of our competitors.

We have received seven U.S. patents
covering various aspects of our novel biphasic waveform technology. Several corresponding
foreign patents are still pending.

# Disposable Electrodes

We offer a variety of
single-patient-use, proprietary disposable electrodes for use with our resuscitation
devices. Among our primary competitors, we are the only company to engineer and
manufacture our own electrodes. We have continually innovated and upgraded our electrode
product line, including the pro-padz Biphasic Multi-function Electrodes specifically
designed for use with the ZOLL Rectilinear Biphasic waveform for cardioversion of atrial
fibrillation. In fiscal 2002, we introduced, in conjunction with our AED Plus
defibrillator, the unique one-piece CPR-D Padz electrode, which provides feedback on the
quality of CPR compressions. Our margins for electrodes are generally higher than our
margins for devices. We hope to sell more disposable electrodes in the future as more
customers recognize the benefits of electrodes, which are safer than traditional paddles for an operator of a
defibrillator. Another factor that might lead to
higher electrode sales is the use of interpretive algorithms for automated defibrillation.
The monitoring required to assess the patients condition can only be achieved with
electrodes and not with the traditional defibrillation paddles. Additionally, the use of
automated external defibrillators in non-medical settings, and the CPR-D Padz electrode
introduced with the AED Plus, will also contribute to our electrode revenues in the
future.

# Our Current Market

We divide our market for non-invasive
cardiac resuscitation equipment into three principal customer/geographic categories: North
American hospital; North American pre-hospital, which consists of a public safety segment
and a public access segment; and International. The pre-hospital public safety segment
consists of care providers such as paramedics, ambulance operators, emergency medical
technicians, firefighters, police and other first response personnel with responsibilities
for public safety. The pre-hospital public access segment includes non-traditional
responders to medical emergencies who have been trained to use automated external
defibrillators. This would include security personnel, staffs in occupational settings,
school personnel, and office staff. The International segment includes both hospital and
pre-hospital customers outside of North America. We estimate that the size of the
worldwide market for external defibrillator products was approximately $854 million in
2003. In North America we estimate the hospital segment was approximately $147 million and
the pre-hospital segment $265 million. International market size was estimated at $323
million for all segments. The total worldwide market for lower cost AEDs, which overlaps with the other segments, we estimate, was $204 million.

North American Hospital
Market. The U.S. hospital market consists of approximately 6,000 acute care community
hospitals and 1,000 additional hospitals. We also include military hospitals and
applications in this market. Presently, ZOLL defibrillators are used extensively in the
top 30 cardiac hospitals in the United States as listed by U.S. News and World Report in
July 2003.

Hospitals have traditionally used
cardiac resuscitation equipment, both for patients admitted with sudden cardiac arrest and
for patients at risk of sudden cardiac arrest undergoing other treatments. Many hospital
procedures such as surgery, cardiac catheterization, stress testing, and general
anesthesia may induce arrhythmias or sudden cardiac arrest, and hospitals frequently use
cardiac resuscitation devices on a standby basis in connection with these procedures.
Since immediate treatment is the critical factor for successful cardiac resuscitation,
hospitals typically place resuscitation devices throughout their facilities, including the
cardiac and critical care units, emergency rooms, operating rooms, electrophysiology
laboratories, and general wards. The importance of early defibrillation has also resulted
in the installation of defibrillators with AED capability in hospital clinical areas for
rapid use by the professional clinical staff. Lower cost simplified AEDs have also been
installed in non-clinical areas such a lobbies, food service areas and parking facilities
for operation by hospital staff, including security personnel, in the event of a cardiac
arrest outside of patient units. Hospitals also use portable devices during in-hospital
transportation of cardiac patients.

North American Pre-hospital
Market. Most sudden cardiac arrests and heart attacks occur outside of the hospital.
Due to the importance of immediate treatment, there is a substantial market for portable
cardiac resuscitation equipment designed for use by various emergency responders. The most
highly trained segment of the pre-hospital market is comprised of paramedics, who are
authorized and trained to use defibrillators to treat sudden cardiac arrest. In addition,
paramedics are becoming increasingly aware of external pacing as a standard of care for
the treatment of bradycardia. We believe the use of combination pacemakers/defibrillators
will become more widespread in the pre-hospital setting. Paramedics are also able to use
more advanced diagnostics, such as diagnostic 12 lead. Emergency medical technicians, who
are authorized to use automated external defibrillators, comprise a significant portion of
the potential pre-hospital market as well.

We believe the opportunity for growth
in the under-penetrated pre-hospital market encompassing public safety responders and
vehicles is large. Presently, we believe that approximately 80% of the estimated 35,000
ambulances in the United States are equipped with defibrillators. We believe that the
percentage of ambulances equipped with defibrillators will grow, and that ambulances and
other first response emergency vehicles will represent an increasingly important market
for cardiac resuscitation equipment as the medical community places increased priority on
providing such equipment and the necessary training to all first responders. We believe
that as ambulances and other first responder emergency vehicles replace their older
defibrillators with newer units, they will include additional monitoring parameters which
we are positioned to capitalize upon.

Public Access Defibrillation
Market.This market segment includes non-traditional, non healthcare users of
automated external defibrillators such as the AED Plus. This market segment is growing as
the lifesaving potential of simplified lower cost devices, which can be used before the
arrival of professional rescuers, becomes better known. Efforts by the AHA, American Red
Cross, National Safety Council, and National Center for Early Defibrillation should expand
public knowledge of AEDs and increase the demand for these devices.

Virtually any location with a large
number of people has the potential for the purchase and installation of AEDs. Simplified
operation and the incorporation of AED use in all CPR training exposes a large segment of
the population to this lifesaving technology increasing awareness and adoption.

We expect this market to continue to
expand and the recent publication of an extensive study by the AHA and National Heart,
Lung & Blood Institute that concluded public access defibrillation saves lives
otherwise lost to sudden cardiac arrest, affirms the public health benefit of the adoption
of this technology.

International Market. The
international market for defibrillators is less developed than the market in the United
States. In some international markets, unlike the U.S. market, the administration of
pacing and defibrillation in hospitals is generally viewed as a skill reserved for
physicians. Few other staff members are trained to administer such treatment, although
this is changing. The international market for defibrillators for use outside of hospitals
varies considerably from country to country but is generally less developed than the
market in North America.

We
believe that the international market for defibrillators will grow for a number of
reasons.

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The international hospital market for defibrillators is expected to grow as more hospitals are built and existing
         hospitals modernize and update their approaches to cardiac and emergency care.                                                                                                                                                                                                                                                                                                                                         
|
| |  | Emerging standards of care and the acceptance of automated equipment could result in increased use of cardiac
         resuscitation equipment by a broader range of healthcare personnel in the international market.                                                                                                                                                                                                                                                                                                                            
|
| |  | The ERC, the British Heart Foundation, and virtually all cardiac-oriented organizations in Europe, as well as the
         Australian Resuscitation Council, have strongly supported initiatives to expand the availability of defibrillators as a
         major public health initiative.                                                                                                                                                                                                                                                       
|
| |  | External pacing is used much less frequently in Europe and other parts of the world than it is in the United States, but
         many countries are beginning to implement cardiac life support protocols which incorporate external pacing as a standard
         component. Because most international defibrillators do not presently feature external pacing, the move to defibrillators
         with external pacing could drive the international demand for defibrillators. Our M Series defibrillators include
         external pacing.
|
| |  | The market for public access defibrillation is rapidly growing in Europe and Australia as the governments of these
         regions have begun to lessen the restrictions on physician-only administration of defibrillation. As other international
         markets begin to follow, there will be additional opportunities for government-driven programs.                                                                                                                                                                                     

We believe that we are positioned to
take advantage of the growth in the international market for defibrillators, based on the
continued success of the M Series defibrillators, our superior biphasic waveform, the
multiple language and other capabilities of the M Series defibrillators, and our new
public access defibrillator, the AED Plus.

# Our Market Opportunities

# Public Access
Defibrillation Using AEDs

There are over 460,000 deaths each
year from out-of-hospital cardiac arrest in the United States. Estimates say that more
than half of these deaths occur suddenly. Most occur at home and up to a quarter occur in
public places. Placing simplified automated external defibrillators, like the AED Plus, in
the hands of designated first responders who can rapidly administer defibrillation is the
most practical strategy to save lives since immediate defibrillation results in nearly
100% survival. In contrast, a delay of 4-5 minutes decreases survival to 15-40% and a
delay of 10 minutes results in death 95% of the time.

With a growing understanding of this
major public health problem in the United States and most developed countries, initiatives
on many fronts across the world are underway to encourage the widespread deployment of
defibrillators. The public access segment of the market is rapidly expanding. We believe
this trend will continue since there is no other effective treatment for sudden cardiac
arrest due to ventricular fibrillation other than defibrillation, and the capacity of
public safety services to shorten response times from their current average of 8-15
minutes will always be limited. We also expect that the understanding of AED use and its
relationship to CPR, as well as ongoing public health initiatives to reduce deaths and improve
resuscitation outcomes associated with this major public health problem, will increase the
demand for products designed to improve CPR and support for patients during resuscitation
efforts.

The passage of Federal and State Good
Samaritan legislation increases the likelihood that non-medically trained personnel will
be providing care to victims of sudden cardiac arrest. The AHA and virtually all
corresponding international organizations have established programs to bring early
defibrillation to communities. Early defibrillation is included in the AHA CPR training
for all healthcare personnel and some laypersons. In the U.S., government activities at
both state and federal levels continue to promote placement of AEDs in schools, nursing
homes, health clubs, and other public places. In addition, new legislation expands AED
usage by non-traditional users including police, fire, and highway patrol personnel. In
2004, grant dollars are expected to be available through the Department of Homeland
Security to purchase AEDs as well as traditional defibrillators with monitoring
capabilities. We believe that these developments, together with the introduction of AEDs
in highly visible places, will lead to a larger market for AEDs.

We are using a direct sales force to
sell our AEDs to the public safety market and a mix of alternate distribution, including
direct staff, distributors, and manufacturers representatives, in those markets that
are too small to support a direct sales force. We expect that this market can be serviced
by other alternative distribution methods, such as e-commerce, that can supplement and
reduce our need for an expensive sales force.

In June 2002, we signed an exclusive
multi-year distribution agreement with GE Medical Systems Information Technologies to sell
our AED Plus to physicians offices and clinics throughout the U.S. This partnership
affords us an excellent opportunity to expand into a relatively unpenetrated market.

# EMS Data Management
Solutions

We have developed a series of
software products (RescueNet) to address what we consider to be a growing need in
the EMS market for an integrated data management system. RescueNet provides our customers
with a single data management system that integrates dispatch, resuscitation information,
field data collection, data transfer, billing, and quality assurance functions. With the
seamless integration as the leverage, a majority of the EMS customers that purchase the
billing solution also purchase the dispatch system and vice versa.

Today, most EMS data is entered by
hand on clipboards and then distributed or re-entered manually into databases to meet
regulatory and insurance reporting requirements. The timeliness, accuracy and efficiency
of this process are key factors in the receipt of payments from third-party payers.
Capturing the resuscitation information within the field data system and wirelessly
downloading all the field data to the billing system provides great efficiency. A
significant amount of revenue is lost due to data entry errors, and misplaced paperwork or
data. Time is lost duplicating data entries. As a result, we believe that the market for
EMS field data management is significant and relatively unpenetrated.

# Competition

Our principal competitors in the
United States are Physio-Control Corporation and Royal Philips Electronics. Physio-Control
is a subsidiary of Medtronic, Inc., a leading medical technology company. Both
Physio-Control and Philips compete across our entire defibrillator product line. We also
compete with Cardiac Science, Inc., Welch Allyn (formerly Medical Research Labs, MRL),
Access Cardiosystems, Heart Sine Technologies, and Defib Tech in the lower cost AED market
segment. In the international market we compete with Physio-Control, Philips, most AED
competitors, and several other companies depending upon the country.
Physio-Control is generally the market leader in the industry.

We believe that the principal
competitive factors in the hospital market for cardiac resuscitation equipment are
clinical efficacy, reliability, portability, ease-of-use, and standardization. In the
pre-hospital market, in addition to the foregoing considerations, durability, a reliable
battery system, and availability of 12 lead ECG capabilities, are significant competitive
factors. We believe that our products compete favorably with respect to each of these
factors. Non-invasive temporary pacemakers and external defibrillators, such as those we
sell, are used in emergency situations and, accordingly, do not compete with permanent,
implantable pacemakers or defibrillators that are used to treat chronic arrhythmias. In
fact, the products are complementary, because emergency cardiac resuscitation is often
required during the implantation of a permanent device. We believe that the principal
competitive factors in the AED market are the ability to enable rescuers to respond
more rapidly and effectively, providing assistance in the administration of CPR, having a
single electrode pad that is easy to position on the victims body, and using
off-the-shelf affordable consumer batteries. Our AED Plus competes favorably with respect
to each of these factors.

The business of developing and
marketing software for data collection, billing, dispatching and management in the EMS
market is competitive. Competitors in this business include Medusa Medical Technologies,
Inc., Healthware Technologies, Inc., Safety Pad Software, Golden Hour Data Systems,
DocuMed, Inc., Tritech Software Systems, Inc., Sweet Computer Services, Inc., RAM Software
Systems, Inc., Intergraph Corporation and AmbPac, Inc. None of these competitors
currently have a product that provides an integrated solution comparable to the RescueNet
products. Physio-Control and Medusa have a marketing arrangement through which
Physio-Controls salespeople are promoting the Medusa field data solution.

# Research and Development

Our research and development strategy
is to improve and expand our product line through the application of our proprietary
technology to devices, electrodes and software. We pursue a multi-disciplinary approach to
product design. We are currently focusing our research and development programs on data
management, product variants of the M Series and AED Plus product lines, continued
clinical trials, expansion of our long-term technical research efforts, and other
initiatives.

# Manufacturing

Our manufacturing facilities are
located in Chelmsford, Massachusetts and Pawtucket, Rhode Island. In Chelmsford, we
generally assemble our devices from components produced to our specifications by our
suppliers. In Pawtucket, we manufacture our electrode products.

# Patents and Proprietary
Information

Seven U.S. patents have now been
issued covering various aspects of our unique biphasic waveform technology. Several
corresponding foreign patents relating to this waveform technology are still pending.

We have filed several new U.S. and
foreign patent applications covering novel technology related to our pacing and
defibrillation electrodes. One electrode patent was issued during 2003 and several others
are still pending. These patents supplement other electrode patents issued in the United
States, Europe and Japan. During 2002, we filed several U.S. patent applications for our
new AED Plus defibrillator. Two patents have been issued and others are still pending.
During 2003, we filed additional patent applications related to new AED Plus features.
These patents are currently pending.

A number of U.S. and foreign patents
covering technologies incorporated into our other products have been issued.

# Employees

As of September 28, 2003, we employed
844 people on a full-time basis, 766 in the United States and 78 internationally. We also
employed 18 part-time employees. None of our employees are subject to collective
bargaining agreements. We believe that our relations with our employees are excellent.

# Marketing and Sales

We use a direct sales force in the
United States, split into dedicated groups, focused on the hospital, pre-hospital, and
public access markets. We sell our RescueNet products through a separate dedicated sales
force. In the United States, we currently have 65 sales representatives and managers
calling on hospitals, 71 calling on pre-hospital accounts, 17 calling on public access
accounts (both direct customers and distributors), and eight selling our data
management products. Internationally, we have nine sales representatives in Canada, nine
in the United Kingdom, one in the Netherlands, five in France, seven in Australia, six in
Germany, one in Austria, and 10 international territory managers handling our sales where
we sell through local distributors.

We do not typically maintain a
significant backlog in our business. As a result, our backlog typically represents a
couple of weeks or less of average shipments. Our backlog typically does not materially
affect our sales in subsequent periods. Therefore, our sales force must sell most of each quarter's revenue in that quarter.

# Government Regulation

The manufacture and sale of our
products are subject to extensive regulation by numerous governmental authorities,
principally by the FDA and corresponding foreign agencies. The FDA administers the Federal
Food, Drug and Cosmetic Act and the regulations promulgated there under. We are subject to
the standards and procedures with respect to the manufacture of medical devices and are
subject to inspection by the FDA for compliance with such standards and procedures.

The FDA classifies medical devices
into one of three classes depending on the degree of risk associated with each medical
device and the extent of control needed to ensure safety and effectiveness. Our manual
defibrillation and pacing products have been classified by the FDA as Class II devices.
Our AED products have been classified as Class III devices. These devices must secure a
510(k) pre-market notification clearance before they can be introduced into the United
States market. The process of obtaining 510(k) clearance typically takes several months
and may involve the submission of limited clinical data supporting assertions that the
product is substantially equivalent to an already approved device or to a device that was
on the market before the enactment of the Medical Device Amendments of 1976. Every company that manufactures or
assembles medical devices is required to register with the FDA and to adhere to certain
good manufacturing practices (per the FDAs Quality System Regulation)
which regulate the manufacture of medical devices and prescribe record keeping procedures
and provide for the routine inspection of facilities for compliance with such regulations.
The FDA also has broad regulatory powers in the areas of clinical testing, marketing and
advertising of medical devices.

Medical device manufacturers are
routinely subject to periodic inspections by the FDA. If the FDA believes that a company
may not be operating in compliance with applicable laws and regulations, it can:

| |   |                                                                                        
| | - | ---------------------------------------------------------------------------------------
| |  | place the company under observation and re-inspect the facilities;                     
|
| |  | issue a warning letter apprising of violating conduct;                                 
|
| |  | detain or seize products;                                                              
|
| |  | mandate a recall;                                                                      
|
| |  | enjoin future violations; and                                                          
|
| |  | assess civil and criminal penalties against the company, its officers or its employees.
|

We are also subject to regulation in each of the foreign countries in which we sell our products. Many of the regulations
applicable to our products in such countries are similar to those of the FDA. The national health or social security organizations
of certain countries require our products to be qualified before they can be marketed in those countries.

# Investor Information

Financial and other information relating to the Company can be accessed from the Company's main Internet website
(http://www.zoll.com) by clicking on "Investor Relations". Information on our website is not part of our annual report. The
Company makes available, free of charge, copies of its annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as
soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC.  A copy may also
be obtained upon written request to the Company at: Stockholder Relations, ZOLL Medical Corporation, 269 Mill Road, Chelmsford, MA
01824-4105.

# Risk Factors

If We Fail to Compete  Successfully  in the Future  against  Existing or  Potential  Competitors,  Our  Operating  Results May Be
   Adversely Affected

Our principal global competitors with respect to our entire cardiac resuscitation equipment product line are Physio-Control
    Corporation and Royal Philips Electronics. Physio-Control is a subsidiary of Medtronic, Inc., a leading medical technology
    company.  Physio-Control has been the market leader in the defibrillator industry for over twenty years. As a result of
    Physio-Control's dominant position in this industry, many potential customers have relationships with Physio-Control that could
    make it difficult for us to continue to penetrate the markets for our products. In addition, Physio-Control, its parent and
    Royal Philips Electronics and other competitors each have significantly greater resources than we do. Accordingly,
    Physio-Control, Royal Philips Electronics and other competitors could substantially increase the resources they devote to the
    development and marketing of products that are competitive with ours. These and other competitors may develop and successfully
    commercialize medical devices that directly or indirectly accomplish what our products are designed to accomplish in a superior
    and/or less expensive manner. In addition, although our biphasic waveform technology is unique, our competitors have devised
    alternative biphasic waveform technology.  We have also licensed our biphasic waveform technology to GE Medical Systems
    Information Technologies.

There are a number of smaller competitors in the United States, which include Welch Allyn, Inc. (formerly MRL), Cardiac
    Science, Inc., Cardio Access and Defibtech. Internationally, we face the same competitors as in the United States as well as
    Nihon Kohden, Corpuls, Schiller, and other local competitors. It is possible the market may embrace these competitors' products which could negatively
    impact our market share.

In addition to external defibrillation and external pacing with cardiac resuscitation equipment, it is possible that other
    alternative therapeutic approaches to the treatment of sudden cardiac arrest may be developed. These alternative therapies or
    approaches, including pharmaceutical or other alternatives, could prove to be superior to our products.

There is significant competition in the business of developing and marketing software for data collection, billing, dispatching
    and management in the emergency medical system market. Our principal competitors in this business include Medusa Medical
    Technologies, Inc. Healthware Technologies, Inc., Safety Pad Software, Golden Hour Data Systems, DocuMed, Inc., Tritech
    Software Systems, Inc., Sweet Computer Services, Inc., RAM Software Systems, Inc., Intergraph Corporation and AmbPac, Inc.,
    some of which have greater financial, technical, research and development and marketing resources than we do.  Because the
    barriers to entry in this business are relatively low, additional competitors may easily enter this market in the future.  It
    is possible that systems developed by competitors could be superior to our data management system. Consequently, our ability to
    sell our data management system could be materially affected and our financial results could be materially and adversely
    affected.

Our  Operating  Results are Likely to  Fluctuate  Which Could Cause Our Stock Price to be  Volatile,  and the  Anticipation  of a
   Volatile Stock Price Can Cause Greater Volatility

Our quarterly and annual operating results have fluctuated and may continue to fluctuate. Various factors have and may continue
    to affect our operating results, including:

| |   |                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | high demand for our products  which could disrupt our normal  factory  utilization  and cause  shipments to occur in uneven
         patterns;
|
| |  | variations in product orders;                                                                                                                 
|
| |  | timing of new product introductions;                                                                                                          
|
| |  | temporary disruptions on buying behavior due to changes in technology (e.g. shift to biphasic technology);                                    
|
| |  | changes in distribution channels;                                                                                                             
|
| |  | actions taken by our competitors such as the introduction of new products or the offering of sales incentives;                                
|
| |  | the ability of our sales forces to effectively market our products;                                                                           
|
| |  | supply interruptions from our single source vendors;                                                                                          
|
| |  | temporary manufacturing disruptions;                                                                                                          
|
| |  | regulatory actions, including actions taken by the FDA or similar agencies; and                                                               
|
| |  | delays in obtaining domestic or foreign regulatory approvals.                                                                                 
|

A large percentage of our sales are made toward the end of each quarter. As a consequence,
our quarterly financial results are often dependent on the receipt of customer orders in
the last weeks of a quarter. The absence of these orders could cause us to fall short of
our quarterly sales targets, which in turn could cause our stock price to decline sharply.
As we grow in size, and these orders are received closer to the end of a period, we may
not be able to manufacture, test, and ship all orders in time to recognize as revenue for
that quarter.

Based
on these factors, period-to-period comparisons should not be relied upon as indications of
future performance. In anticipation of less successful quarterly results, parties may take
short positions in our stock. The actions of parties shorting our stock might cause even
more volatility in our stock price. The volatility of our stock may cause the value of a
stockholders investment to decline rapidly.

The AED PAD (Public Access  Defibrillation)
 Business is New to Us. If We are Not Successful in Entering This Business Segment, Operating Results May be Affected

The PAD market is a new market for us and has many new dynamics. This market involves many new
types of non-traditional healthcare distributors, and the efficiency of these distributors
may not be as robust as we expect. These new types of distributors may present credit
risks since they may not be well established and may not have the necessary business
volumes. In addition, we may not be successful in gaining market acceptance of our AED
Plus into alternative PAD markets if our PAD Distributors are not successful. Also, our
focus upon the PAD market may distract our operations from our core M Series business. All
of these items could cause our operating results to be unfavorably affected.

We have noticed that as the PAD market has grown, there have been an increasing number of
smaller, start-up companies entering the market. In order to gain market share, these
companies compete mainly on price. If these companies are able to capture a larger market
share with lower prices, this may cause declining prices and negatively affect our
operating results.

Two of our major competitors have announced plans to enter the home market. We also sell to
the home market and if our plan turns out to be less effective or efficient, we might have
difficulty building market share.

We
May be Required to Implement a Costly Product Recall

In the event that any of our products proves to be defective, we can voluntarily recall, or
the FDA could require us to redesign or implement a recall of any of our products. Both
our larger competitors and we have, on numerous occasions, voluntarily recalled products
in the past, and based on this experience, we believe that future recalls could result in
significant costs to us and significant adverse publicity, which could harm our ability to
market our products in the future. Though it is not possible to quantify the economic
impact of a recall, it could have a material adverse effect on our business, financial
condition and results of operations. For example, on June 25, 2003, we initiated a recall
of approximately 8,000 M Series units to correct a potential fault with a vendors
component that could occur during its operation. Very few of these units contained the
faulty component. The cost of implementing this corrective action was less than $100,000.

Changes
in the Healthcare Industry May Require Us to Decrease the Selling Price for Our Products
or Could Result in a Reduction in the Size of the Market for Our Products, Each of
Which Could Have a Negative Impact on Our Financial Performance

Trends toward managed care, healthcare cost containment, and other changes in government and
private sector initiatives in the United States and other countries in which we do
business are placing increased emphasis on the delivery of more cost-effective medical
therapies which could adversely affect the sale and/or the prices of our products. For
example:

| |   |                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | major  third-party  payers of hospital and  pre-hospital  services,  including  Medicare,  Medicaid and private  healthcare
        insurers,  have substantially  revised their payment  methodologies during the last few years which has resulted in stricter
        standards for reimbursement of hospital and pre-hospital charges for certain medical procedures;
|
| |  | Medicare,  Medicaid  and  private  healthcare  insurer  cutbacks  could  create  downward  price  pressure  in the  cardiac
        resuscitation pre-hospital market;                                                                                                                                                                                                   
|
| |  | numerous  legislative  proposals have been considered that would result in major reforms in the U.S. healthcare system that
        could have an adverse effect on our business;                                                                                                                                                                                        
|
| |  | there has been a  consolidation  among  healthcare  facilities and  purchasers of medical  devices in the United States who
        prefer to limit the number of suppliers  from whom they purchase  medical  products,  and these  entities may decide to stop
        purchasing our products or demand discounts on our prices;                                      
|
| |  | there is economic pressure to contain healthcare costs in international markets;                                                                                                                                                                                                                                                                                         
|
| |  | there are proposed and existing laws and regulations in domestic and international markets regulating pricing and
        profitability of companies in the healthcare industry; and                                                                                                                                                                                     
|
| |  | there have been initiatives by third party payers to challenge the prices charged for medical products which could affect
        our ability to sell products on a competitive basis.                                                                                                                                                                                   
|

Both the pressure to reduce prices for our products in response to these trends and the
decrease in the size of the market as a result of these trends could adversely affect our
levels of revenues and profitability of sales, which could have a material adverse effect
on our business.

General
Economic Conditions May Cause Our Customers to Delay Buying Our Products Resulting in
Lower Revenues

The national economy of the United States and the global economy are both subject to economic
downturns. An economic downturn in any market in which we sell our products may have a
significant impact on the ability of our customers, in both the hospital and pre-hospital
markets, to secure adequate funding to buy our products or might cause purchasing
decisions to be delayed. Any delay in purchasing our products may result in decreased
revenues and also allow our competitors additional time to develop products which may have
a competitive edge over our M Series products, making future sales of our products more
difficult.

For example, in the face of a difficult economic climate in the U.S., many states experienced
deficits and shortfalls of revenue to cover expenditures. As a result, states cut their
spending and support to local cities and towns, who then in-turn have reduced their
spending for capital equipment purchases for their EMS services. We believe that this has
had a negative impact on our revenues and may continue to do so.

The
War on Terrorism and the Impact of a Bio-Terror Threat May Cause Our Customers to Stop or
Delay Buying Our Products, Resulting in Lower Revenues

The current war on terrorism and a threat of a bio-terror attack may have a significant impact
on our customers ability or willingness to buy our products, as well as our ability
to timely deliver the product to the customers. Our customers may have to divert their
funding, earmarked for capital equipment purchases to the purchase of other medical
equipment and supplies to fight any potential bio-terror attack. The war on terrorism may
cause the diversion of any government funding of hospitals and EMS services for capital
equipment purchases to the war effort. This could result in decreased revenues.

We
can be Sued for Producing Defective Products and We May be Required to Pay Significant
Amounts to Those Harmed If We are Found Liable, and Our Business Could Suffer from Adverse Publicity

The manufacture and sale of medical products such as ours entail significant risk of product
liability claims. Our quality control standards comply with FDA requirements and we
believe that the amount of product liability insurance we maintain is adequate based on
past product liability claims in our industry. We cannot be assured that the amount of
such insurance will be sufficient to satisfy claims made against us in the future or that
we will be able to maintain insurance in the future at satisfactory rates or in adequate
amounts. Product liability claims could result in significant costs or litigation. A
successful claim brought against us in excess of our available insurance coverage or any
claim that results in significant adverse publicity against us could have a material
adverse effect on our business, financial condition and results of operations.

Recurring
Sales of Electrodes to Our Customers May Decline

We typically have recurring sales of electrodes to our customers. Other vendors have
developed electrode adaptors which allow generic electrodes to be compatible with our
defibrillators. If we are unable to continue to differentiate the superiority of our
electrodes over these generic electrodes, our future revenue from the sale of electrodes
could be reduced.

Failure
to Produce New Products or Obtain Market Acceptance for Our New Products in a Timely
Manner Could Harm Our Business

Because substantially all of our revenue comes from the sale of cardiac resuscitation devices and
related products, our financial performance will depend upon market acceptance of, and our
ability to deliver and support, new products. We cannot be assured that we will be able to
produce viable products in the time frames we currently estimate. Factors which could
cause delay in these schedules or even cancellation of our projects to produce and market
these new products include: research and development delays, the actions of our
competitors producing competing products and the actions of other parties who may provide
alternative therapies or solutions which could reduce or eliminate the markets for pending
products.

The
degree of market acceptance of any of our products will depend on a number of factors,
including:

| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | our ability to develop and introduce new products in a timely manner;                                  
|
| |  | our ability to successfully implement new product technologies;                                        
|
| |  | the market's readiness to accept new products such as our data management products and our PAD product;
|
| |  | the standardization of an automated platform for data management systems;                              
|
| |  | the clinical efficacy of our products and the outcome of clinical trials;                              
|
| |  | the ability to obtain timely regulatory approval for new products; and                                 
|
| |  | the prices of our products compared to the prices of our competitors' products.                        
|

If
our new products do not achieve market acceptance, our financial performance could be
adversely affected.

Our
Dependence on Sole and Single Source Suppliers Exposes Us to Supply Interruptions and
Manufacturing Delays Caused by Faulty Components That Could Result in Product
Delivery Delays and Substantial Costs to Redesign Our Products

Although we use many standard parts and components for our products, some key components are
purchased from sole or single source vendors for which alternative sources at present are
not readily available. For example, we currently purchase proprietary components,
including capacitors, display screens, gate arrays and integrated circuits, for which
there are no direct substitutes. Our inability to obtain sufficient quantities of these
components as well as our limited ability to deal with faulty components may result in
future delays or reductions in product shipments which could cause a fluctuation in our
results of operations.

These or any other components could be replaced with alternatives from other suppliers, which could involve a
redesign of our products. Such a redesign could involve considerable time and expense. We could be at risk that the supplier might experience difficulties meeting our needs.

If our manufacturers are unable or unwilling to continue manufacturing our components in
required volumes, we will have to transfer manufacturing to acceptable alternative
manufacturers whom we have identified, which could result in significant interruptions of
supply. The manufacture of these components is complex, and our reliance on the suppliers
of these components exposes us to potential production difficulties and quality
variations, which could negatively impact the cost and timely delivery of our products.
Accordingly, any significant interruption in the supply, or degradation in the quality, of
any component would have a material adverse effect on our business, financial condition
and results of operations.

We
May Not be Able to Obtain Appropriate Regulatory Approvals for Our New Products

The manufacture and sale of our products are subject to regulation by numerous governmental
authorities, principally the FDA and corresponding state and foreign agencies. The FDA
administers the Federal Food, Drug and Cosmetic Act, as amended, and the rules and
regulations promulgated hereunder. Some of our products have been classified by the FDA as
Class II devices and others, such as our automated external defibrillators, have been
classified as Class III devices. All of these devices must secure a 510(k) pre-market
notification clearance before they can be introduced into the U.S. market. The process of
obtaining 510(k) clearance typically takes several months and may involve the submission
of limited clinical data supporting assertions that the product is substantially
equivalent to an already approved device or to a device that was on the market before the
Medical Device Amendments of 1976. Delays in obtaining 510(k) clearance could have an
adverse effect on the introduction of future products. Moreover, approvals, if granted,
may limit the uses for which a product may be marketed, which could reduce or eliminate
the commercial benefit of manufacturing any such product.

We are also subject to regulation in each of the foreign countries in which we sell products.
Many of the regulations applicable to our products in such countries are similar to those
of the FDA. However, the national health or social security organizations of certain
countries require our products to be qualified before they can be marketed in those
countries. We cannot be assured that such clearances will be obtained.

If
We Fail to Comply With Applicable Regulatory Laws and Regulations, The FDA and Other
Foreign Regulatory Agencies Could Exercise Any of Their Regulatory Powers, which Could
Have a Material Adverse Effect on Our Business

Every company that manufactures or assembles medical devices is required to register with the
FDA and to adhere to certain quality systems, which regulate the manufacture of medical
devices and prescribe record keeping procedures and provide for the routine inspection of
facilities for compliance with such regulations. The FDA also has broad regulatory powers
in the areas of clinical testing, marketing and advertising of medical devices. To ensure
that manufacturers adhere to good manufacturing practices, medical device manufacturers
are routinely subject to periodic inspections by the FDA. If the FDA believes that a
company may not be operating in compliance with applicable laws and regulations, it could
take any of the following actions:

| |   |                                                                                        
| | - | ---------------------------------------------------------------------------------------
| |  | place the company under observation and re-inspect the facilities;                     
|
| |  | issue a warning letter apprising of violating conduct;                                 
|
| |  | detain or seize products;                                                              
|
| |  | mandate a recall;                                                                      
|
| |  | enjoin future violations; and                                                          
|
| |  | assess civil and criminal penalties against the company, its officers or its employees.
|

We, like most of our U.S. competitors, have received warning letters from the FDA in the past,
and may receive warning letters in the future. We have always complied with the warning
letters we have received. However, our failure to comply with FDA regulations could result
in sanctions being imposed on us, including restrictions on the marketing or recall of our
products. These sanctions could have a material adverse effect on our business.

If a foreign regulatory agency believes that we are not operating in compliance with their
laws and regulations, they could prevent us from selling our products in their country,
which could have a material adverse effect on our business.

We
are Dependent upon Licensed and Purchased Technology for Upgradeable Features in Our
Products, and We May Not Be Able to Renew These Licenses or Purchase Agreements in the
Future

We license and purchase technology from third parties for upgradeable features in our
products, including 12 lead analysis program, pulse oximetry, EtCO2, and NIBP
technologies. We anticipate that we will need to license and purchase additional
technology to remain competitive. We may not be able to renew our existing licenses and
purchase agreements or to license and purchase other technologies on commercially
reasonable terms or at all. If we are unable to renew our existing licenses and purchase
agreements or we are unable to license or purchase new technologies, we may not be able to
offer competitive products.

Fluctuations
in Currency Exchange Rates May Adversely Affect Our International Sales

Our revenue from international operations can be denominated in or significantly influenced by
the currency and general economic climate of the country in which we make sales. A
decrease in the value of such foreign currencies relative to the U.S. dollar could result
in downward price pressure for our products or losses from currency exchange rate
fluctuations. As we continue to expand our international operations, downward price
pressure and exposure to gains and losses on foreign currency transactions may increase.

We may continue our use of forward contracts and other instruments in the future to reduce
our exposure to exchange rate fluctuations from intercompany accounts receivable
denominated in foreign currencies, and we may not be able to do this successfully.
Accordingly, we may experience economic loss and a negative impact on our results of
operations and equity as a result of foreign currency exchange rate fluctuations.

We
Have Licensed Our Biphasic Technology to GE Medical Systems Information Technologies

In 2001, we entered into a five-year license agreement with GE Medical Systems Information
Technologies that permits GE to incorporate our patented biphasic waveform technology into
their defibrillator and monitoring systems. At this time GE has taken only limited action
to incorporate our technology into their products. However, GE has significantly greater
resources than we do. If they bring our technology to market, it could impact our ability
to market and sell our products, potentially lowering our revenues.

Our
Current and Future Investments May Lose Value in the Future

We have made a $12 million debt and equity investment in Revivant Corporation, a development
stage company, with the option to purchase the remaining equity in October 2004. We also
have a $3.5 million investment in LifeCOR, Inc., a development stage company. In addition,
we hold minor investments in Advanced Circulatory Systems, Inc. (formerly ResQSystems,
Inc.) and AED@Home and may in the future invest in the securities of other companies and
participate in joint venture agreements. These investments and future investments are
subject to the risks that the entities in which we invest will become bankrupt or lose
money. Investing in securities involves risks and no assurance can be made as to the
profitability of any investment. Our inability to identify profitable investments could
adversely affect our financial condition and results of operations. Unless we hold a
majority position in an investment or joint venture, we will not be able to control all of
the activities of the companies in which we invest or the joint ventures in which we are
participating. Because of this, such entities may take actions against our wishes and not
in furtherance of, and even opposed to, our business plans and objectives. These
investments are also subject to the risk of impasse if no one party exercises ultimate
control over the business decisions.

Future
Changes in Applicable Laws and Regulations Could Have an Adverse Effect on Our Business

Although we are not aware of any pending changes in applicable laws and regulations governing our
industry, we cannot be assured that federal, state or foreign governments will not change
existing laws or regulations or adopt new laws or regulations that regulate our industry.
Changes in or adoption of new laws or regulations could result in the following
consequences that would have an adverse effect on our business:

| |   |                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------
| |  | regulatory clearance previously received for our products could be revoked;                                
|
| |  | costs of compliance could increase; or                                                                     
|
| |  | we may be unable to comply with such laws and regulations so that we would be unable to sell
 our products.
|

Uncertain
Customer Decision Processes May Result in Long Sales Cycles Which Could Result in
Unpredictable Fluctuations in Revenues and Delay the Replacement of Cardiac
Resuscitation Devices

Many of the customers in the pre-hospital market consist of municipal fire and emergency
medical systems departments. As a result, there are numerous decision-makers and
governmental procedures in the decision-making process. In addition, decisions at
hospitals concerning the purchase of new medical devices are sometimes made on a
department-by-department basis. Accordingly, we believe the purchasing decisions of many
of our customers may be characterized by long decision-making processes, which have
resulted in and may continue to result in long sales cycles for our products. For example,
the sales cycles for cardiac resuscitation products typically have been between six and
nine months, although some sales efforts have taken as long as two years.

Our
International Sales Expose Our Business to a Variety of Risks That Could Result in
Significant Fluctuations in Our Results of Operations

Approximately 26% of our sales for the twelve months ended September 28, 2003 were made to foreign
purchasers and we plan to increase the sale of our products to foreign purchasers in the
future. As a result, a significant portion of our sales is and will continue to be subject
to the risks of international business, including:

| |   |                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | fluctuations in foreign currencies;                                                                                                                                                                                
|
| |  | trade disputes;                                                                                                                                                                                                    
|
| |  | changes in regulatory requirements, tariffs and other barriers;                                                                                                                                                    
|
| |  | the  possibility  of quotas,  duties,  taxes or other changes or  restrictions  upon the  importation or exportation of the
         products being implemented by the United States or these foreign countries;   
|
| |  | timing and availability of import/export licenses;                                                                                                                                                                 
|
| |  | political and economic instability;                                                                                                                                                                                
|
| |  | higher credit risk and difficulties in accounts receivable collections;                                                                                                                                            
|
| |  | increased tax exposure if our revenues in foreign countries are subject to taxation by more than one jurisdiction;                                                                                                 
|
| |  | accepting  customer  purchase orders governed by foreign laws which may differ  significantly  from U.S. laws and limit our ability to enforce our rights under such agreements and to collect damages, if awarded;
|
| |  | war on terrorism;                                                                                                                                                                                                  
|
| |  | disruption in the international transportation industry; and                                                                                                                                                       
|
| |  | use of international distributors.                                                                                                                                                                                 
|

As international sales become a larger portion of our total sales, these risks could create
significant fluctuations in our results of operations. These risks could affect our
ability to resell trade-in products to domestic distributors, who in turn often resell the
trade-in products in international markets. Our inability to sell trade-in products might
require us to offer lower trade-in values, which might impact our ability to sell new
products to customers desiring to trade in older models and then purchase newer products.

We have recently expanded the size and number of our direct sales forces and our marketing
support for these sales forces. We intend to continue to expand these areas, but if our
sales forces are not effective, or if there is a sudden decrease in the markets where we
have direct operations, we could be adversely affected.

We
May Fail to Adequately Protect or Enforce Our Intellectual Property Rights or Secure
Rights to Third Party Intellectual Property, and Our Competitors Can Use Some of Our
Previously Proprietary Technology

Our success will depend in part on our ability to obtain and maintain patent protection for
our products, methods, processes and other technologies, to preserve our trade secrets and
to operate without infringing the proprietary rights of third parties. To date, we have
been issued 25 U.S. patents for our various inventions and technologies. Additional patent
applications have been filed with the U.S. Patent and Trademark Office and are currently
pending. The patents that have been granted to us are for a definitive period of time and
will expire. We have filed certain corresponding foreign patent applications and intend to
file additional foreign and U.S. patent applications as appropriate. We cannot be assured
as to:

| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | the degree and range of protection any patents will afford against competitors with similar products;          
|
| |  | if and when patents will be issued;                                                                            
|
| |  | whether or not others will obtain patents claiming aspects similar to those covered by our patent applications;
|
| |  | whether or not competitors will use information contained in our expired patents;                              
|
| |  | whether or not others will design around our patents or obtain access to our know-how; or                      
|
| |  | the extent to which we will be successful in avoiding any patents granted to others.                           
|

We have, for example, patents and pending patent applications for our proprietary biphasic
technology. Our competitors could develop biphasic technology that has comparable or
superior clinical efficacy to our biphasic technology and if our patents do not adequately
protect our technology, our competitors would be able to obtain patents claiming aspects
similar to our biphasic technology or our competitors could design around our patents.

If certain patents issued to others are upheld or if certain patent applications filed by
others issue and are upheld, we may be:

| |   |                                                                                         
| | - | ----------------------------------------------------------------------------------------
| |  | required to obtain licenses or redesign our products or processes to avoid infringement;
|
| |  | prevented from practicing the subject matter claimed in those patents; or               
|
| |  | required to pay damages.                                                                
|

There has been substantial litigation regarding patent and other intellectual property rights in
the medical device industry. Litigation or administrative proceedings, including
interference proceedings before the U.S. Patent and Trademark Office, related to
intellectual property rights could be brought against us or be initiated by us. Adverse
determinations in any patent litigation could subject us to significant liabilities to
third parties, could require us to seek licenses from third parties and could, if licenses
are not available, prevent us from manufacturing, selling or using certain of our
products, some of which could have a material adverse effect on the Company. In addition,
the costs of any such proceedings may be substantial whether or not we are successful.

Our success is also dependent upon the skills, knowledge and experience, none of which is
patentable, of our scientific and technical personnel. To help protect our rights, we
require all U.S. employees, consultants and advisors to enter into confidentiality
agreements, which prohibit the disclosure of confidential information to anyone outside of
our Company and require disclosure and assignment to us of their ideas, developments,
discoveries and inventions. We cannot be assured that these agreements will provide
adequate protection for our trade secrets, know-how or other proprietary information in
the event of any unauthorized use or disclosure of the lawful development by others of
such information.

Reliance
on Overseas Vendors for Some of the Components for Our Products Exposes Us to
International Business Risks, Which Could Have an Adverse Effect on Our Business

Some of the components we use in our products are acquired from foreign manufacturers,
particularly countries located in Europe and Asia. As a result, a significant portion of
our purchases of components is subject to the risks of international business. The failure
to obtain these components as a result of any of these risks can result in significant
delivery delays of our products, which could have an adverse effect on our business.

We
May Acquire Other Businesses, and We May Have Difficulty Integrating These Businesses or
Generating an Acceptable Return from Acquisitions

We may attempt to acquire or make strategic investments in businesses and other assets. Such
acquisitions will involve risks, including:

| |   |                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the inability to achieve the strategic and operating goals of the acquisition;                                                                                      
|
| |  | the inability to raise the required capital to fund the acquisition;                                                                                                
|
| |  | difficulty in assimilating the acquired operations and personnel;                                                                                                   
|
| |  | disruption of our ongoing business; and                                                                                                                             
|
| |  | inability to successfully incorporate acquired technology into our existing product lines and maintain uniform standards,
        controls, procedures and policies.
|

Provisions
in Our Charter Documents, Our Shareholder Rights Agreement and State Law May Make It
Harder for Others To Obtain Control of ZOLL Even Though Some Stockholders Might
Consider Such a Development to be Favorable

Our board of directors has the authority to issue up to 1,000,000 shares of undesignated
preferred stock and to determine the rights, preferences, privileges and restrictions of
such shares without further vote or action by our stockholders. The rights of the holders
of common stock will be subject to, and may be adversely affected by, the rights of the
holders of any preferred stock that may be issued in the future. The issuance of preferred
stock could have the effect of making it more difficult for third parties to acquire a
majority of our outstanding voting stock. In addition, our restated articles of
organization provide for staggered terms for the members of the board of directors which
could delay or impede the removal of incumbent directors and could make a merger, tender
offer or proxy contest involving the Company more difficult. Our restated articles of
organization, restated by-laws and applicable Massachusetts law also impose various
procedural and other requirements that could delay or make a merger, tender offer or proxy
contest involving us more difficult.

We have also implemented a so-called poison pill by adopting our shareholders rights
agreement. This poison pill significantly increases the costs that would be incurred by an
unwanted third party acquirer if such party owns or announces its intent to commence a
tender offer for more than 15% of our outstanding common stock. The existence of this
poison pill could delay, deter or prevent a takeover of the Company.

All of these provisions could limit the price that investors might be willing to pay in the
future for shares of our common stock which could preclude our shareholders from
recognizing a premium over the prevailing market price of our stock.

We
Have Only One Manufacturing Facility for Each of Our Major Products and Any Damage or
Incapacitation of Either of the Facilities Could Impede Our Ability to Produce These Products

We have only one manufacturing facility, which produces defibrillators and one separate
manufacturing facility which produces electrodes. Damage to either facility could render
us unable to manufacture the relevant product or require us to reduce the output of
products at the damaged facility. In addition, both of these facilities are located in the
Northeastern United States. A severe weather event or other natural disaster occurring
late in a quarter could make it difficult to meet product shipping targets. Any of these
events could materially and adversely impact our business, financial condition and results
of operations.

# Item 2. Properties.

Our facilities are located in
Chelmsford, Massachusetts and Pawtucket, Rhode Island. Our executive headquarters are
located at the Chelmsford facility, along with our research and development and our device
manufacturing operations. The Chelmsford, Massachusetts facility offers approximately
155,000 square feet of office, warehouse and assembly space. We own a 33,000 square foot
building in Rhode Island, where we manufacture our electrode products and conduct related
research and development. We own a 17,500 square foot building in Boulder, Colorado where
our data management software business offices are located. We also have administrative
offices in Manchester, England; Dodewaard, the Netherlands; Cologne, Germany; Sydney,
Australia; and in Mississauga, Ontario, Canada.

---

# Item 3. Legal
Proceedings.

On November 25, 2002, we announced
the settlement of a lawsuit that Cardiac Science, Inc. initiated in March 2002 asserting
that we infringed upon two patents owned by them. The settlement includes the
cross-licensing of a number of patents between us and Cardiac Science, Inc. We paid an
initial licensing fee and will pay certain ongoing royalties to Cardiac Science, Inc.
These amounts did not and will not have a material impact on our consolidated financial
position and results of operations.

We are involved in the normal course
of our business in various litigation matters and regulatory issues, including product
recalls. Although we are unable to quantify at the present time the exact financial impact
in any pending matters, we believe that none of the pending matters will have an outcome
material to our financial condition or business.

Item 4. Submission of Matters to a
Vote of Security Holders.

Not Applicable.

# PART II

# Item 5. Market for
Registrants Common Equity and Related Stockholder Matters.

The Companys Common Stock is
traded on the National Association of Securities Dealers Automated Quotation (NASDAQ)
National Market System under the symbol ZOLL. The following table sets forth
the high and low sales prices during the fiscal quarters specified:

|               | Sales Prices
|-------------- | ------------
|
|
|First Quarter  | $40.00      
|Second Quarter | 42.29       
|Third Quarter  | 41.83       
|Fourth Quarter | 36.18       

The Company has never declared or
paid cash dividends on its capital stock. The Company currently intends to retain any
current and future earnings to finance the growth and development of its business, and
therefore does not anticipate paying any cash dividends in the foreseeable future.

As of December 9, 2003, there were 91
stockholders of record of the Companys Common Stock. The Company believes there were
substantially in excess of 5,000 beneficial holders of the Common Stock.

|Equity Compensation Plan Information                      
|----------------------------------------------------------
|
|                                                          
|Equity compensation plans approved by security holders    
|Equity compensation plans not approved by security holders
|                                                          
|Total                                                     
|                                                          

---

# Item 6. Selected
Financial Data.

# ZOLL Medical Corporation
Five Year Financial Summary

# 

---

_________________

|                                                                 | FISCAL YEAR    
|---------------------------------------------------------------- | ---------------
|
|                                                                
|Income Statement Data:                                           |                
|Net sales                                                        | $184,603       
|Cost of goods sold                                               | 81,477         
|                                                                 |                
|Gross profit                                                     | 103,126        
|Expenses:                                                       
|Selling and marketing                                            | 59,461         
|General and administrative                                       | 12,404         
|Research and development                                         | 14,115         
|                                                                 |                
|Total expenses                                                   | 85,980         
|                                                                 |                
|Income from operations                                           | 17,146         
|Investment and other income (expense)                            | 2,033          
|                                                                 |                
|Income before income taxes                                       | 19,179         
|Provision for income taxes                                       | 6,329          
|                                                                 |                
|Net income                                                       | 12,850         
|                                                                 |                
|Basic earnings per common share                                  | $      1.42    
|Weighted average common shares outstanding                       | 9,030          
|                                                                 |                
|Diluted earnings per common and common equivalent share          | $      1.40    
|Weighted average common and common equivalent shares outstanding | 9,204          
|                                                                 |                
|Pro forma information1:                                         
|Historical income before taxes                                   |                
|Pro forma incremental operating costs                            |                
|                                                                 |                
|Pro forma income before income taxes                             |                
|Pro forma provision for income taxes                             |                
|                                                                 |                
|Pro forma net income                                             |                
|                                                                 |                
|Pro forma diluted earnings per share                             |                
|                                                                 |                
|Balance Sheet Data:                                             
|Working capital                                                  | $113,505       
|Total assets                                                     | $192,096       
|Total long-term debt, excluding current portion                  | $             -
|Stockholders' equity                                             | $155,991       

1 Pro forma information reflects
the effect of (i) incremental operating costs expected to be incurred by the Company as a
result of the Pinpoint merger and (ii) the provision for corporate income taxes on the
previously untaxed Subchapter S corporation earnings of Pinpoint.

Item 7. Managements
Discussion and Analysis of Financial Condition and Results of Operations.

We intend for this discussion and
analysis to provide you with information that will assist you in understanding our
consolidated financial statements, the changes in certain key items in those consolidated
financial statements from year to year and the primary factors that accounted for those
changes. Our consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States. This discussion and
analysis should be read in conjunction with our consolidated financial statements as of
September 28, 2003 and for the year then ended and the notes accompanying those
consolidated financial statements.

# 2003 Compared to 2002

Our net sales increased 23% in fiscal
2003 to a record $184.6 million, up from $150.2 million in the prior year, reflecting
continued growth of our core M Series product as we continue to capture market share and
the growing demand for our AED Plus (Automated External Defibrillator)
product.

|(000's omitted)                              | 2003 | 2002 |           
|-------------------------------------------- | ---- | ---- | ----------
|Hospital Market-North America                |      |      | $   63,558
|Pre-hospital Market-North America            |      |      | 55,357    
|Other-North America                          |      |      | 19,602    
|International Market-excluding North America |      |      | 46,086    
|                                             |      |      | $184,603  

Total North American sales increased
18% to $138.5 million in comparison to $117.0 million for the same period a year earlier.
Net sales to the North American hospital market totaled $63.6 million, a 25% increase in
comparison to $50.7 million for the prior year. The increase was mainly due to $12.5
million of M Series CCT shipments to the U.S. military for their PMI (Patient Movement
Item) program. Without the U.S. military, our sales in the North American hospital market
remained relatively flat year to year. We believe this was due to the slowdown in the
North American economy. Our sales to the North American pre-hospital market increased 18%
to $55.4 million, up from $47.0 million in the previous year. Increases in this market
were primarily due to growth in our data management software revenues and growth in sales
of our new AED Plus product.

Our AED Plus product has generated
approximately $18.8 million in total sales in its first full year, of which approximately
81% were sold in North America. This is compared to AED Plus sales of $6.6 million last
year, with approximately 79% sold in North America. This increase reflects the results of
the addition of approximately 75 AED Plus distributors and manufacturers
representatives in the North American market along with the addition of in-house
distributor managers and regional managers for this market and the addition to our direct
sales force compared to the prior year.

International sales increased 39% to
$46.1 million in comparison to $33.2 million for the prior year. This increase reflects
continued growth in all of our direct sales organizations and in our International
distributor sales, particularly in Europe, the Middle East and China. An increase in
foreign currency exchange rates contributed approximately $1.9 million to this increase.

Gross margins for fiscal 2003
decreased to 55.9%, from 56.5% in fiscal 2002. The decreased margins are due to sales to
the U.S. military and increased sales to the German Army, which included volume discounts.

Selling and marketing expenses as a
percentage of net sales remained consistent at 32%. Compared to the year ended September
29, 2002, selling and marketing expenses increased $10.8 million or 22.2% for the year
ended September 28, 2003. The increase in selling and marketing expense reflects
additional wages and related benefits and travel for expansion of our PAD sales force
where we have added new regional and distributor managers, our international sales
operations where we have added people, our North American pre-hospital sales force where
we have added people, our expanded U.S. sales management team, our new U.S. training
resources, expansion of our tradeshow participation, and increased advertising and other
promotional costs.

General and administrative expenses
decreased as a percentage of net sales to 6.7% from 7.5%, as we continued to leverage our
personnel and our information technology investments. General and administrative expenses
increased $1.2 million or 10.8% for the year ended September 28, 2003, compared to the
year ended September 29, 2002. The change from the comparable prior period primarily
reflects an increase in wages and related benefits for an expanded headcount to support
the larger organization, along with an increase in insurance premiums.

Research & Development
(R&D) expenses as a percentage of net sales remained consistent at 8%.
R&D expenses increased $2.6 million or 22.4% for the year ended September 28, 2003
compared to the year ended September 29, 2002. Our continued investment in research and
development reflects significant resources devoted to data management, product variants of
the M Series and AED Plus product lines, continued clinical trials, expansion of our
long-term technical research efforts, and expansion of other initiatives.

Investment and other income increased
to $2.0 million in fiscal 2003, as compared to $1.6 million in the previous year. This
increase was primarily due to foreign exchange gains offset by lower investment earnings
due to lower cash balances invested at lower interest rates over the prior year.

Our effective tax rate remained
consistent at 33% for the year ended September 28, 2003, as compared to the same period in
fiscal 2002, reflecting continued research and development credits for our R&D
activity, along with foreign earnings taxed at differing rates, and the utilization of
foreign loss carry forwards.

Liquidity and Capital
Resources

Our cash, cash equivalents and
marketable securities decreased from $65.8 million to $60.8 million, or approximately 8%,
during fiscal 2003. Our cash and cash equivalents at September 28, 2003 totaled $40.8
million compared to $55.7 million at September 29, 2002. We had short-term investments
amounting to $20.0 million at September 28, 2003 in comparison to $10.1 million at
September 29, 2002.

Cash provided by operating activities
for the year ended September 28, 2003 increased $8.1 million to $20 million as compared to
$11.9 million for the year ended September 29, 2002. This net increase was primarily
attributable to a 25.6% rise in our net income year to year combined with a lower growth
of our inventory and accounts receivable balances in 2003 compared to 2002. We also saw an
increase in our depreciation expense in 2003 compared to 2002, which did not affect cash
flow. This depreciation increase was due to prior years increases in the deployment
of demonstration units to our growing sales force along with the deployment of laptop
computers to our North American sales force with the implementation of our CRM (Customer
Relationship Management) tool. Another factor contributing to this rise in cash from
operations was the timing of our fiscal year-end on September 28, 2003 which caused our
accounts payable and accrued expenses to increase as payroll, rent, corporate taxes and other vendor payments are
not typically paid until the calendar month-end.

Cash used in investing activities was
$36.6 million for fiscal 2003 in comparison to $2.2 million for fiscal 2002. This increase
primarily reflects the fact that we used $10 million of cash in 2003 for net purchases of
marketable securities compared to the prior year when we received $5.8 million of cash on
the net sales of marketable securities. Cash was also used to purchase $15.8 million of
equity and debt investments in Revivant Corporation, LifeCOR, Inc., Advanced
Circulatory Systems, Inc. (formerly ResQSystems, Inc.), and AED@Home. Property, plant and equipment
purchases increased $2.6 million from the prior year which was primarily due to
additional leasehold improvements for our new facility in Chelmsford, Massachusetts. Most of these leasehold
 improvements have been reimbursed to us by our landlord and will be accounted for as credits to rent expense over
the life of our lease.

Cash provided by financing activities
was $1.2 million for fiscal 2003 in comparison to $609,000 in the previous year. The
change reflects a higher number of stock options exercised during the current year
(121,305 in 2003 verses 57,635 in 2002) at a lower average price ($12.17 in 2003 verses
$14.60 in 2002).

We maintain a working capital line of
credit with our bank. Borrowings under this line bear interest at the banks base
rate (4% at September 28, 2003). The full amount of the $12.0 million line was available
to us at September 28, 2003.

We believe that the combination of
existing cash, cash equivalents, and highly liquid short-term investments on hand, future
cash to be generated by operations and amounts available under our existing line of credit
will be sufficient to meet our ongoing operating and capital expenditure requirements for
the foreseeable future.

Off-Balance Sheet
Arrangements

We do not have any material
off-balance sheet arrangements other than non-cancelable operating leases entered into in
the ordinary course of business. For liquidity purposes, we choose to lease our facilities
and automobiles instead of purchasing them.

Contractual Obligations
and Other Commercial Commitments

The following tables set forth
certain information concerning our obligations and commitments to make future payments
under contracts, such as debt and lease agreements, and under contingent commitments.

|                                           | Payments Due by Period
|------------------------------------------ | ----------------------
|                                           |                       
|
|                                          
|Non-Cancelable Operating Lease Obligations | $9,323                
|                                          
|Purchase Obligations                       | 289                   
|                                           |                       
|Total Contractual Obligations              | $9,612                
|                                           |                       

Legal and Regulatory
Affairs

On November 25, 2002, we announced
the settlement of a lawsuit that Cardiac Science, Inc. initiated against us in March 2002
asserting that we have infringed upon two patents owned by them. The settlement included
the cross-licensing of a number of patents. We paid an initial licensing fee and will pay
certain ongoing royalties to them. These amounts did not and will not have a material
impact on our consolidated financial position and results of operations.

We are also involved in the normal
course of our business in various litigation matters and regulatory issues, including
product recalls. Although we are unable to quantify at the present time the exact
financial impact in any pending matters, we believe that none of the pending matters will
have an outcome material to our financial condition or results of operations.

# 2002 Compared to 2001

Our net sales increased 26% in fiscal
2002 to a record $150.2 million, up from $119.2 million in the prior year, reflecting
continued growth of our core M Series product, and the successful introduction to the
market of our CCT and AED Plus products.

Net sales to the North American
hospital market totaled $50.7 million, a 31% increase in comparison to $38.6 million for
the prior year. The increase was primarily due to our ability to capture market share from
our competitors and to a growing acceptance of and desire for more fully featured units
which include more monitoring parameters. Our sales to the North American pre-hospital
market increased 27% to $47.0 million, up from $36.9 million in the previous year.
Increases in this segment were primarily due to our data management software revenues and
distributor sales of our new AED Plus product.

Total North American sales increased
25% to $117.0 million in comparison to $93.9 million for the same period a year earlier.
In addition to the individual factors described above, the following factors have
contributed to the overall growth in our North American sales: first, there was an
increased demand for our biphasic technology and as a result 96% of all M-Series sold
during the 2002 have incorporated our biphasic technology compared with 71% in 2001;
second, the introduction of our new AED Plus product generated approximately $6.6 million
in sales in its initial year, of which approximately 79% were sold in North America.

International sales increased 31% to
$33.2 million in comparison to $25.3 million for the same period a year earlier. The
increase in International sales reflected continued growth particularly in continental
Europe, the United Kingdom, and Australia. This was the result of continued investments in
our international infrastructure, a full years sales from our direct operations in
France and Australia; increased sales through our European distribution partners; and
record sales in the United Kingdom, which included large sales to the U.K. government,
which was upgrading its EMS systems.

Gross margins for fiscal 2002
increased to 56.5%, from 55.8% in fiscal 2001. The increased margins were due to the
introduction of our new CCT product, higher demand for monitoring parameters, and
contribution from our data management software products. These increases were partially
offset by an increase in international shipments, including sales to distributors, which
typically carry lower than average gross margins.

Selling and marketing expenses as a
percentage of net sales remained consistent at 32%. Compared to the year ended September
30, 2001, selling and marketing expenses increased $10.4 million or 27.3% for the year
ended September 29, 2002. The increase in selling and marketing expense reflected
additions to the North American pre-hospital sales force, expenses related to our newest
direct distribution subsidiaries in France and Australia, and higher marketing costs
related to increased personnel and related activities in the international markets and
supporting the launch of our AED Plus product worldwide.

General and administrative expenses
decreased as a percentage of net sales to 7.5% from 8.1%, as we continued to leverage our
personnel and maximize our information technology investments. General and administrative
expenses increased $1.6 million or 16.5% for the year ended September 29, 2002, compared
to the year ended September 30, 2001. The change from the comparable prior period
primarily reflected an increase in insurance premiums and professional fees, which
included litigation costs in defense of a patent infringement case.

R&D expenses increased $1.3 million or 12.8% for the year ended
September 29, 2002 compared to the year ended September 30, 2001. R&D expenses
decreased as a percentage of net sales to 7.7% from 8.6%. Our continued investment in
research and development reflected significant resources devoted to our new public access
product, the AED Plus, biphasic clinical trial studies, and increased investments in
future product development.

Investment and other income decreased
to $1.6 million in fiscal 2002, as compared to $3.1 million in the previous year. This
decrease was primarily due to declining interest rates, which were slightly offset by the
increase in average cash balances over the prior year.

Our effective tax rate decreased from
35% to 33% for the year ended September 29, 2002, as compared to the same period in fiscal
2001, reflecting increased research and development credits stemming from the development
of our CCT and AED Plus products.

# Critical Accounting
Policies

Our management strives to report our financial
results in a clear and understandable manner, even though in some cases accounting and
disclosure rules are complex and require us to use technical terminology. We follow
accounting principles generally accepted in the United States in preparing our
consolidated financial statements. These principles require us to make certain estimates
and apply judgments that affect our financial position and results of operations.
Management continually reviews its accounting policies, how they are applied and how they
are reported and disclosed in our financial statements. Following is a summary of our more
significant accounting policies, defined as revenue recognition and those that are
reflective of significant judgments and uncertainties, and potentially result in
materially different results under different assumptions and conditions, and how they are
applied in preparation of the financial statements. For a detailed discussion on the
application of these and other accounting policies, see Note A in the notes to the
consolidated financial statements.

Revenue Recognition

Revenues from sales of cardiac
resuscitation devices, disposable electrodes and accessories are recognized when a signed
non-cancelable purchase order exists, the product is shipped, title and risk have passed
to the customer, the fee is fixed and determinable, and collection is considered probable.
Revenues are recorded net of estimated returns.

We also license software under
non-cancelable license agreements and provide services including training, installation,
consulting and maintenance, which consist of product support services, periodic updates
and unspecified upgrade rights (collectively, post-contract customer support
(PCS)). Revenue from the sale of software is recognized in accordance with the
American Institute of Certified Public Accountants (AICPA) Statement of
Position (SOP) 97-2, Software Revenue Recognition, as amended.
License fee revenues are recognized when a non-cancelable license agreement has been
signed, the software product has been shipped, there are no uncertainties surrounding
product acceptance, the fees are fixed and determinable, and collection is considered
probable. Revenues from maintenance agreements and upgrade rights are recognized ratably
over the period of service.

Our software arrangements contain
multiple elements, which include software products, services and PCS. In general, we do
not have vendor specific objective evidence of fair value for our software products.
Accordingly, for transactions where vendor specific objective evidence exists for
undelivered elements but not for delivered elements, we use the residual method as
discussed in SOP 98-9, Modification of SOP 97-2, With Respect to Certain
Transactions. Under the residual method, the total fair value of the undelivered
elements, as indicated by vendor specific objective evidence, is deferred and the
difference between the total arrangement fee and the amount deferred for the undelivered
elements is recognized as revenue related to the delivered elements.

Allowance for Doubtful
Accounts / Sales Returns and Allowances

We maintain an allowance for doubtful
accounts for estimated losses, which are included in bad debt expense, resulting from the
inability of our customers to make required payments. We determine the adequacy of this
allowance by regularly reviewing the aging of our accounts receivable and evaluating
individual customer receivables, considering customers financial condition,
historical experience, credit history and current economic condition. We also maintain an
estimate of potential future product returns and discounts given related to trade-ins and
to current period product receivables. We analyze the rate of historical returns when
evaluating the adequacy of the allowance for sales returns, which are included with the
allowance for doubtful accounts on our balance sheet.

As of September 28, 2003 our accounts
receivable balance of $47.9 million is reported net of allowances of $4.7 million. We
believe our reported allowances at September 28, 2003 are adequate. If the financial
conditions of our customers were to deteriorate, however, resulting in their inability to
make payments, we may need to record additional allowances, resulting in additional
expenses being recorded for the period in which such determination was made.

Warranty Reserves

Our products are sold with warranty
provisions that require us to remedy deficiencies in quality or performance over a
specified period of time, usually one to five years. We provide for the estimated cost of
product warranties at the time revenue is recognized. While we engage in product quality
programs and processes, our warranty obligation is affected by product failure rates,
material usage and service delivery costs incurred in correcting a product failure. We
believe that our recorded liability of $2.1 million at September 28, 2003 is adequate to
cover future costs for the servicing of our products sold through that date. If actual
product failure rates, material usage or service delivery costs differ from our estimates,
revisions to the estimated warranty liability would be required.

Inventory Reserves

Significant management judgment is
required to determine the reserve for obsolete or excess inventory. Inventory on hand may
exceed future demand either because the product is outdated, obsolete, or because the
amount on hand is in excess of future needs. We provide for the total value of inventories
that we determine to be obsolete based on criteria such as customer demand and changing
technologies. At September 28, 2003, our inventory reserves were $2.4 million, or 6.5% of
our $36.8 million gross inventories.

We value our inventories at the lower
of cost or market. Cost is determined by the first-in, first-out (FIFO)
method, including material, labor and factory overhead.

# Safe Harbor Statements

Certain statements contained
herein constitute forward-looking statements as that term is defined under the
Private Securities Litigation Reform Act of 1995 (the Act) and releases issued
by the Securities and Exchange Commission and within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Exchange Act of 1934. The words
believe, expect, anticipate, intend,
estimate and other expressions which are predictions of or indicate future
events and trends and which do not relate to historical matters identify forward-looking
statements. Particularly, the Companys expectations regarding future operational
liquidity, contractual obligations and other commercial commitments, and capital
requirements are forward-looking statements. Reliance should not be placed on
forward-looking statements because they involve known and unknown risks, uncertainties and
other factors, which may cause the actual results, performance or achievements of the
Company to differ materially from anticipated future results, performance or achievements
expressed or implied by such forward-looking statements. The Company undertakes no
obligation to publicly update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise. Factors that could cause actual results to
differ materially from those expressed or implied by such forward-looking statements
include, but are not limited to, the length and severity of the current economic slowdown
and its impact on capital spending budgets, the potential disruption in the transportation
industry on the Companys supply chain and product distribution channels and those
other risks and uncertainties contained under the heading Risk Factors.

# Item 7A. Quantitative
and Qualitative Disclosures About Market Risk.

We have cash equivalents and
marketable securities that primarily consist of money market accounts and fixed rate
asset-backed corporate securities. The majority of these investments have maturities
within one to five years. We believe that our exposure to interest rate risk is minimal
due to the term and type of our investments and that fluctuations in interest rates would
not have a material adverse effect on our results of operations.

We have international offices in
Canada, United Kingdom, Netherlands, France, Germany, and Australia. These subsidiaries
transact business in their functional or local currency. Therefore, we are exposed to
foreign currency exchange risks and fluctuations in foreign currencies, along with
economic and political instability in the foreign countries in which we operate, all of
which could adversely impact our results of operations and financial condition.

We use forward contracts to reduce
our exposure to foreign currency risk due to fluctuations in exchange rates underlying the
value of intercompany accounts receivable denominated in foreign currencies. A forward
contract obligates us to exchange predetermined amounts of specified foreign currencies at
specified exchange rates on specified dates. These forward contracts are denominated in
the same currency in which the underlying foreign currency receivables are denominated and
bear a contract value and maturity date that approximate the value and expected settlement
date, respectively, of the underlying transactions. Unrealized gains and losses on open
contracts at the end of each accounting period, resulting from changes in the fair value
of these contracts, are recognized in earnings generally in the same period as exchange
gains and losses on the underlying foreign denominated receivables are recognized. Gains
and losses on forward contracts and foreign denominated receivables are included in
investment and other income.

We had one forward exchange contract outstanding in the notional amount of 4.0 million Euros
at September 28, 2003. The contract serves as a hedge of a substantial portion of our
Euro-denominated intercompany balances.  The fair value of the foreign currency
derivative contract outstanding at September 28, 2003 was approximately $4.6 million. A
sensitivity analysis of a change in the fair value of the Euro derivative foreign exchange
contract outstanding at September 28, 2003 indicates that, if the U.S. Dollar weakened by
10% against the Euro, the fair value of this contract would decrease by $417,000.
Conversely, if the U.S. Dollar strengthened by 10% against the Euro, the fair value of
this contract would increase by $459,000. Any gains and losses on the fair value of the
derivative contract would be largely offset by losses and gains on the underlying
transaction. These offsetting gains and losses are not reflected in the analysis above.

# Exchange Rate
Sensitivity: September 28, 2003

# Expected Maturity Dates

|(Amounts in $)                                                   | 2003       | 2004 | 2005 | 2006 | 2007 | Thereafter | Total      | Unrealized Gain/(Loss)
|---------------------------------------------------------------- | ---------- | ---- | ---- | ---- | ---- | ---------- | ---------- | ----------------------
|                                                                 |            |      |      |      |      |            |            |                       
|                                                                
|                                                                
|                                                                
|Forward Exchange Agreements (Receive $/Pay Euro) Contract Amount | $4,572,000 |      |      |      |      |            | $4,572,000 | $(19,000)             
|                                                                
|Average Contract Exchange Rate                                   | 1.1430     |      |      |      |      |            | 1.1430     |                       

---

# Item 8. Financial
Statements and Supplementary Data.

Report of Independent
Auditors

# Board of Directors and
Stockholders of ZOLL Medical Corporation

We
have audited the accompanying consolidated balance sheets of ZOLL Medical Corporation as
of September 28, 2003 and September 29, 2002, and the related consolidated statements of
income, stockholders equity and comprehensive income, and cash flows for each of the
three years in the period ended September 28, 2003. Our audits also included the financial
statement schedule listed in the Index at Item 15 (a). These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance
with auditing standards generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material
respects, the consolidated financial position of ZOLL Medical Corporation at September 28,
2003 and September 29, 2002, and the consolidated results of its operations and its cash
flows for each of the three years in the period ended September 28, 2003, in conformity
with accounting principles generally accepted in the United States. Also, in our opinion,
the related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects the
information set forth therein.

| |                      
| | ---------------------
| | /s/ Ernst & Young LLP

October 31, 2003Boston,
Massachusetts

---

# ZOLL Medical Corporation
Consolidated Balance Sheets

|(000's omitted, except per share amounts)                                                                                            | Sept. 28, 2003 | Sept. 29, 2002
|------------------------------------------------------------------------------------------------------------------------------------ | -------------- | --------------
|                                                                                                                                     |                |               
|Assets                                                                                                                               |                |               
|Current assets:                                                                                                                      |                |               
|Cash and cash equivalents                                                                                                            |                |               
|Marketable securities                                                                                                                |                |               
|Accounts receivable, less allowances of $4,689 and $3,462
at September 28, 2003 and           September 29, 2002, respectively       |                |               
|Inventories:                                                                                                                         |                |               
|Raw materials                                                                                                                        |                |               
|Work-in-process                                                                                                                      |                |               
|Finished goods                                                                                                                       |                |               
|                                                                                                                                     |                |               
|                                                                                                                                     |                |               
|Prepaid expenses and other current assets                                                                                            |                |               
|                                                                                                                                     |                |               
|Total current assets                                                                                                                 |                |               
|                                                                                                                                     |                |               
|Property and equipment at cost:                                                                                                      |                |               
|Land and building                                                                                                                    |                |               
|Machinery and equipment                                                                                                              |                |               
|Construction in progress                                                                                                             |                |               
|Tooling                                                                                                                              |                |               
|Furniture and fixtures                                                                                                               |                |               
|Leasehold improvements                                                                                                               |                |               
|                                                                                                                                     |                |               
|                                                                                                                                     |                |               
|Less accumulated depreciation                                                                                                        |                |               
|                                                                                                                                     |                |               
|Net property and equipment                                                                                                           |                |               
|                                                                                                                                     |                |               
|Investments                                                                                                                          |                |               
|Other assets, net of accumulated amortization of $2,298 and $1,693 at September 28,        2003 and September 29, 2002, respectively |                |               
|                                                                                                                                     |                |               
|                                                                                                                                     |                |               
|                                                                                                                                     |                |               
|                                                                                                                                     |                |               
|Liabilities and Stockholders Equity                                                                                                 |                |               
|Current liabilities:                                                                                                                 |                |               
|Accounts payable                                                                                                                     |                |               
|Accrued expenses and other liabilities                                                                                               |                |               
|                                                                                                                                     |                |               
|Total current liabilities                                                                                                            |                |               
|                                                                                                                                     |                |               
|Deferred income taxes                                                                                                                |                |               
|Commitments and contingencies (Note H)                                                                                               |                |               
|Stockholders equity:                                                                                                                |                |               
|Preferred stock, $0.01 par value, authorized 1,000                                                                                   |                |               
|shares, none issued or outstanding                                                                                                   |                |               
|                                                                                                                                     |                |               
|Common stock, $0.02 par value, authorized 19,000                                                                                     |                |               
|shares, 9,063 and 8,942 issued and outstanding at                                                                                    |                |               
|September 28, 2003 and September 29, 2002, respectively                                                                              |                |               
|Capital in excess of par value                                                                                                       |                |               
|Accumulated other comprehensive loss                                                                                                 |                |               
|Retained earnings                                                                                                                    |                |               
|                                                                                                                                     |                |               
|Total stockholders equity                                                                                                            |                |               
|                                                                                                                                     |                |               
|                                                                                                                                     |                |               
|                                                                                                                                     |                |               

See accompanying notes.

---

# ZOLL Medical Corporation
Consolidated Income Statements

|                                                                 | YEAR ENDED
|---------------------------------------------------------------- | ----------
|                                                                 |           
|
|                                                                 |           
|Net sales                                                        |           
|Cost of goods sold                                               |           
|                                                                 |           
|Gross Profit                                                     |           
|Expenses:                                                        |           
|Selling and marketing                                            |           
|General and administrative                                       |           
|Research and development                                         |           
|                                                                 |           
|Total expenses                                                   |           
|                                                                 |           
|Income from operations                                           |           
|Investment and other income                                      |           
|Interest expense                                                 |           
|                                                                 |           
|Income before income taxes                                       |           
|Provision for income taxes                                       |           
|                                                                 |           
|Net income                                                       |           
|                                                                 |           
|Basic earnings per common share                                  |           
|Weighted average common shares outstanding                       |           
|                                                                 |           
|Diluted earnings per common and common equivalent share          |           
|Weighted average common and common equivalent shares outstanding |           
|                                                                 |           

See accompanying notes.

---

# ZOLL Medical Corporation Statements
of Stockholders Equity and Comprehensive Income

|(000's omitted)                                     | Common Shares | Amount | Capital in Excess of Par Value | Accumulated Comprehensive Income | Retained Earnings | Total Stockholders Equity
|--------------------------------------------------- | ------------- | ------ | ------------------------------ | -------------------------------- | ----------------- | --------------------------
|                                                   
|Balance at September 30, 2000                       |               |        |                                | 8,798                            |                   | $                         
|                                                   
|Exercise of stock options                           |               |        |                                | 86                               |                   |                           
|Tax benefit realized upon exercise of stock options |               |        |                                |                                  |                   |                           
|Comprehensive income:                               |               |       
|Net income                                          |               |        |                                |                                  |                   |                           
|Unrealized gain on available-for-sale securities    |               |        |                                |                                  |                   |                           
|Cumulative foreign currency translation adjustment  |               |        |                                |                                  |                   |                           
|                                                    |              
|Total comprehensive income                          |               |        |                                |                                  |                   |                           
|                                                    |              
|Balance at September 30, 2001                       |               |        |                                | 8,884                            |                   |                           
|                                                   
|Exercise of stock options                           |               |        |                                | 58                               |                   |                           
|Tax benefit realized upon exercise of stock options |               |        |                                |                                  |                   |                           
|Comprehensive income:                               |               |       
|Net income                                          |               |        |                                |                                  |                   |                           
|Unrealized loss on available-for-sale securities    |               |        |                                |                                  |                   |                           
|Cumulative foreign currency translation adjustment  |               |        |                                |                                  |                   |                           
|                                                    |              
|Total comprehensive income                          |               |        |                                |                                  |                   |                           
|                                                    |              
|Balance at September 29, 2002                       |               |        |                                | 8,942                            |                   |                           
|                                                   
|Exercise of stock options                           |               |        |                                | 121                              |                   |                           
|Tax benefit realized upon exercise of stock options |               |        |                                |                                  |                   |                           
|Comprehensive income:                               |               |       
|Net income                                          |               |        |                                |                                  |                   |                           
|Unrealized loss on available-for-sale securities    |               |        |                                |                                  |                   |                           
|Cumulative foreign currency translation adjustment  |               |        |                                |                                  |                   |                           
|                                                    |              
|Total comprehensive income                          |               |        |                                |                                  |                   |                           
|                                                    |              
|Balance at September 28, 2003                       |               |        |                                | 9,063                            |                   | $                         
|                                                    |              

See accompanying notes.

---

# ZOLL Medical Corporation
Consolidated Statements of Cash Flows

|                                                            | YEAR ENDED
|----------------------------------------------------------- | ----------
|
|                                                           
|Operating Activities:                                       |           
|Net income                                                  |           
|Charges not affecting cash:                                 |           
|Depreciation and amortization                               |           
|Tax benefit from the exercise of stock options              |           
|Accounts receivable allowances                              |           
|Inventory reserve                                           |           
|Net realized gains on sale of marketable securities         |           
|Provision for warranty expense                              |           
|Deferred income taxes                                       |           
|Changes in current assets and liabilities:                  |           
|Accounts receivable                                         |           
|Inventories                                                 |           
|Prepaid expenses and other current assets                   |           
|Accounts payable and accrued expenses                       |           
|                                                            |           
|Net cash provided by operating activities                   |           
|Investing Activities:                                       |           
|Additions to property and equipment, net                    |           
|Purchases of marketable securities                          |           
|Proceeds from sales and maturities of marketable securities |           
|Equity investments in private companies                     |           
|Issuance of note receivable to Revivant Corp.               |           
|Other assets, net                                           |           
|                                                            |           
|Net cash provided by (used in) investing activities         |           
|Financing Activities:                                       |           
|Exercise of stock options                                   |           
|Repayment of long-term debt                                 |           
|                                                            |           
|Net cash provided by financing                              |           
|activities                                                  |           
|Effect of exchange rates on cash and cash                   |           
|equivalents                                                 |           
|                                                            |           
|Net (decrease) increase in cash                             |           
|                                                            |           
|Cash and cash equivalents at beginning of year              |           
|                                                            |           
|Cash and cash equivalents at end of year                    |           
|                                                            |           
|Supplemental disclosures of cash flow information:          |           
|Cash paid during the year:                                  |           
|Income taxes                                                |           
|Interest                                                    |           

See accompanying notes.

---

# ZOLL Medical Corporation Notes
to Consolidated Financial Statements

# Note A-Significant
Accounting Policies

Description of Business: ZOLL
Medical Corporation (the Company) designs, manufactures and markets an
integrated line of proprietary, non-invasive cardiac resuscitation devices, disposable
electrodes and accessories used for the emergency resuscitation of cardiac arrest victims.
The Companys subsidiary, Pinpoint Technologies (Pinpoint) designs and
markets software, which automates collection and management of both clinical and
non-clinical data for emergency medical service providers.

Principles of Consolidation:
The consolidated financial statements include the accounts of the Company and its wholly
owned subsidiaries. All significant intercompany accounts and transactions have been
eliminated.

Reclassifications: Certain
reclassifications have been made to prior years consolidated financial statements to
conform to the 2003 presentation.

Cash and Cash Equivalents: The
Company considers all highly liquid instruments with an original maturity of three months
or less to be cash equivalents. Substantially all cash and cash equivalents are invested
in a money market investment account. These amounts are stated at cost, which approximates
market value.

Marketable Securities: The
Company accounts for marketable securities in accordance with Statement of Financial
Accounting Standards No. 115 Accounting for Certain Investments in Debt and Equity
Securities (SFAS 115). SFAS 115 establishes the accounting and reporting
requirements for all debt securities and for investments in equity securities that have
readily determinable fair values. All marketable securities must be classified as one of
the following: held-to-maturity, available-for-sale, or trading. The Company classifies
its marketable securities as available-for-sale and, as such, carries the investments at
fair value, with unrealized holding gains and losses reported in stockholders equity
as a separate component of accumulated other comprehensive income. The cost of securities
sold is based on the specific identification method. Realized gains and losses, and
declines in value judged to be other than temporary, are included in investment income.

Concentration of Risk: The
Company sells its products primarily to hospitals, emergency care providers and
universities. Collateral is generally not required. With the introduction of the AED Plus
product, the Company has established distribution agreements with approximately 150
distributors to distribute this product. The Company performs periodic credit evaluations
of its customers financial condition and does not require collateral. No single
customer accounts for a significant portion of the Companys net sales or accounts
receivable.

In addition, the Company sells its
products to the international market to both end users and distributors. Although the Company does not foresee a credit risk
associated with international receivables to either end users or distributors, repayment is dependent upon the financial
stability of the customers to which it sells. In order to mitigate the risk of loss in
geographical areas with historical credit risks, in some cases the Company requires
letters of credit from its foreign customers. Foreign sales accounted for approximately
26% of the Companys total revenues in 2003, 2002, and 2001. The percent of foreign sales to distributors were approximately 49%
in 2003, 48% in 2002, and 59% in 2001. No single distributor accounts for a significant portion of the Company's international sales or accounts receivables.

The Company maintains reserves for
potential trade receivable credit losses, and such losses historically have been within
managements expectations.

Financial Instruments: The
fair value of the Companys financial instruments, which include cash and cash
equivalents, marketable securities, accounts receivable, and accounts payable, are based
on assumptions concerning the amount and timing of estimated future cash flows and assumed
discount rates reflecting varying degrees of perceived risk. The carrying value of these
financial instruments approximated their fair value at September 28, 2003 and September
29, 2002, respectively, due to the short-term nature of these instruments.

The Company utilizes foreign currency
forward contracts to reduce our exposure to foreign currency risk due to fluctuations in
exchange rates underlying the value of intercompany accounts receivable denominated in
foreign currencies. The Company recognizes all derivative financial instruments (foreign
currency forward contracts) in accordance with SFAS 133 Accounting for Derivative
Instruments and Hedging Activities. Changes in the fair value of derivative
instruments are recorded in earnings unless hedge accounting criteria are met. For
derivative instruments designated as fair value hedges, the changes in fair value of both
the derivative instrument and the hedged item are recorded in earnings. For derivative
instruments designed as cash flow and net investment hedges, the effective portions of
changes in the fair value of the derivative are recorded in other comprehensive income
(OCI). The ineffective portions are recognized in earnings.

Inventories: Inventories,
principally purchased parts, are valued at the lower of first-in, first-out
(FIFO) cost or market. Market is determined by the replacement value for raw
materials and net realizable value, after allowance for estimated costs of completion and
disposal, for work-in-process and finished goods. We provide for the total value of inventories
 that we determine to be obsolete based on criteria such as customer demand and changing
 technologies. At September 28, 2003, and September 29, 2002, our inventory reserves were $2.4 million,
or 6.5% of our $36.8 million gross inventories, and $1.9 million, or 6.1% of our $31.0 million gross inventories, respectively.

Intangible Assets: Patents are
stated at cost and amortized using the straight-line method over five years. Prepaid
license fees are amortized over the term of the related contract, once commercialization
of the related product begins. The carrying value of goodwill and other intangible assets
was approximately $1.3 million and $1.1 million at September 28, 2003 and September 29,
2002.

Property and Equipment:
Property and equipment are stated at cost. In general, depreciation is computed on a
straight-line basis over the estimated economic useful lives of the assets (forty years
for buildings, three to ten years for machinery and equipment and five years for tooling,
furniture, fixtures, and software). Leasehold improvements are amortized over the shorter
of the useful life or the life of the related lease. Depreciation expense totaled
$7,570,000, $6,485,000 and $5,957,000 in 2003, 2002, and 2001, respectively.

Long-lived Assets:The Company
reviews long-lived assets at least annually to determine if any adverse conditions exist
that would indicate impairment. Conditions that would trigger an impairment assessment
include, but are not limited to, a significant adverse change in legal factors or business
climate that could affect the value of an asset or an adverse action or assessment by a
regulator. If the carrying amount of an asset exceeds the sum of its undiscounted cash
flows, the carrying value is written down to fair value in the period identified. Fair
value is calculated as the present value of estimated future cash flows using a
risk-adjusted discount rate.

Investments: Investments in
those entities where the Company owns less than twenty percent of the voting stock of the
individual entity and does not exercise significant influence over operating and financial
policies of the entity are accounted for using the cost method. As of September 28, 2003
and September 29, 2002, the Companys investments were in companies that are not
publicly traded, and, therefore, no established market for their securities exists. The
Company has a policy in place to review the fair value of its investments on a regular
basis to evaluate the carrying value of the investments in these companies. If the Company
believes that the carrying value of an investment is in excess of fair market value, it is
the Companys policy to record an impairment charge to adjust the carrying value to
fair market value.

As of September 28, 2003 and
September 29, 2002, the Company had investments of $12.8 million
and $2.0 million, respectively.

Revenue Recognition: Revenues
from sales of cardiac resuscitation devices, disposable electrodes and accessories are
recognized when a signed non-cancelable purchase order exists, the product is shipped,
title and risk of loss have passed to the customer, the fee is fixed or determinable, and
collection is considered probable. Revenues are recorded net of estimated returns.

The Company also licenses software
under non-cancelable license agreements and provides services including training,
installation, consulting and maintenance, consisting of product support services, periodic
updates and unspecified upgrade rights (collectively, PCS). Revenue from the
sale of software is recognized in accordance with the American Institute of Certified
Public Accountants (AICPA) Statement of Position (SOP) 97-2,
Software Revenue Recognition, as amended. License fee revenues are generally
recognized when a non-cancelable license agreement has been signed, the software product
has been shipped, there are no uncertainties surrounding product acceptance, the fees are
fixed or determinable, and collection is considered probable. Revenues from training,
installation and consulting services are recognized as the services are provided. Revenues
from maintenance agreements and upgrade rights are recognized ratably over the period of
service.

The Companys software
arrangements contain multiple elements, which include software products, services and PCS.
In general, the Company does not have vendor specific objective evidence of fair value for
its software products. Accordingly, for transactions where vendor specific objective
evidence exists for undelivered elements but not for delivered elements, the Company uses
the residual method as discussed in SOP 98-9, Modification of SOP 97-2, With Respect
to Certain Transactions. Under the residual method, the total fair value of the
undelivered elements, as indicated by vendor specific objective evidence, is deferred and
the difference between the total arrangement fee and the amount deferred for the
undelivered elements is recognized as revenue related to the delivered elements.

Advertising Costs: Advertising
costs are expensed as incurred and totaled $1,805,000, $1,457,000, and $993,000 in 2003,
2002, and 2001 respectively.

Shipping & Handling Costs:
Shipping and handling costs are recorded in Costs of Goods Sold and totaled $2,675,000,
$2,216,000, and $1,886,000 in 2003, 2002, and 2001, respectively.

Product Warranty: Expected
future product warranty costs, included in accrued expenses and other liabilities, are
recognized at the time of sale for all products covered under warranty. Warranty periods
range from one to five years. The Companys estimate is based upon the number of
units remaining under warranty and the historical per unit repair costs and return rates.

Product warranty activity for the
twelve months ended September 28, 2003 is as follows:

|(000s omitted) | Balance at September 29, 2002 | Accruals for Warranties Issued During the Period | Decrease to Preexisting Warranties | Balance at September 28, 2003
|--------------- | ----------------------------- | ------------------------------------------------ | ---------------------------------- | -----------------------------
|               
|                | $1,723                        | $961                                             | $575                               | $2,109                       

Foreign Currency: During 2002,
the Company changed the functional currency for the majority of its foreign subsidiaries
from the U.S. Dollar to the local currency. This change stems from a majority of the
foreign subsidiary cash flows now being denominated in the local currency. The functional
currency for each of the Companys subsidiaries is each countrys local
currency. All assets and liabilities are translated into U.S. dollar equivalents at the
exchange rate in effect on the balance sheet date. Revenues and expenses are translated at
the average exchange rates for the year. Translation gains or losses are recorded in
consolidated stockholders equity as an element of accumulated other comprehensive
income. Foreign currency gain/ (loss) recorded as other income in the consolidated income
statement totaled $932,000, ($171,000), and $11,000 in 2003, 2002, and 2001,
respectively.

Stock-Based Compensation: In
December 2002, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standard (SFAS) No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure  an amendment of SFAS No. 123",
which provides optional transition guidance for those companies electing to voluntarily
adopt the accounting provisions of SFAS No. 123. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. As permitted by
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation (SFAS 123), the Company measures compensation expense for
its stock-based compensation plans using the intrinsic method prescribed by Accounting
Principles Board No. 25, Accounting for Stock Issued to Employees. In
accordance with SFAS 123, the Company has provided the pro forma disclosures of the effect
on net income and earnings per share as if SFAS 123 had been applied in measuring
compensation expense for all periods presented.

No stock-based employee compensation
cost is reflected in net income, as all options granted under those plans had an exercise
price equal to the market value of the underlying common stock on the grant date. The
following table illustrates the effect on net income and earnings per share if the Company
had applied the fair value recognition provisions of Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation, to the stock-based
employee compensation. The estimated fair value of each option is calculated using the
Black-Scholes option-pricing model:

|(000's omitted, except per share data)                                                                                                        | 2003 | 2002 | 2001
|--------------------------------------------------------------------------------------------------------------------------------------------- | ---- | ---- | ----
|                                                                                                                                             
|Net income-as reported                                                                                                                        |      |      | $   
|Deduct: Total stock-based employee compensation expense determined under fair value based methods for
 all awards, net of related tax effects |      |      |     
|                                                                                                                                              |     
|Net income-pro forma                                                                                                                          |      |      | $   
|                                                                                                                                              |     
|Earnings per share:                                                                                                                           |      |     
|Basic - as reported                                                                                                                           |      |      | $   
|                                                                                                                                              |     
|Basic - pro forma                                                                                                                             |      |      | $   
|                                                                                                                                              |     
|Diluted - as reported                                                                                                                         |      |      | $   
|                                                                                                                                              |     
|Diluted - pro forma                                                                                                                           |      |      | $   
|                                                                                                                                              |     

The above pro forma amounts may not
be representative of the effects on reported net income for future years. The fair value
of each option grant is estimated on the date of the grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions used for grants in
2003, 2002 and 2001:

|                        | 2003    | 2002    | 2001   
|----------------------- | ------- | ------- | -------
|                       
|Dividend yield          | 0%      | 0%      | 0%     
|Expected volatility     | 71.8%   | 74.1%   | 64.3%  
|Risk-free interest rate | 3.69%   | 4.19%   | 5.13%  
|Expected lives          | 5 years | 5 years | 5 years

Earnings per Share: Basic
earnings per share are calculated based upon the weighted average shares of common stock
outstanding during the period. Diluted earnings per share is calculated based upon the
weighted average shares of common stock outstanding, plus the dilutive effect of stock
options, calculated using the treasury stock method. The shares used for basic earnings
per common share and diluted earnings per common share are reconciled as follows:

|(000's omitted)                                           | 2003  | 2002  | 2001 
|--------------------------------------------------------- | ----- | ----- | -----
|                                                         
|Average shares outstanding for basic earnings per share   | 9,030 | 8,919 | 8,847
|Dilutive effect of stock options                          | 174   | 239   | 250  
|                                                          |      
|Average shares outstanding for diluted earnings per share | 9,204 | 9,158 | 9,097
|                                                          |      

Use of Estimates: The
preparation of the financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Comprehensive Income: The
Company computes comprehensive income in accordance with Statement of Financial Accounting
Standards No. 130 Reporting Comprehensive Income (SFAS 130). SFAS
130 establishes standards for the reporting and display of comprehensive income and its
components in the financial statements. Other comprehensive income, as defined, includes
all changes in equity during a period from non-owner sources, such as unrealized gains and
losses on available-for-sale securities and the effect of foreign currency translation.
Accumulated balances for each element of other comprehensive loss were as follows:

|(000's omitted)                                          | 2003 | 2002
|-------------------------------------------------------- | ---- | ----
|                                                        
|Unrealized gain (loss) on available-for-sales securities |      |     
|Cumulative foreign currency translation                  |      |     
|                                                         |     
|Accumulated other comprehensive loss                     |      |     
|                                                         |     

Recent Accounting
Pronouncements: In December 2002, the FASB issued Interpretation No. 45 (FIN
45), Guarantors Accounting and Disclosure Requirements,
which requires the disclosure of any guarantees in place prior to December 31, 2002 and
the recognition of a liability for the fair value of any guarantees entered into or
modified after that date. The adoption of FIN 45 had no impact on the Companys
financial position or results of operations. Disclosure requirements of FIN 45 are
included in Note A to the Companys consolidated financial statements.

In January 2003, the FASB issued
Interpretation No. 46 (FIN 46), Consolidation of Variable Interest
Entities, to clarify the conditions under which the assets, liabilities and
activities of another entity should be consolidated into the financial statements of a
company. FIN 46 requires the consolidation of a variable interest entity by a company that
bears the majority of the risk of loss from the variable interest entitys (VIE)
activities or is entitled to receive the majority of the variable interest entitys
residual returns. In October 2003, the FASB released for public comment a proposed
exposure draft clarifying certain aspects of FIN 46 and providing certain entities with
exemptions from the requirements of FIN 46. If approved, the exposure draft would apply to
financial statements for the first period ending after December 15, 2003. The provisions
of FIN 46 are required to be adopted by the Company for interests in VIEs
held by the Company prior to February 1, 2003 in the first quarter of fiscal 2004 and
immediately for any new interests in VIEs acquired after February 1, 2003. The Company
holds equity investments in Revivant Corporation, LifeCOR, Inc., Advanced Circulatory
Systems, Inc. (formerly ResQSystems, Inc.) and AED@Home with a total carrying value of
approximately $12.8 million. Our fourth quarter fiscal 2003 investment in Revivant
Corporation does not represent an interest in a VIE. The Company is currently evaluating
whether the other investments qualify as VIEs.

In April 2003, the FASB issued SFAS
No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities, which is effective for contracts entered into or modified after
June 30, 2003 and for hedging relationships designated after June 30, 2003. SFAS No. 149
amends and clarifies the accounting for derivative instruments and hedging activities
under SFAS No. 133 Accounting for Derivative Instruments and Hedging
Activities, as amended by SFAS No. 137 and SFAS No. 138. We have evaluated
SFAS No. 149 and determined that it did not have an impact on our Companys
consolidated financial statements.

In May 2003, the FASB issued SFAS No.
150, Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity. SFAS No. 150 changes the accounting for certain financial
instruments that, under previous guidance, could be classified as equity or
mezzanine equity, by now requiring those instruments to be classified as
liabilities (or assets in some circumstances) in the statement of financial position.
Further, SFAS No. 150 requires disclosure regarding the terms of those instruments and
settlement alternatives. The guidance in SFAS 150 generally is effective for all financial
instruments entered into or modified after May 31, 2003, and is otherwise effective at the
beginning of the first interim period beginning after June 15, 2003. We have evaluated
SFAS No. 150 and determined that it does not have an impact on our Companys
consolidated financial statements.

In November 2002, the Emerging Issues
Task Force (EITF) reached a consensus on Issue No. 00-21, Revenue
Arrangements with Multiple Deliverables. EITF Issue No. 00-21 provides guidance on
how to account for arrangements that involve the delivery or performance of multiple
products, services and/or rights to use assets. The provisions of EITF Issue No. 00-21
apply to revenue arrangements entered into in fiscal periods beginning after June 15,
2003, including interim periods. The adoption of EITF Issue No. 00-21 has had no material
impact on our Companys consolidated financial statements.

# Note B-Marketable
Securities

Investments in marketable securities
and debt securities are classified as available-for-sale at September 28, 2003.
Available-for-sale securities consist of corporate obligations of $20.0 million and $10.1
million as of September 28, 2003 and September 29, 2002, respectively.

The securities are carried at fair
value, with unrealized gains and losses reported in stockholders equity as a
separate component of accumulated other comprehensive income. At September 28, 2003 and
September 29, 2002, the investment portfolio had gross unrealized gains (losses) of
($11,000) and $32,000, respectively. Net loss reclassified from accumulated other
comprehensive income to earnings during 2003 totaled $27,000. The Company recognized
realized gains of $127,000 and losses of $32,000 on sales of available-for-sale securities
in 2003. The dollar value of investments maturing within one year is $2.1 million, between
one and five years is $16.3 million, and between six and ten years is $1.6 million.

# Note C-Investments

The Company holds an investment in
the common stock of LifeCOR, Inc. (LifeCOR), a private medical device
corporation. In November 2002, the Company invested an additional $1.5 million in the
common stock of LifeCOR, and entered into an agreement to distribute LifeCORs
products in the North American Hospital market, and also entered into a patent
cross-licensing agreement. The Chairman of LifeCOR is also a director of the Company. The
total investment in LifeCOR, Inc. as of September 28, 2003 totaled $3.5 million and
represented approximately 5% of LifeCORs outstanding common stock as of September
28, 2003.

In January 2003, the Company invested
$1.3 million in the common stock of Advanced Circulatory Systems, Inc. (formerly
ResQSystems, Inc.), a development stage medical device corporation. The Companys
investment in Advanced Circulatory Systems, Inc. (ACSI) represented
approximately 8% of ACSIs outstanding common stock as of September 28, 2003.

In August 2003, the Company invested
a total of $12 million in Revivant Corporation (Revivant), a private medical
device corporation. Of the $12 million invested, $7 million was invested in the preferred
stock of Revivant and $5 million represented debt financing (Note). The
Companys ownership percentage in Revivant approximates 15% with an option to acquire
the remaining outstanding shares of Revivant at any time through October 4, 2004. The
terms of the Note require quarterly interest payments with an interest rate of 10% per
year maturing on June 30, 2007.

The Company accounts for these
investments at cost, which approximates market.

Note D-Prepaid Expenses and Other
Current Assets
Prepaid expenses and other current assets consist of:

|(000's omitted)                                 | Sept. 28, 2003 | Sept. 29, 2002
|----------------------------------------------- | -------------- | --------------
|                                               
|Deferred income taxes-Note G                    | $3,151         | $2,046        
|Other                                           | 1,891          | 2,003         
|                                                |               
|Total prepaid expenses and other current assets | $5,042         | $4,049        
|                                                |               

# Note E-Accrued Expenses
and Other Liabilities

Accrued expenses and other
liabilities consist of:

|(000's omitted)                                 | Sept. 28, 2003 | Sept. 29, 2002
|----------------------------------------------- | -------------- | --------------
|                                               
|Accrued salaries and wages and related expenses | $  7,477       | $  5,193      
|Accrued warranty expense                        | 2,109          | 1,723         
|Deferred revenue                                | 1,864          | 2,180         
|Deferred lease incentives                       | 2,789          | -             
|Other accrued expenses                          | 8,160          | 3,684         
|                                                |               
|Total accrued expenses and other liabilities    | $22,399        | $12,780       
|                                                |               

# Note F-Indebtedness

The Company maintains an unsecured,
uncommitted working capital line of credit with its bank. This line of credit bears
interest at the banks base rate (4.00% at September 28, 2003). The full amount of
the line ($12.0 million) was available to the Company at September 28, 2003.

# Note G-Income Taxes

The provision for income taxes
consists of the following:

|(000's omitted) | 2003 | 2002 | 2001
|--------------- | ---- | ---- | ----
|               
|Federal:        |      |      |     
|Current         |      |      | $   
|Deferred        |      |      |     
|                |     
|                |      |      |     
|State:          |      |     
|Current         |      |      |     
|Deferred        |      |      |     
|                |     
|                |      |      |     
|Foreign:        |      |     
|Current         |      |      |     
|Deferred        |      |      |     
|                |     
|                |      |      |     
|                |     
|                |      |      | $   
|                |     

The following table allocates income
before taxes between domestic and foreign jurisdictions:

|(000's omitted) | 2003    | 2002    | 2001   
|--------------- | ------- | ------- | -------
|               
|Domestic        | $13,557 | $13,965 | $11,337
|Foreign         | 5,622   | 1,209   | 276    
|                |        
|                | $19,179 | $15,174 | $11,613
|                |        

The income tax provision differed
from the statutory federal income tax provision as follows:

|(000's omitted)                            | 2003 | 2002 | 2001
|------------------------------------------ | ---- | ---- | ----
|                                          
|Statutory income taxes                     |      |      | $   
|Tax credits, federal and state             |      |      |     
|State income taxes, net of federal benefit |      |      |     
|Unbenefited foreign loss                   |      |      |     
|Foreign income taxes at different rates    |      |      |     
|Permanent differences                      |      |      |     
|Other                                      |      |      |     
|                                           |     
|                                           |      |      | $   
|                                           |     

Deferred income taxes reflect the net
tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Companys deferred tax assets and liabilities are as
follows:

|(000's omitted)                    | Sept. 28, 2003 | Sept. 29, 2002
|---------------------------------- | -------------- | --------------
|                                  
|Deferred tax assets:               |                |               
|Accounts receivable and inventory  | $1,378         | $1,080        
|Product warranty accruals          | 1,004          | 785           
|Purchased research and development | 199            | 221           
|Other liabilities                  | 1,451          | 566           
|                                   |               
|Total deferred tax assets          | 4,032          | 2,652         
|Deferred tax liabilities:         
|Accelerated tax depreciation       | 2,063          | 1,539         
|Prepaid expenses                   | 320            | 215           
|                                   |               
|Total deferred tax                 | 2,383          | 1,754         
|liabilities                       
|                                   |               
|Net deferred tax asset             | $1,649         | $   898       
|                                   |               

# Note H-Commitments and
Contingencies

In the course of normal operations,
the Company is involved in litigation arising from commercial disputes, claims from former
employees and product liability claims, none of which management believes will have a
material effect on the Companys consolidated financial position or results of
operations.

On November 25, 2002, the Company
announced a settlement of a patent infringement lawsuit initiated in March 2002 by Cardiac
Science, Inc. The settlement includes the cross-licensing of a number of patents between
the Company and Cardiac Science, Inc. The Company paid an initial licensing fee and will
pay certain ongoing royalties to Cardiac Science, Inc. These amounts did not and will not
have a material impact on our consolidated financial position and results of operations.

The Company leases certain office and
manufacturing space under operating leases. The Companys office leases are subject
to adjustments based on actual floor space occupied. The leases also require payment of
real estate taxes and operating costs. In addition to the office leases, the Company
leases automobiles for business use by a portion of the sales force. Listed below are the
future minimum rental payments required under operating leases with non-cancelable terms
in excess of one year at September 28, 2003.

|                |            |       
|--------------- | ---------- | ------
|(000's omitted) | 2004       | $1,445
|                | 2005       | 1,405 
|                | 2006       | 1,278 
|                | 2007       | 1,115 
|                | 2008       | 1,088 
|                | Thereafter | 2,992 
|                |           
|                |            | $9,323
|                |           

Total rental expense under operating
leases was approximately $1,467,000, $1,372,000, and $1,252,000 in 2003, 2002, and 2001,
respectively.

# Note IHedging
Activities

The
Company operates globally, and its earnings and cash flow are exposed to market risk from
changes in currency exchange rates. The Company addresses these risks through a risk
management program that includes the use of derivative financial instruments. The program
is operated pursuant to documented corporate risk management policies. The Company does
not enter into any derivative transaction for speculative purposes.

The Company uses foreign currency
forward contracts to manage its currency transaction exposures. These currency forward
contracts are not designated as cash flow, fair value or net investment hedges under SFAS
133 and therefore, are marked-to-market with changes in fair value recorded to earnings.
These derivative instruments do not subject the Companys earnings or cash flows to
material risk since gains and losses on those derivatives offset losses and gains on the
assets and liabilities being hedged. These derivative instruments are entered into for
periods consistent with the currency transaction exposures, generally three months.

The Company had one foreign currency
forward contract outstanding in the notional amount of approximately 4.0 million Euros at
September 28, 2003. The contract serves as a hedge of a substantial portion of our
Euro-denominated intercompany balances. The fair value of the Euro derivative foreign
currency forward contract outstanding at September 28, 2003 was approximately $4.6
million.

Net recognized losses from foreign
currency forward contracts totaled $357,000 during 2003 and are included in
investment and other income in the consolidated statement of income. We did
not enter into any derivative contracts in fiscal 2002 or 2001.

# Note
J-Stockholders Equity

Preferred Stock: On June 8,
1998, the Companys Board of Directors adopted a Shareholder Rights Plan. In
connection with the Shareholder Rights Plan, the Board of Directors declared a dividend
distribution of one Preferred Stock purchase right for each outstanding share of Common
Stock to stockholders of record as of the close of business day on June 9, 1998.
Initially, these rights are not exercisable and trade with the shares of ZOLLs
Common Stock. Under the Shareholder Rights Plan, the rights generally become exercisable
if a person becomes an acquiring person by acquiring 15% or more of the Common
Stock of ZOLL, if a person who owns 10% or more of the Common Stock of ZOLL is determined
to be an adverse person by the Board of Directors or if a person commences a
tender offer that would result in that person owning 15% or more of the Common Stock of
ZOLL. Under the Shareholder Rights Plan, a shareholder of ZOLL who beneficially owns 15%
or more of the Companys Common Stock as of June 9, 1998 generally will be deemed an
acquiring person if such shareholder acquires additional shares of the
Companys Common Stock. In the event that a person becomes an acquiring
person or is declared an adverse person by the Board, each holder of a
right (other than the acquiring person or the adverse person) would be entitled to acquire
such number of shares of Preferred Stock which are equivalent to ZOLL Common Stock having
a value of twice the then-current exercise price of the right. If ZOLL is acquired in a
merger or other business combination transaction after any such event, each holder of a
right would then be entitled to purchase, at the then-current exercise price, shares of
the acquiring companys Common Stock having a value twice the exercise price of the
right. The Board of Directors is authorized to fix the designations, relative rights,
preferences and limitations on the Preferred Stock at the time of issuance.

Stock Option Plans: The
Companys 1983, 1992 and 2001 stock option plans provide for the granting of options
to officers and other key employees to purchase the Companys Common Stock at a
purchase price, in the case of incentive stock options, at least equal to the fair market
value per share of the outstanding Common Stock of the Company at the time the option is
granted, as determined by the Compensation Committee of the Board of Directors. Options
are no longer granted under the 1983 and 1992 plans. The options become exercisable
ratably over two or four years and have maximum life of 10 years. The Companys
Non-employee Director Stock Option Plan provides for the granting of options to purchase
shares of Common Stock to Directors of the Company who are not also employees of the
Company or any of its subsidiaries. The Non-employee Director options vest in equal annual
installments over a four year period. The Non-employee Director options may be exercised
at a price equal to the fair market value of the Common Stock on the date the option is
granted.

The number of shares authorized for
these plans was 2,980,000, of which 127,000 remain available for grant at September 28,
2003. Approximately 1,416,000 shares of Common Stock are reserved for future issuance
under the Companys stock option plans as of September 28, 2003.

---

Activity as to stock options under
all of the plans is as follows:

|                                                                              | 2003 | 2002 | 2001
|----------------------------------------------------------------------------- | ---- | ---- | ----
|
|                                                                             
|Outstanding at the beginning of the year                                      |      |      |     
|Granted                                                                       |      |      |     
|Exercised                                                                     |      |      |     
|Cancelled                                                                     |      |      |     
|                                                                             
|Outstanding at the end of the year                                            |      |      |     
|                                                                             
|                                                                              |      |      |     
|Available for grant at the end of the year                                    |      |      |     
|                                                                              |      |      |     
|Weighted-average fair value of options exercisable at the end of the year     |      |      |     
|                                                                              |      |      |     
|Weighted-average exercise price of options exercisable at the end of the year |      |      |     

The following table summarizes
information about stock options outstanding and exercisable at September 28, 2003.

|(000s omitted, except per share
data) | Options Outstanding | Options Exercisable
|-------------------------------------- | ------------------- | -------------------
|
|                                      
|$0.02                                  | 1                   | *                  
|$6.57-$8.75                            | 143                 |                    
|$9.56-$12.31                           | 55                  |                    
|$20.25-$25.88                          | 299                 |                    
|$29.08-$33.76                          | 210                 |                    
|$33.94-$39.92                          | 501                 |                    
|$40.13-42.94                           | 35                  |                    
|$43.13-$51.25                          | 45                  |                    
|                                      
|                                       | 1,289               |                    

* represents options granted to a
subsidiarys employee prior to its acquisition by the Company.

# Note K-Employee Benefit
Plan

Defined contribution retirement
plan: ZOLL has a defined contribution retirement plan (the Plan) which
contains a 401(k)" program for all employees with three months of service who
have attained 21 years of age. Participants in the Plan may contribute up to 15% of their
eligible compensation. The Company may make discretionary matching contributions to the
Plan in an amount determined by its Board of Directors. The employer match is currently
set at 25% of the employee contribution up to 7% of eligible compensation. The Company
recorded expense of approximately $424,000, $293,000, and $159,000 in 2003, 2002, and
2001, respectively.

401(k)
          Salary Deferral Plan: Beginning in 1998, Pinpoint has maintained a
          retirement savings plan (the Pinpoint Plan) pursuant to which
          eligible employees may defer compensation for income tax purposes under section
          401(k) of the Internal Revenue code of 1986. Participants in the Pinpoint Plan
          may contribute up to 15% of their eligible compensation, which contributions are
          matched by the Company at 50% of the employee contribution up to 6% of eligible
          compensation. The Company may make discretionary matching contributions to the
          Pinpoint Plan in an amount determined by its Board of Directors. The Company
          recorded expense related to the Pinpoint Plan of approximately $100,000,
          $73,000, and $57,000 in 2003, 2002, and 2001, respectively.

# Note L-Segment and
Geographic Information

Segment Information: The
Company operates in a single business segment: the design, manufacture and marketing of an
integrated line of proprietary non-invasive cardiac resuscitation devices, and systems
used for emergency resuscitation of cardiac arrest victims. In order to make operating and
strategic decisions, ZOLLs chief operating decision maker evaluates revenue
performance based on the worldwide revenues of four customer/product categories but, due
to shared infrastructures, profitability based on an enterprise-wide measure. These
customer/product categories consist of (1) the sale of cardiac resuscitation devices and
accessories to the North American hospital market, (2) the sale of the same items and data
collection management software to North American pre-hospital market, (3) the sale of
disposable/other products in North America, (4) the sale of cardiac resuscitation devices
and accessories and disposable electrodes to the international market.

Net sales by customer/product
categories were as follows:

|(000's omitted)                              | 2003 | 2002 | 2001    |  
|-------------------------------------------- | ---- | ---- | ------- | -
|Hospital Market-North America                |      | $    | 63,558  | $
|Pre-hospital Market-North America            |      |      | 55,357  |  
|Other-North America                          |      |      | 19,602  |  
|International Market-excluding North America |      |      | 46,086  |  
|                                             |      | $    | 184,603 | $

The Company reports assets on a
consolidated basis to the chief operating decision maker.

Geographic information: Net
sales by major geographical area, determined on the basis of destination of the goods, are
as follows:

|(000's omitted) | 2003 | 2002 | 2001    |  
|--------------- | ---- | ---- | ------- | -
|United States   |      | $    | 137,510 | $
|Foreign         |      |      | 47,093  |  
|                |      | $    | 184,603 | $

Long-lived assets located outside the
United States are not material. In each of the years in the three year period ended
September 28, 2003, no single customer represented over 10% of the Companys
consolidated net sales.

# Note M-Quarterly
Financial Data (Unaudited)

Summarized quarterly financial data
for 2003 and 2002 is as follows:

|                                                 | Quarter Ended
|------------------------------------------------ | -------------
|
|2003                                             |              
|Net sales                                        |              
|Gross profit                                     |              
|Income from operations                           |              
|Net income                                       |              
|Basic earnings per common share                  |              
|Diluted earnings per common and equivalent share |              

|                                                 | Quarter Ended
|------------------------------------------------ | -------------
|
|2002                                             |              
|Net sales                                        |              
|Gross profit                                     |              
|Income from operations                           |              
|Net income                                       |              
|Basic earnings per common share                  |              
|Diluted earnings per common and equivalent share |              

Item 9. Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure.

Not Applicable.

# Item 9A. Controls and
Procedures.

As of the end of the period covered
by this report, an evaluation had been performed under the supervision and with the
participation of the Companys management, including the Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures. Based upon that evaluation, the
Companys management, including the CEO and CFO, concluded that the Companys
disclosure controls and procedures were effective as of September 28, 2003. There have
been no significant changes in the Companys internal controls over financial
reporting that occurred during the quarter ending September 28, 2003, that have materially
affected, or are reasonably likely to materially affect our internal control over
financial reporting.

# Part III

# Item 10. Directors and
Executive Officers of the Registrant.

The information appearing in our
Proxy Statement for our 2004 Annual Meeting of Stockholders (the Proxy
Statement) under the caption Proposal 1  Election of a Class of
Directors is incorporated herein by reference.

Information regarding Executive
Officers of the Company is detailed below:

# Executive Officers of
Registrant

|Name              | Age | Position                                                    
|----------------- | --- | ------------------------------------------------------------
|Richard A. Packer | 46  | Chairman, Chief Executive Officer and President             
|A. Ernest Whiton  | 42  | Vice President of Administration and Chief Financial Officer
|Steven K. Flora   | 52  | Vice President, North American Sales                        
|E.J. Jones        | 61  | Vice President, International Sales                         
|Donald R. Boucher | 51  | Vice President, Research and Development                    
|Ward M. Hamilton  | 56  | Vice President, Marketing                                   
|John P. Bergeron  | 52  | Vice President and Corporate Treasurer                      
|Edward T. Dunn    | 50  | Vice President, Operations                                  
|Vane P. Clayton   | 44  | President, Pinpoint Technologies                            

Mr.
          Packer joined the Company in 1992 and in November 1999 was appointed Chairman of
          the Board and Chief Executive Officer. Mr. Packer served as President, Chief
          Operating Officer and director from 1996 to his appointment as CEO. From 1992 to
          1996 he served as Chief Financial Officer and Vice President of Operations of
          the Company. From 1987 to 1992 Mr. Packer served as Vice President of various
          functions for Whistler Corporation, a consumer electronics company. Prior to
          this, Mr. Packer was a manager with the consulting firm of PRTM/KPMG,
          specializing in operations of high technology companies. Mr. Packer received
          B.S. and M. Eng. degrees from the Rensselaer Polytechnic Institute and a M.B.A.
          from the Harvard Graduate School of Business Administration. Mr. Packer serves
          as a director of LifeCOR, Inc. and as a member of its compensation committee.

Mr.
          Whiton joined the Company as Vice President of Administration and Chief
          Financial Officer in January 1999. Prior to joining the Company, Mr. Whiton was
          Vice President and Chief Accounting Officer of Ionics, Inc., a global
          separations technology company, which he joined in 1993. Prior to Ionics, he was
          a manager at Price Waterhouse. Mr. Whiton has received a B.S. in Accounting from
          Bentley College and a M.B.A. from the Harvard Graduate School of Business
          Administration.

Mr.
          Flora joined the Company as Vice President of North American Sales in September
          1998. Prior to joining the Company, Mr. Flora served from 1981 to 1998 in
          various positions with Marquette Medical systems, a manufacturer of
          cardiovascular and physiological monitoring systems, most recently as Vice
          President of Sales. Mr. Flora received his B.S. in Biology from the University
          of Illinois.

Mr.
          Jones joined the Company as Vice President of International Sales in November
          1998. Prior to joining the Company, Mr. Jones was Vice President of Operations
          with Apple Medical Corporation. He also spent 15 years with Millipore
          Corporation, holding various positions in Domestic and International Sales. Mr.
          Jones holds a B.S. in Microbiology/Biochemistry from the University of Illinois
          and is a graduate of the Advanced Management Program (AMP) from the Harvard
          Graduate School of Business Administration.

Mr.
          Boucher joined the Company as Vice President of Research and Development in
          December 1993. Prior to joining the Company, Mr. Boucher served from 1977 to
          1993 with Corometrics Medical Systems, Inc., a manufacturer of fetal and
          neonatal monitors, most recently as Vice President of Engineering. Mr. Boucher
          received a M.B.A. from the University of Connecticut, an M.S.E. in
          bioengineering from the University of Pennsylvania, and a B.S. in engineering
          from Northeastern University.

Mr.
          Hamilton joined the Company as Vice President of Marketing in February 1992.
          Prior to this time, Mr. Hamilton served from 1985 to 1991 as Director of New
          Business Development and Director of Marketing for ACLS products for Laerdal
          Medical Corporation, a manufacturer of portable automated defibrillators, and
          from 1977 to 1985 as Marketing Manager for defibrillators and non-invasive blood
          pressure monitors for Datascope Corporation. Mr. Hamilton received a B.A. in
          political science from Hartwick College and a M.P.A. from the University of
          Southern California.

Mr.
          Bergeron joined the Company as Vice President and Corporate Treasurer in August
          2000. Prior to joining the Company, Mr. Bergeron was Vice President at Ionics
          Corporation, a global separations technology company, where he also served as
          Corporate Treasurer and Tax Director. Prior to joining Ionics in 1988, Mr.
          Bergeron served in a variety of tax positions at other multinational
          corporations. Mr. Bergeron received a B.B.A. from the University of
          Massachusetts at Amherst and a M.S. in Taxation from Bentley College.

Mr.
          Dunn joined the Company as Director of Materials in April 1995. In November
          1997, he was appointed Vice President of Operations. Prior to joining the
          Company, Mr. Dunn was Materials Manager at Baird Corporation, a manufacturer of
          spectrometers and night vision devices, which he joined in 1986. Prior to
          joining Baird, Mr. Dunn was Manufacturing Manager at Chelsea Clock Company, a
          manufacturer of marine clocks. Mr. Dunn received a B.S. in Industrial
          Engineering from Northeastern University.

Mr.
          Clayton joined the Company as President of Pinpoint Technologies in September of
          2003. Prior to joining the Company, Mr. Clayton was President of TROY Wireless,
          a provider of WIFI and Bluetooth wireless software and hardware products. Prior
          to joining TROY, Mr. Clayton was COO and later CEO of SOS Wireless
          Communications. Prior to SOS, Mr. Clayton served from 1988 to 1993 at Raychem
          Corp, with his most recent role as sales manager with the EloTouch division,
          which manufactures touch-screen products. Mr. Clayton has received a B.S. in
          engineering from Purdue University and a M.B.A. from the Harvard Graduate School
          of Business Administration.

The Company has
adopted a Code of Ethics that applies to its principal executive officer, principal
financial officer and controller. This Code of Ethics was ratified by the
Board of Directors in December 2003.

# Item 11. Executive
Compensation.

The information appearing in the
Proxy Statement under the caption Proposal 1  Election of a Class of
Directors-Executive Compensation is incorporated herein by
reference.

# Item 12. Security
Ownership of Certain Beneficial Owners and Management.

The information appearing in the
Proxy Statement under the captions Proposal 1  Election of a Class of
Directors and Other Matters  Principal and Management Stockholders is
incorporated herein by reference.

# Item 13. Certain
Relationships and Related Transactions.

The information appearing in the
Proxy Statement under the caption Proposal 1  Election of a Class of
Directors-Certain Relationships and Related Party Transactions is incorporated herein by reference.

# Item 14. Principal
Accountant Fees and Services.

The information appearing in the
Proxy Statement under the caption Proposal 1  Election of a Class of Directors-Independent Auditors is
incorporated herein by reference.

---

# SIGNATURES

Pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized, on
December 18, 2003.

|    |                                     
|--- | ------------------------------------
|    | ZOLL Medical Corporation            
|By: | /s/ Richard A. Packer               
|    | Richard A. Packer                   
|    | Chairman and Chief Executive Officer

Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities on the dates indicated.

|SIGNATURE                   | TITLE                                                                         | DATE             
|--------------------------- | ----------------------------------------------------------------------------- | -----------------
|/s/ Richard A. Packer       | Chairman, Chief Executive Officer and President (Principal Executive Officer) | December 18, 2003
|                           
|Richard A. Packer          
|                            |                                                                               |                  
|/s/ A. Ernest Whiton        | Chief Financial Officer (Principal Financial and Accounting Officer)          | December 18, 2003
|                           
|A. Ernest Whiton           
|                            |                                                                               |                  
|/s/ Willard M. Bright, Ph.D | Director                                                                      | December 18, 2003
|                           
|Willard M. Bright, Ph.D    
|                            |                                                                               |                  
|/s/ Thomas M. Claflin, II   | Director                                                                      | December 18, 2003
|                           
|Thomas M. Claflin, II      
|                            |                                                                               |                  
|/s/ James W. Biondi, M.D    | Director                                                                      | December 18, 2003
|                           
|James W. Biondi, M.D       
|                            |                                                                               |                  
|/s/ M. Stephen Heilman, M.D | Director                                                                      | December 18, 2003
|                           
|M. Stephen Heilman, M.D    
|                            |                                                                               |                  
|/s/ Daniel M. Mulvena       | Director                                                                      | December 18, 2003
|                           
|Daniel M. Mulvena          
|                            |                                                                               |                  
|/s/ Benson F. Smith         | Director                                                                      | December 18, 2003
|                           
|Benson F. Smith            
|                            |                                                                               |                  
|/s/ Robert J. Halliday      | Director                                                                      | December 18, 2003
|                           
|Robert J. Halliday         

---

# SCHEDULE II 
VALUATION AND QUALIFYING ACCOUNTS

|Classifications                 | Balance Beginning of Period | Additions Charged to Costs and Expenses | Deductions | Balance At End of Period
|------------------------------- | --------------------------- | --------------------------------------- | ---------- | ------------------------
|Year Ended September 28, 2003   |                             |                                         |            |                         
|Allowance for doubtful accounts |                             | $3,462,000                              |            | $1,694,000              
|Year Ended September 29, 2002   |                            
|Allowance for doubtful accounts |                             | $2,780,000                              |            | $1,009,000              
|Year Ended September 30, 2001   |                            
|Allowance for doubtful accounts |                             | $1,895,000                              |            | $1,648,000              

---

# Part IV

# Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

|       |                                                                                                                                                                                                                                               
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)(1) | The following Consolidated Financial Statements, Notes thereto and Independent Auditors' Report are set forth under Item 8:                                                                                                                   
|       | Report of Independent Auditors                                                                                                                                                                                                                
|       | Consolidated Balance Sheets                                                                                                                                                                                                                   
|       | Consolidated Income Statements                                                                                                                                                                                                                
|       | Consolidated Statements of Stockholders' Equity and Comprehensive Income                                                                                                                                                                      
|       | Consolidated Statements of Cash Flows                                                                                                                                                                                                         
|       | Notes to Consolidated Financial Statements                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                               
|(a)(2) | The following Consolidated Financial Statement Schedule is included herein:                                                                                                                                                                   
|       | Schedule II - Valuation and Qualifying Accounts                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                               
|       | All other schedules have been omitted since the required information is not presented, the amounts are not
 sufficient to require submission of the schedules or because the information is included in the consolidated financial statements.
|       |                                                                                                                                                                                                                                               
|(a)(3) | The following is a complete list of Exhibits filed or incorporated by reference as part of this report:                                                                                                                                       
|       |                                                                                                                                                                                                                                               
|3.1    | Restated Articles of Organization. (2)                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                               
|3.2    | Amended and Restated By-laws. (2)                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                               
|3.3    | Shareholders Rights Plan. (5)                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                               
|10.1   | 2001 Stock option Plan. (1)                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                               
|10.2   | 1992 Stock Option Plan. (2)                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                               
|10.3   | 1983 Incentive Stock Option Plan, as amended and restated February 6, 1990. (2)                                                                                                                                                               
|       |                                                                                                                                                                                                                                               
|10.4   | Revolving Loan and Security Agreement dated March 9, 1992 between the Company and Brown Brothers Harriman & Co. (2)                                                                                                                           
|       |                                                                                                                                                                                                                                               
|10.10  | Employment Agreement dated July 19, 1996 between the Company and Richard A. Packer regarding Mr. Packer's employment. (3)                                                                                                                     
|       |                                                                                                                                                                                                                                               
|10.11  | Non Employee Directors' Stock Option Plan. (6)                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                               
|10.12  | Senior Executive Severance Agreement dated January 21, 2000 between the Company and Richard A. Packer. (7)                                                                                                                                    
|       |                                                                                                                                                                                                                                               
|10.13  | Executive Severance Agreement dated January 26, 2000 between the Company and A. Ernest Whiton. (7)                                                                                                                                            
|       |                                                                                                                                                                                                                                               
|10.14  | Code of Conduct (4)                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                               
|21.1   | Subsidiaries of the Company. (4)                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                               
|23.1   | Consent of Ernst & Young LLP (4)                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                               
|31.1   | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (4)                                                                                                                                       
|       |                                                                                                                                                                                                                                               
|31.2   | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (4)                                                                                                                                       
|       |                                                                                                                                                                                                                                               
|32.1   | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (4)                                                                                                                                       
|       |                                                                                                                                                                                                                                               
|32.2   | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (4)                                                                                                                                       
|       |                                                                                                                                                                                                                                               
|       | Footnotes:                                                                                                                                                                                                                                    
|(1)    | Incorporated by reference from the Company's Registration Statement on Form S-8, under the Securities Act of 1933 (Registration Statement No. 33-3101839).                                                                                    
|       |                                                                                                                                                                                                                                               
|(2)    | Incorporated by reference from the Company's Registration Statement on Form S-1, as amended, under the Securities Act of 1933. (Registration Statement No. 33-47937)                                                                          
|       |                                                                                                                                                                                                                                               
|(3)    | Incorporated by reference from the Company's Annual Report for 1996 on Form 10-K, as amended, filed with
 the Securities and Exchange Commission on December 27, 1996.                                                                        
|      
|(4)    | Filed herewith.                                                                                                                                                                                                                               
|      
|(5)    | Incorporated by reference from the Company's 8-K filed with the Securities and Exchange Commission on
June 11, 1998.                                                                                                                          
|       |                                                                                                                                                                                                                                               
|(6)    | Incorporated by reference from the Company's Registration Statement on Form S-8, under the Securities Act
of 1933 (Registration Statement No. 33-368401).                                                                                     
|       |                                                                                                                                                                                                                                               
|(7)    | Incorporated by reference from the Company's Annual Report for 2000 on Form 10-K, as amended,
filed with the Securities and Exchange Commission on December 29, 2000.                                                                         

---