# UNITED STATESSECURITIES
AND EXCHANGE COMMISSION Washington, DC 20549FORM 10-Q

| | (Mark One)
| | ----------

|[X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
          of 1934
|--- | -------------------------------------------------------------------------------------------------

| | For
the quarterly period ended March 31, 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:1-10207

---

|                                                                                   |                                     
|---------------------------------------------------------------------------------- | ------------------------------------
|ALARIS MEDICAL, INC.                                                              
|                                                                                  
|(Exact name of registrant as specified in its charter)                            
|Delaware                                                                           | 13-3492624                          
|                                                                                  
|(State or other jurisdiction of incorporation or organization)                     | (I.R.S. Employer Identification No.)
|10221 Wateridge Circle, San Diego, CA 92121                                        |                                     
|                                                                                  
|(Address of principal executive offices)
               (Zip Code)                 |                                     
|(858) 458-7000                                                                    
|                                                                                  
|(Registrant's telephone number, including area code)                              
|                                                                                  
|(Former name, former address and former fiscal year, if changed since last report)

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:[   ]

The registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  Yes [|X|] No [  ]

As of  April 11, 2003, the registrant had 60,003,363 shares of Common Stock outstanding.

Page 1 of 33

---

# ALARIS MEDICAL, INC.

---

# INDEX

|                                                                     |     
|-------------------------------------------------------------------- | ----
|PART I. FINANCIAL STATEMENTS                                         |     
|Item 1 - Financial Statements:                                       |     
|                                                                     | Page
|Condensed consolidated statement of operations for                   |     
|the three months ended March 31, 2003 and 2002 (unaudited)           |     
|Condensed consolidated balance sheet at                              |     
|March 31, 2003 (unaudited) and December 31, 2002                     |     
|Condensed consolidated statement of cash flows for                   |     
|the three months ended March 31, 2003 and 2002 (unaudited)           |     
|Condensed consolidated statement of changes                          |     
|in stockholders' equity and comprehensive income for the period from |     
|December 31, 2002 to March 31, 2003 (unaudited)                      |     
|Notes to the condensed consolidated financial statements (unaudited) |     
|Item 2 - Management's Discussion and Analysis of Financial           |     
|Condition and Results of Operations                                  |     
|Item 3 - Quantitative and Qualitative Disclosures About Market Risk  |     
|Item 4 - Controls and Procedures                                     |     
|PART II. OTHER INFORMATION                                           |     
|Item 6 - Exhibits and Reports on Form 8-K                            |     

We have
registered,  applied to register or are using the following trademarks referred to in this document:
 ALARIS®, ALARIS
Medical Systems®, Guardrails®, Medication Safety at the Point of Care, Medley , and SmartSite®.

- 2 -

---

# FORM 10  Q PART 1  ITEM 1FINANCIAL STATEMENTS
ALARIS MEDICAL, INC.CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (Unaudited)

(Dollar and share
amounts in thousands, except per share data)

---

|                                                    | Three Months Ended March 31, | 
|--------------------------------------------------- | ---------------------------- | 
|
|
|Sales                                               |                              | 
|Cost of sales                                       |                              | 
|                                                    |                              | 
|Gross profit                                        |                              | 
|Selling and marketing expenses                      |                              | 
|General and administrative expenses                 |                              | 
|Research and development expenses                   |                              | 
|Restructuring and other non-recurring items         |                              | 
|                                                    |                              | 
|Total operating expenses                            |                              | 
|                                                    |                              | 
|Interest income from sales-type capital leases      |                              | 
|                                                    |                              | 
|Income from operations                              |                              | 
|Other income (expenses):                            |                              | 
|Interest income                                     |                              | 
|Interest expense                                    |                              | 
|Repurchase of debt                                  |                              | 
|Other, net                                          |                              | 
|                                                    |                              | 
|Total other expense                                 |                              | 
|                                                    |                              | 
|Income before income taxes                          |                              | 
|Provision for income taxes                          |                              | 
|                                                    |                              | 
|Net income                                          |                              | 
|                                                    |                              | 
|                                                    |                              | 
|Net income per common share, basic                  |                              | 
|                                                    |                              | 
|                                                    |                              | 
|Net income per common share, diluted                |                              | 
|                                                    |                              | 
|                                                    |                              | 
|                                                    |                              | 
|Weighted average common shares outstanding, basic   |                              | 
|                                                    |                              | 
|                                                    |                              | 
|Weighted average common shares outstanding, diluted |                              | 
|                                                    |                              | 
|                                                    |                              | 

The
accompanying notes are an integral part of these condensed consolidated financial
statements.

-3-

---

|
|
|
|
|
|
|

# ALARIS MEDICAL, INC.
CONDENSED CONSOLIDATED
BALANCE SHEET

(Dollar and share
amounts in thousands, except per share data)

---

# ASSETS

|                                                                  | March 31,
2003 | December 31,
2002
|----------------------------------------------------------------- | -------------- | -----------------
|
|
|Current assets:                                                   |                |                  
|Cash and cash equivalents                                         |                |                  
|Receivables, net                                                  |                |                  
|Inventories                                                       |                |                  
|Prepaid expenses and other current assets                         |                |                  
|                                                                  |                |                  
|Total current assets                                              |                |                  
|                                                                  |                |                  
|Net investment in sales-type capital leases, less current portion |                |                  
|Property, plant and equipment, net                                |                |                  
|Other non-current assets                                          |                |                  
|Goodwill                                                          |                |                  
|Intangible assets, net                                            |                |                  
|                                                                  |                |                  
|                                                                  |                |                  
|                                                                  |                |                  
|                                                                  |                |                  

# LIABILITIES AND STOCKHOLDERS
EQUITY

|                                                                 |  | 
|---------------------------------------------------------------- |  | 
|Current liabilities:                                             |  | 
|Accounts payable                                                 |  | 
|Accrued expenses and other current liabilities                   |  | 
|                                                                 |  | 
|Total current liabilities                                        |  | 
|                                                                 |  | 
|Long-term debt                                                   |  | 
|Other non-current liabilities                                    |  | 
|                                                                 |  | 
|                                                                 |  | 
|Total non-current liabilities                                    |  | 
|                                                                 |  | 
|                                                                 |  | 
|Contingent liabilities and commitments (Note 8)                  |  | 
|                                                                 |  | 
|Stockholders' equity:                                            |  | 
|Non-redeemable preferred
      stock, authorized 9,000 shares,   |  | 
|issued and outstanding: none                                     |  | 
|Common stock, authorized 75,000 shares
at $.01 par value; issued |  | 
|60,433 and
60,045 shares at March 31, 2003 and                   |  | 
|December 31, 2002, respectively                                  |  | 
|Capital in excess of par value                                   |  | 
|Accumulated deficit                                              |  | 
|Treasury stock, at cost, 453 shares issued at March 31, 2003     |  | 
|and December 31, 2002                                            |  | 
|Accumulated other comprehensive loss                             |  | 
|                                                                 |  | 
|Total stockholders' equity                                       |  | 
|                                                                 |  | 
|                                                                 |  | 
|                                                                 |  | 
|                                                                 |  | 

The
accompanying notes are an integral part of these condensed consolidated financial
statements.

-4-

---

# ALARIS MEDICAL, INC.CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (Unaudited)

(Dollars in
thousands)

---

|                                                                 | Three Months Ended March 31, | 
|---------------------------------------------------------------- | ---------------------------- | 
|
|
|Cash flows from operating activities:                            |                              | 
|Net income                                                       |                              | 
|                                                                 |                              | 
|Adjustments to reconcile net income to net cash provided by      |                              | 
|operating activities:                                            |                              | 
|Depreciation and amortization                                    |                              | 
|Net loss (gain) on disposal of property, plant and equipment     |                              | 
|Debt discount and issue costs amortization                       |                              | 
|Accretion of bond interest                                       |                              | 
|Repurchase of debt                                               |                              | 
|(Increase) decrease in assets:                                   |                              | 
|Receivables, net                                                 |                              | 
|Inventories                                                      |                              | 
|Prepaid expenses and other current assets                        |                              | 
|Net investment in sales-type capital leases, non-current portion |                              | 
|Other non-current assets                                         |                              | 
|Increase (decrease) in liabilities:                              |                              | 
|Accounts payable                                                 |                              | 
|Accrued expenses and other current liabilities                   |                              | 
|Other non-current liabilities                                    |                              | 
|                                                                 |                              | 
|Net cash provided by operating activities                        |                              | 
|                                                                 |                              | 
|Cash flows from investing activities:                            |                              | 
|Net capital expenditures                                         |                              | 
|Patents, trademarks and other                                    |                              | 
|                                                                 |                              | 
|Net cash used in investing activities                            |                              | 
|                                                                 |                              | 
|Cash flows from financing activities:                            |                              | 
|Repurchase of debt                                               |                              | 
|Principal payments on long-term debt                             |                              | 
|Proceeds from exercise of stock options                          |                              | 
|                                                                 |                              | 
|Net cash used in financing activities                            |                              | 
|                                                                 |                              | 
|Effect of exchange rate changes on cash                          |                              | 
|                                                                 |                              | 
|Net increase (decrease) in cash                                  |                              | 
|Cash and cash equivalents at beginning of period                 |                              | 
|                                                                 |                              | 
|Cash and cash equivalents at end of period                       |                              | 
|                                                                 |                              | 

The
accompanying notes are an integral part of these condensed consolidated financial
statements.

-5-

---

# ALARIS MEDICAL, INC.CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS
EQUITY AND COMPREHENSIVE INCOME (Unaudited)

(Dollar and share
amounts in thousands)

---

|                                     | Common StockShares   Amount | Capital in
Excess ofPar Value | AccumulatedDeficit | Treasury StockShares   Amount | Accumulated
Other
Compre-
hensiveLoss | Total
Stock-
holdersEquity | Compre-
hensiveIncome |  |  
|------------------------------------ | --------------------------- | ----------------------------- | ------------------ | ----------------------------- | ------------------------------------- | --------------------------- | --------------------- |  | -
|
|Balance at December 31, 2002         |                             |                               |                    | 60,045                        |                                       | $                           | 600                   |  | $
|                                     |                             |                               |                    |                               |                                       |                             |                       |  |  
|Comprehensive income:                |                             |                              
|Net income for the period            |                             |                               |                    |                               |                                       |                             |                       |  |  
|Equity adjustment from foreign       |                             |                              
|currency translation                 |                             |                               |                    |                               |                                       |                             |                       |  |  
|Effects of cash flow hedges included |                             |                              
|in other comprehensive income        |                             |                              
|(net of tax expense of $349)         |                             |                               |                    |                               |                                       |                             |                       |  |  
|                                     |                             |                               |                    |                               |                                       |                             |                       |  |  
|Comprehensive income                 |                             |                               |                    |                               |                                       |                             |                       |  |  
|                                     |                             |                               |                    |                               |                                       |                             |                       |  |  
|Exercise of stock options            |                             |                               |                    | 388                           |                                       |                             | 4                     |  |  
|Tax benefit from exercise of         |                             |                              
|stock options                        |                             |                               |                    |                               |                                       |                             |                       |  |  
|                                     |                             |                               |                    |                               |                                       |                             |                       |  |  
|Balance at March 31, 2003            |                             |                               |                    | 60,433                        |                                       | $                           | 604                   |  | $
|                                     |                             |                               |                    |                               |                                       |                             |                       |  |  

The
accompanying notes are an integral part of these condensed consolidated financial
statements.

-6-

---

# ALARIS MEDICAL, INC.NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollars and share
amounts in thousands, except per share data)

---

# NOTE 1  BUSINESS
AND STATEMENT OF ACCOUNTING POLICY

# The Company:

ALARIS
Medical, Inc. (ALARIS Medical) was originally incorporated under the name
Advanced Medical Technologies, Inc. on September 28, 1988. ALARIS Medical is a
holding company for its operating subsidiary, ALARIS Medical Systems, Inc. (ALARIS
Medical Systems), which was formed by the merger of two pioneers in infusion
systems, IMED Corporation (then an ALARIS Medical subsidiary) and IVAC Medical Systems,
Inc., on November 26, 1996. ALARIS Medical and its subsidiaries are collectively referred
to as the Company or ALARIS.

# Statement of accounting
policy:

The
accompanying Condensed Consolidated Financial Statements have been prepared by the Company without audit pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or omitted
pursuant to those rules and regulations, although the Company believes that the
disclosures herein are adequate to make the information not misleading.

In
the opinion of the Company, the accompanying Condensed Consolidated Financial Statements contain all adjustments,
consisting of normal recurring adjustments, necessary for a fair statement of the
Companys financial position as of March 31, 2003, the results of its operations for
the three months ended March 31, 2003 and 2002, and its cash flows for the three months
ended March 31, 2003 and 2002.

# Use of estimates:

The
preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of revenues, costs, and expenses, assets, liabilities and related disclosure of
contingent amounts. While we believe our estimates and assumptions are reasonable, the
inherent nature of estimates is that actual results will likely be different from the
estimates made.

# Shipping and handling
costs:

Shipping
and handling costs for customer sales are classified as a selling and marketing expense.
Shipping and handling costs for customer sales, for the three months ended March 31, 2003
and 2002, were $1,940 and $1,873, respectively.

# Product warranties and
deferred service revenues:

Generally,
the Companys standard warranty for infusion instruments is a one or two year
warranty (based on the specific product) that covers both parts and labor. In some
instances, a customer may elect to have parts-only warranty coverage, which adds a year to
the coverage period and limits coverage to parts only. Patient monitoring products
generally have a 3 year parts and labor warranty. For patient monitoring products the
Company sells that are manufactured by a third party, the Company passes on to the
customer the warranty provided by the manufacturer. The Company provides for the estimated
cost of product warranties at the time revenue is recognized. Product warranties are recorded in other current and other non-current liabilities.

-7-

---

# NOTE 1  BUSINESS
AND STATEMENT OF ACCOUNTING POLICY (Continued)

The
Companys product warranty liability reflects managements best estimate of
probable liability under its product warranties. Management estimates the liability based
on the Companys stated warranty policies and practices, the historical frequency of
claims, and the cost to replace or repair its products under warranty.

The
Company also engages in the sale of professional and technical services for which revenue
is deferred and recognized upon completion of the service. Additionally, the Company sells
extended on-site service programs for which revenue is deferred and recognized over the
service period. Deferred service revenue is recorded in other non-current liabilities.

Changes in the liability for product warranty and deferred service revenue
associated with these service programs for the period ended March 31, 2003 was as follows
:

|                                                 | 
|------------------------------------------------ | 
|Product warranties:                              | 
|Balance at December 31, 2002                     | 
|Accruals for warranties issued during the period | 
|Settlements made during the period               | 
|                                                 | 
|Balance at March 31, 2003                        | 
|                                                 | 
|                                                 | 
|Deferred service revenue:                        | 
|Balance at December 31, 2002                     | 
|Amounts added to deferred revenue                | 
|Amounts recorded as revenue during the period    | 
|                                                 | 
|Balance at March 31, 2003                        | 
|                                                 | 

# Net income per common
share:

Basic
and diluted net income per common share has been computed in accordance with Statement of
Financial Accounting Standards No. 128, Earnings Per Share (FAS
128), using the weighted-average number of shares of common stock outstanding and
common stock equivalents during the period.

Weighted  average common shares used in the  calculation  of diluted  earnings per share for the quarter ended March 31, 2003 and 2002,
includes  common stock  equivalents of 4,004 and 1,407,  respectively.  For the three months ended March 31, 2003 and 2002,  options to
purchase 5 and 2,610 shares of common stock,  respectively,  were excluded from the calculation of common stock equivalents because the
options have an exercise price greater than or equal to the average market value of ALARIS Medical's common stock during the period.

# Stock-based compensation:

The
Company measures compensation expense for ALARIS Medicals stock-based employee
compensation plans using the intrinsic value method and provides pro forma disclosures of
net income  as if the fair value-based method had been applied in measuring
compensation expense.

-8-

---

# NOTE 1  BUSINESS
AND STATEMENT OF ACCOUNTING POLICY (Continued)

At
March 31, 2003, ALARIS Medical had several stock-based compensation plans from which
incentive stock options may be granted to key employees of the Company and non-qualified
stock options may be granted to key employees, directors, officers, independent
contractors, and consultants. The Company accounts for options issued to employees,
directors and officers under those plans under the recognition and measurement principles
of APB Opinion No. 25, Accounting for Stock Issued to Employees, and Related
Interpretations. Generally, no stock-based employee compensation cost is
reflected in net income, as all options granted under those plans have an exercise price
equal to the market value of the underlying common stock on the date of grant. Stock
options issued to independent contractors and consultants under those plans are accounted
for using a fair value method and are re-measured to fair value at each period end until
the earlier of the date that performance by the counter party is complete or a performance
commitment has been reached.

The
following table illustrates the effect on net income and earnings per share if the Company
had applied the fair value recognition provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation, to stock-based employee
compensation, assuming such standard had been adopted January 1, 1995.

|                                                 | Three Months Ended March 31, |  
|------------------------------------------------ | ---------------------------- | -
|
|
|Net income, as reported                          |                              | $
|                                                 |                              |  
|Deduct:  Total stock-based employee compensation |                              |  
|expense determined under fair value based method |                              |  
|for all awards, net of related tax effects       |                              |  
|                                                 |                              |  
|Pro forma net income                             |                              | $
|                                                 |                              |  
|Earnings per share:                              |                              |  
|Net income per common share, basic               |                              | $
|                                                 |                              |  
|                                                 |                              |  
|Net income per common share, diluted             |                              | $
|                                                 |                              |  
|                                                 |                              |  
|Net income per common share, pro forma basic     |                              | $
|                                                 |                              |  
|                                                 |                              |  
|Net income per common share, pro forma diluted   |                              | $
|                                                 |                              |  

These
pro forma  amounts may not be  representative  of future costs since the  estimated  fair value of stock  options is amortized to
expense  over the  vesting  period and  additional  options  may be  granted in future  years.  The fair  value for these  options  was
estimated at the date of grant using the  Black-Scholes  option pricing model with the following  weighted average  assumptions for the
three months ended March 31, 2003 and 2002, respectivelydividend  yields of 0%, expected  volatility of 50% and 75%, risk free
interest rates of 3.4% and 3.4%, and expected lives of 7 years.

The
Black-Scholes option valuation model was developed for use in estimating the fair value of
traded options which have no vesting restrictions and are fully transferable. In addition,
option valuation models require the input of highly subjective assumptions including the
expected stock price volatility. Because ALARIS Medicals employee stock options have
characteristics significantly different from those of traded options, and because changes
in subjective input assumptions can materially affect the fair value estimates, in
managements opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock based compensation plans. To comply
with disclosure requirements, the Company has valued its options using the Black-Scholes
option valuation model but plans to assess other valuation models and assumptions that may
more accurately reflect the value of these stock options.

-9-

---

# NOTE 2  GOODWILL
AND OTHER INTANGIBLE ASSETS

Acquired other intangible assets were
as follows:

|                                           | March 31, 2003 | December 31, 2002 |   |        
|------------------------------------------ | -------------- | ----------------- | - | -------
|
|
|Patents                                    |                |                   | $ | 29,021 
|                                           |                |                   |   |        
|Distribution rights and license agreements |                |                   |   | 8,462  
|                                           |                |                   |   |        
|Subtotal other intangible assets, net      |                |                  
|(subject to amortization)                  |                |                   |   | 37,483 
|                                           |                |                   |   |        
|Acquired other intangible assets           |                |                  
|(not subject to amortization):             |                |                  
|IVAC trade name                            |                |                   |   | 74,750 
|                                           |                |                   |   |        
|Other intangible assets, net               |                |                   | $ | 112,233
|                                           |                |                   |   |        

For
the three months ended March 31, 2003 and 2002, amortization expense for other intangible
assets, net was $551 and $589, respectively. The estimated future annual amortization
expense for other intangible assets, net is as follows:

|            |  
|----------- | -
|Fiscal Year |  
|2003 (A)    | $
|2004        |  
|2005        |  
|2006        |  
|2007        |  

(A)    
          Amount represents remaining estimated amortization expense for 2003.

# NOTE 3  INVENTORIES

Inventories comprise the following:

|                | March 31, | December 31,
|--------------- | --------- | ------------
|
|Raw materials   |           |             
|Work-in-process |           |             
|Finished goods  |           |             
|                |           |             
|                |           |             
|                |           |             
|                |           |             

-10-

---

# NOTE 4  LONG-TERM
DEBT

# Senior secured notes:

In April 2003,
 ALARIS  Medical  Systems  repurchased  $2,500  principal  amount of its 11-5/8%  Senior Secured Notes due 2006 (Senior
Secured  Notes),  at a total cost of $2,925 or 117% of principal amount.  Such premium,  along with a write-off of unamortized debt issuance
costs  related to the  purchased  amount of debt will be recorded as a charge of $503  (approximately  $300 after tax) in the  Companys
second quarter operating results.

# Senior discount notes:

In
July 1998, ALARIS Medical completed the sale of $109,892 of 11-1/8% Senior Discount Notes
due 2008 (Senior Discount Notes), receiving net proceeds of $106,321.

Due to the $25,000
 debt repurchase in the first quarter of 2003 described below, the Senior Discount Notes
 accrete to $164,000  principal  amount on August 1, 2003. Prior thereto,  interest  accruing on the
Senior  Discount Notes is added to the  outstanding  principal  balance  through July 31, 2003.  Interest on the Senior Discount Notes
accruing  subsequent to July 31, 2003 is payable in cash  semi-annually in arrears on February 1 and August 1, commencing  February 1,
2004.  The indentures governing the Senior Secured Notes and the 9-3/4% Senior Subordinated Notes due 2006 (Senior  Subordinated  Notes),
 permit ALARIS Medical Systems to make distributions,  or restricted  payments, to ALARIS Medical if at the time of the restricted payment,
 ALARIS Medical Systems satisfies the two  conditions  described in the following  paragraphs.  Additionally,  payments to ALARIS Medical to
fund up to $1,500 annually in ALARIS  Medical  operating or capital  expenditures  are defined as restricted  payments but do not require  meeting these
conditions.  Based on its  operating  results for the year ended  December  31,  2002,  ALARIS  Medical Systems met the two  required
conditions to make  restricted  payments for the first time in the first quarter of 2003.  Additionally,  ALARIS  Medical  Systems met
the two required conditions as of March 31, 2003 which  permitted additional restricted payments in the second quarter of 2003.

The first  condition
 which must be satisfied  prior to making a  restricted  payment is that at the time of the  distribution,  ALARIS
Medical  Systems must have a Fixed Charge  Coverage  Ratio (as calculated in accordance  with the indentures as described  below) of at
least 2.5 to 1 calculated for the four complete calendar  quarters  preceding the distribution as though the distribution had been made
at the beginning of such period.  The Fixed Charge Coverage Ratio is determined by dividing ALARIS Medical  Systems  Consolidated
EBITDA (as  defined in the  indentures)  by its  Consolidated  Interest  Expense (as  defined in the  indentures).  Based on the ALARIS
Medical Systems  interest  expense for the twelve months ended March 31, 2003, the actual amount of interest  expense to be included in
the calculation of the Fixed Charge Coverage Ratio was approximately  $38,700.  As a result, the minimum required  Consolidated  EBITDA
to meet the ratio for the twelve  months  ended March 31,  2003, was  approximately  $96,800  while the actual  Consolidated  EBITDA was
approximately  $105,100.  Assuming no future changes to the amount or terms of  outstanding  debt of ALARIS Medical  Systems at March 31, 2003,
approximately  $96,800  represents the minimum required  Consolidated  EBITDA for future four quarter  calculations of the Fixed Charge
Coverage Ratio.

-11-

---

# NOTE 4  LONG-TERM
DEBT (Continued)

Under
the indentures, Consolidated EBITDA is defined as follows: With respect to any
Person for any period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period, plus, to the extent deducted in computing Consolidated Net
Income: (i) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period; (ii) Consolidated Interest Expense of such Person
for such period; and (iii) depreciation and amortization (including amortization of
goodwill and other intangibles) and all other non-cash charges (excluding any such
non-cash charge to the extent that it represents an accrual of or reserve for cash charges
in any future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Restricted Subsidiaries for such period; and (iv) any
extraordinary or non-recurring loss and any net loss realized in connection with either an
Asset Sale or the extinguishment of indebtedness, in each case, on a consolidated basis
determined in accordance with GAAP. Notwithstanding the foregoing, the provision for taxes
based on the income or profits of, and the depreciation and amortization and other
non-cash charges of, a Restricted Subsidiary of a Person shall be added to Consolidated
Net Income to compute Consolidated EBITDA only to the extent (and in the same proportion)
that the Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.

The
second condition which must be satisfied prior to making a restricted payment is that the
distribution, together with certain other restricted payments, may not exceed a sum
determined by reference to ALARIS Medical Systems cumulative Consolidated Net Income
(as defined in the indentures) for the period since January 1, 1997 and cash capital
contributions received after such date, less restricted payments made. This condition
provides that the Consolidated Net Income of ALARIS Medical Systems will be added to the
amount available each quarter until such time as historical net losses (of $17,312 through
March 31, 2003) are exhausted. Subsequent to such time, 50% of future ALARIS Medical
Systems net income will be added to the amount available.

For the year ended December 31, 2002, ALARIS Medical Systems met the
requirements under the indentures to make a restricted payment in the first quarter
of 2003. As a result, in February 2003, ALARIS Medical Systems made distributions to
ALARIS Medical in the amount of $30,800. ALARIS Medical used a portion of such
distributions to repurchase in a private transaction $25,000 principal amount of Senior
Discount Notes at a total cost of $25,000, representing a premium of $1,171 or 4.7% over
the then accreted carrying value. Such premium, along with a write-off of unamortized debt
issuance  costs related to the purchased amount of debt, was recorded as a charge of $1,545
(approximately $900 after tax) in the Companys first quarter 2003 operating results.
At March 31, 2003, the amount available for future restricted payments was $6,321. In April 2003, ALARIS Medical Systems made a
restricted payment to ALARIS Medical in the amount of $6,300.

-12-

---

# NOTE 5 
RESTRUCTURING AND OTHER NON-RECURRING ITEMS

During
the first quarter of 2002, the Company recorded a non-recurring benefit of $1,125 for an
insurance settlement. The settlement related to damages and losses incurred at one of the Company's
disposable products manufacturing plants in Mexico in 1993 as a result of flooding. The
contingency related to the insurance settlement was resolved in the first quarter of 2002,
when the Company received proceeds of $1,000 during the first quarter and notification of an
additional payment due of $125, which was received during April 2002.

Also
during the first quarter of 2002, the Company initiated a plan to restructure its
technical services operations in Central Europe. In this connection, the Company recorded
a charge of $540 which included $400 for severance costs for 21 positions affected by the
relocation of the German operation and $140 related to lease termination. As of March 31,
2003, all severance payments have been made to the identified employees and $11 in lease
payments have been made.

# NOTE 6  SEGMENT
INFORMATION

The
Companys segment performance is based on results of two geographical business
segments within the same line of businessNorth America and International.

The
Company is organized primarily based on geographic location with the United States and
Canada drug infusion and patient monitoring business, and Mexico manufacturing activities,
representing the North America segment. All other international operations, including
Europe, Asia, Australia, and Latin America, represent the International segment.

The
accounting policies of the segments are the same as those described in the Consolidated
Financial Statements included in the Companys Annual Report on Form 10-K for the
year ended December 31, 2002. The geographical data does not include intersegment
revenues. All expenses associated with corporate headquarters appear in the North America
segment. The Company evaluates the performance of its segments based on sales and operating
income.

The table below presents information
about reported segments for the three months ended March 31:

|                       | North
America | International | Total
|---------------------- | ------------- | ------------- | -----
|
|2003                   |               |               |      
|Sales                  |               |               | $    
|Income from operations |               |               |      
|2002                   |               |               |      
|Sales                  |               |               | $    
|Income from operations |               |               |      

-13-

---

# NOTE 7  CASH FLOW
INFORMATION

During
the quarters ended March 31, 2003 and 2002, Federal, state and foreign income taxes paid, net of tax refunds, totaled $679 and
$558, respectively.  No interest was paid during the quarter ended March 31, 2003, and interest paid in the quarter ended March 31,
2002 totaled $579.

# NOTE 8 
CONTINGENCIES AND LITIGATION

# Litigation:

On
December 5, 2000, the Company filed a lawsuit in the United States District Court for
the Southern District of California against Filtertek, Inc., seeking a declaration that
the Companys own needle-free system does not infringe a Filtertek patent relating to
a Filtertek needle-free device as well as seeking unspecified damages and equitable relief
from Filtertek, for infringement of a patent relating to a needle-free system licensed to
the Company on an exclusive basis by Medex, Inc. On March 9, 2001, Filtertek filed a
lawsuit in the United States District Court for
the Northern District of Illinois seeking unspecified damages and equitable relief from
the Company claiming that the Companys needle-free system infringes the Filtertek
patent as well as seeking a declaration, against Medex only, that Filterteks
needle-free device does not infringe the needle-free system patent licensed to the Company
by Medex. The Company subsequently withdrew its claim for damages and equitable relief
relating to the Medex patent. As a result of motions made by the parties, the California
action was transferred to the Illinois court. The Court-appointed Special Master conducted
a claims construction hearing and provided the Court with recommendations on how the
single claim of the Filtertek patent at issue should be construed, which the Court has
since adopted.

The
Company believes that it has meritorious defenses to all of Filterteks claims and it
intends to defend itself vigorously. The Company has offered to submit to mediation or
arbitration to expedite the resolution of this case, but the parties have not reached
agreement to do so. On November 15, 2002, the Company moved for a summary adjudication of
the claims. If that does not resolve all claims, the Company will press for a prompt trial
of the remaining claims. There can be no assurance that the Companys defenses will defeat all of Filterteks
claims and the failure to do so could have a material adverse effect on the Companys
business, financial condition, results of operations or cash flows.

The
Company is also a defendant in various actions, claims and legal proceedings arising from
its normal business operations. Management believes the Company has meritorious defenses
to these cases and intends to defend itself vigorously. As the ultimate outcome of these
matters is uncertain, no contingent liabilities or provisions have been recorded in the
accompanying financial statements for such matters. However, in managements opinion,
based on discussions with legal counsel, liabilities arising from such matters, if any,
will not have a material adverse effect on the business, financial condition, results of
operations or cash flows.

-14-

---

# NOTE 8 
CONTINGENCIES AND LITIGATION (Continued)

# Other Matters:

During
the years 1988 through 1995, Cal Pacifico acted as the Companys United States
customs broker and importer of record with respect to the importation into the United
States of finished products assembled at the Companys two maquiladora assembly
plants in Tijuana, Mexico. Cal Pacifico received a pre-penalty notice of intent from the
United States Customs Service (Customs) to assess additional duties and
penalties against Cal Pacifico for its alleged failure to comply with certain documentary
requirements regarding the importation of goods on behalf of its clients, including the
Company. The Company believes that it is unlikely that Customs will assess any portion of
the disputed amounts against the Company. Customs has not initiated any proceedings
against the Company in respect of such matters. Nonetheless, Cal Pacifico advised the
Company that it may seek recovery from the Company, through arbitration, for any portion
of the disputed amounts which it is required to pay to Customs. The ultimate  outcome of such  proceeding  cannot be predicted,
nor is the Company able to estimate the possible loss  resulting  from
such proceeding, should one occur. The Company believes that it has
meritorious defenses to claims Cal Pacifico might raise against the Company. Although
management does not believe it is probable that the Cal Pacifico dispute will result in a
material claim against the Company, it will continue to monitor the matter.

-15-

---

# PART I  ITEM 2

# MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

---

# FORWARD-LOOKING
STATEMENTS

Certain
of the matters discussed in this report, including, without limitation, matters discussed
under Item 2, Managements Discussion and Analysis of Financial Condition and
Results of Operations, may constitute forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended. Certain of these
forward-looking statements can be identified by the use of forward-looking terminology
such as believes, expects, may, will,
should, seeks, approximately, intends,
plans, estimates, or anticipates or the negative of
these terms or other comparable terminology, or by discussions of strategy, plans or
intentions. Statements contained in this report that are not historical facts are
forward-looking statements. Without limiting the generality of the preceding statement,
all statements in this report concerning or relating to estimated and projected earnings,
margins, costs, expenditures, cash flows, growth rates and financial results are
forward-looking statements. In addition, through our senior management, from time to time
we make forward-looking statements concerning our expected future operations and
performance and other developments. Such forward-looking statements are necessarily
estimates reflecting our best judgment based upon current information and involve a number
of risks and uncertainties. Other factors may affect the accuracy of these forward-looking
statements and our actual results may differ materially from the results anticipated in
these forward-looking statements. While it is impossible to identify all such factors,
factors that could cause actual results to differ materially from those estimated by us
include, but are not limited to, those factors or conditions described under this Item 2,
Managements Discussion and Analysis of Financial Condition and Results of
Operations in this report and under Item 7, Managements Discussion and
Analysis of Financial Condition and Results of Operations  Critical Accounting
Policies and Estimates and Factors That Could Affect Future Financial
Condition and Results in our Annual Report on Form 10-K for the year ended December
31, 2002, and general conditions in the economy and capital markets.

# Overview:

We develop and provide
 practical solutions for medication safety.  We design, manufacture and
 market intravenous (IV)medication delivery and infusion therapy devices, needle-free disposables and related monitoring equipment in
 the United States and internationally.  Our proprietary Guardrails Safety Software, our other smart technologies and our smart services
help to reduce the risks and costs of medication errors, help to safeguard patients and clinicians and  also gather and record clinical information
for review, analysis and transcription.  Our intravenous infusion systems are used to deliver to patients one or more fluids,
primarily pharmaceuticals or nutritionals, and consist of medication safety systems, single and multi-channel large volume infusion
pumps, syringe pumps and dedicated and non-dedicated disposable administration sets.

We have one of the largest  installed  bases of large volume pump delivery lines in the United
States  hospital  market,  representing  approximately  32% of such  installed  lines.  We also  believe that we have the number one or
number two market position in the large volume pump segment or the syringe pump segment, or both segments,  in Belgium,  France, Italy,
The Netherlands,  Norway,  Spain, Sweden, the United Kingdom,  Australia,  Canada, New Zealand and South Africa. In addition,  we are a
leading provider of patient monitoring  products that measure and monitor  temperature,  with a substantial  installed base of hospital
thermometry  systems in the United  States.  We also provide  products  which  measure and monitor  pulse,  pulse  oximetry,  and blood
pressure.  We sell our products  primarily to the hospital market through a worldwide  direct sales force of over 200  salespersons and
more than 100 distributors to over 5,000 hospitals in more than 120 countries worldwide.

-16-

---

ALARIS Medical is a
holding company for ALARIS Medical  Systems.  ALARIS Medical also identifies and evaluates  potential  acquisitions
and investments,  and performs various corporate functions.  As a holding company, ALARIS Medical currently has no revenues to fund its
operating and interest  expense and relies on its existing cash,  cash  generated  from stock option  exercises and cash generated from
operations of ALARIS Medical Systems to meet its obligations.

# Critical Accounting
Policies and Estimates:

Our
discussion and analysis of our operating results and financial condition is based upon our Condensed
Consolidated Financial Statements, which have been prepared in accordance with United
States generally accepted accounting principles.

Critical accounting policies are those that involve subjective or complex judgments, often
as a result of the need to make estimates. The following areas all require the use of
judgments and estimates: inventory valuation, allowances for uncollectible accounts
receivable and estimated rebates, cost of field corrective actions, deferred tax asset
valuation and carrying value of intangible assets. Estimates in each of these areas are
based on historical experience and various judgments and assumptions that we believe are
appropriate. However, the inherent nature of estimates is that actual results will likely be different from these estimates.
 Our accounting practices are discussed in more detail in Managements Discussion and Analysis of Financial
Condition and Results of Operations and note 2 to our Consolidated Financial
Statements contained in our Annual Report on Form 10-K for the year ended December 31,
2002.

# Results of Operations:

The
following table sets forth, for the periods indicated, selected financial information
expressed as a percentage of sales:

|                                               | Three Months Ended March 31, | 
|---------------------------------------------- | ---------------------------- | 
|
|
|Sales                                          |                              | 
|                                               |                              | 
|Cost of sales                                  |                              | 
|                                               |                              | 
|Gross margin                                   |                              | 
|Selling and marketing expenses                 |                              | 
|General and administrative expenses            |                              | 
|Research and development expenses              |                              | 
|Restructuring and other non-recurring items    |                              | 
|Interest income from sales-type capital leases |                              | 
|                                               |                              | 
|Income from operations                         |                              | 
|Interest expense, net                          |                              | 
|Repurchase of debt                             |                              | 
|Other, net                                     |                              | 
|                                               |                              | 
|Income before income taxes                     |                              | 
|Provision for  income taxes                    |                              | 
|                                               |                              | 
|Net income                                     |                              | 
|                                               |                              | 

-17-

---

Our
sales results are reported consistent with our two geographical segments: North
America and International. The following table summarizes sales to customers by each segment.

|                              | Three Months Ended March 31, | 
|----------------------------- | ---------------------------- | 
|
|
|North America                 |                              | 
|Infusion Instruments          |                              | 
|                              |                              | 
|                              |                              | 
|Dedicated Disposables         |                              | 
|Other Disposables and Service |                              | 
|                              |                              | 
|Subtotal                      |                              | 
|                              |                              | 
|Patient Monitoring            |                              | 
|North America Total           |                              | 
|                              |                              | 
|International                 |                              | 
|Infusion Instruments          |                              | 
|Dedicated Disposables         |                              | 
|Other Disposables and Service |                              | 
|                              |                              | 
|Subtotal                      |                              | 
|                              |                              | 
|Patient Monitoring            |                              | 
|                              |                              | 
|International  Total          |                              | 
|                              |                              | 
|ALARIS Medical Total          |                              | 
|                              |                              | 

# Three Months Ended March
31, 2003 Compared with Three Months Ended March 31, 2002

Sales.
          For the three  months ended March 31, 2003,  sales were $121.2  million,  an increase of $16.8  million,  or 16%,  over the
same  period in the prior year.  If currency  exchange  rates for the first  quarter of 2003 had prevailed  during the first
quarter of 2002,  sales  would have been  $110.2  million for the first  quarter of 2002.  Thus, excluding  the effects of currency
changes, the increase in sales for the first quarter of 2003 was $11.0 million, or 10%, over the first quarter of 2002.

Higher  volumes of both drug  infusion  instruments  and  disposable  administration  sets were the primary factors leading to the
increase in North  America revenues of $10.6  million,  or 15%, over the prior year.  The increase in infusion  instruments  was largely due
to sales of our proprietary  Guardrails Safety Software,  primarily in the Medley  Medication Safety System.  The increase in
dedicated  disposables was due to an increase in our installed base of infusion  devices.  The increase in other  disposables
and service was due to approximately  $2.7 million in additional  sales of SmartSite  Needle-Free  systems.  The increases in
drug  infusion  products in North  America were  partially  offset by lower  volumes of patient  monitoring  instruments  and
disposables  compared with the prior year.  International  sales  increased  $6.2 million,  or 18%, due to higher volumes and
revenues of large volume pumps,  dedicated disposable  administration  sets, and SmartSite  Needle-Free systems compared with
the same period in the prior year.  Excluding the effects of currency changes,  International  sales for the first quarter of
2003 increased 1% over the first quarter of 2002.

Gross
Profit. Gross profit increased $11.5 million,  or 22%, for the quarter ended March 31, 2003,  compared with the same quarter last
year.  The gross margin  percentage  increased  to 52.1% for the first  quarter of 2003,  from 49.5% for the first  quarter of
2002.  Excluding  the effects of currency  changes,  gross profit for the first  quarter of 2003 would have  increased  $7.2
million  from the first  quarter  of 2002 and the gross  margin  percentage  for the first  quarter  of 2002  would have been
50.8%.  In both North America and  International,  the improved  margin  percentage was due to increased  volume of products
sold, an increased  percentage of software  products that carry a higher margin than equipment and disposables and generally  lower product costs resulting
from improved manufacturing efficiencies.

-18-

---

Selling
and Marketing Expenses.   Selling and marketing  expense  increased $2.8 million,  or 13%,  for the quarter ended March 31, 2003,
compared with the
same period in 2002,  primarily  due to increased  selling costs  associated with  higher sales volume in the first quarter of
2003 compared with the prior year and to higher sales and marketing  costs  related to increased  personnel,  consulting  and
related  activities  supporting the  continued deployment of our  medication  safety  strategy.  As a percentage of sales,  selling and
marketing  expenses  decreased  to 20.0% for the first  quarter of 2003 from 20.5% for the first  quarter of 2002.  Excluding
the effects of currency changes,  the increase in selling and marketing  expenses for the first quarter of 2003 would have
been $1.5 million, or 7%, compared with the first quarter of 2002.

General
and Administrative Expenses.  General and  administrative  expense increased $1.4 million, or 15%, for the quarter ended March 31, 2003,
 compared with
the same period in the prior year.  As a percentage of sales,  general and  administrative  expense  decreased to 9.2% for
the first  quarter  of 2003,  from 9.3% for the first  quarter  of 2002.  Excluding  the  effects of  currency  changes,  the
increase  in general  and  administrative  expenses  for the first  quarter of 2003 would have been $1.0  million,  or 9%,
compared with the first  quarter of 2002.  Increases in  administrative  expense were largely due to spending on our business
process  reengineering  project,  which  began in 2002.  This  project  is  designed  to  enable us to  achieve  efficiencies
throughout our  business and to design a new  enterprise-wide  information  system.  The current year first
quarter also included higher  depreciation,  legal and other  professional  services,  and insurance expense over the prior year first
quarter.

Research
and Development Expenses.Research and development  expense  increased  approximately  $2.6 million,  or 42%, for the quarter ended March 31, 2003,  compared
with the same period in the prior year. The increase was due to spending  associated with new product  development  primarily  related
to our  medication  safety  strategy and increased  spending on new products for the  international  market.  This higher  spending
included  increased  salaries,  benefits,  and consulting fees.  Research and development  expense  increased to 7.3% of sales for the
first quarter of 2003, compared with 5.9% of sales for the first quarter of 2002.

Restructuring
and Other Non-recurring Items.   We recorded a non-recurring benefit of $1.1
million during the first quarter of 2002 for an insurance settlement. The settlement
related to damages and losses incurred at one of our disposable products manufacturing
plants in Mexico in 1993 as a result of flooding. The contingency related to the insurance
settlement was resolved in the first quarter of 2002, when we received proceeds of $1.0
million during the quarter and notification of an additional payment due of $.1 million,
which was received during April 2002.

During
the first quarter of 2002, we initiated a plan to restructure our Central European
technical services. In this connection, we recorded a charge of $.5 million which included
$.4 million for severance costs for 21 positions affected by the relocation of the German
operation and $.1 million related to lease termination. As of March 31, 2003, all
severance payments had been made to the identified employees.

Interest
Expense.  Interest  expense  increased $.1 million,  or 1%,  for the quarter ended March 31, 2003,  compared with the same period in
the prior year. The increase was due to increased  accretion on ALARIS  Medicals 11 1/8% Senior  Discount Notes (the Senior
Discount  Notes) which was partially  offset by a decrease in interest due to the repurchase in February 2003 of $25 million
of our Senior Discount Notes.

-19-

---

Interest
Income. Interest  income was constant  during the quarter  ended March 31, 2003,  compared  with the same quarter in 2002.  While the
average cash balance was higher than the same period in 2002,  the yield earned on such cash was lower due to lower  interest
rates.

Repurchase of debt.The Company  incurred a pretax charge of $1.5 million  during the quarter ended March 31, 2003 due to the  repurchase of $25 million of
the Senior Discount Notes at a premium and the write-off of related unamortized debt issuance costs.

Other,
net.Other, net  increased  $.7 million  for the quarter  ended March 31,  2003,  compared  with the same
 quarter in the prior year due to an
increase in gains on foreign currency transactions of $.5 million over the same quarter in the prior year.

# Liquidity and Capital
Resources

We
expect to continue to meet our short-term liquidity needs, including capital expenditure
requirements, with cash flow from operations of ALARIS Medical Systems and cash on hand.
We will continue to use our funds primarily for operating expenses, including planned
expenditures for new research and development programs, capital expenditures and scheduled
interest payments on outstanding indebtedness. Additionally, we anticipate using a portion
of these funds to purchase some of our long-term debt from time to time in open market or
privately negotiated transactions or otherwise to the extent that the indentures governing such
indebtedness permit us to do so.

At
March 31, 2003, we had $508.2 million combined outstanding indebtedness composed of
obligations of ALARIS Medical and ALARIS Medical Systems. ALARIS Medicals
indebtedness consisted of $158.2 million of 11-1/8% Senior Discount Notes. ALARIS Medical Systems indebtedness consisted
of $170.0 million of 11-5/8% Senior Secured Notes which were issued on October 16, 2001 and $180.0 million of 9-3/4% Senior
Subordinated Notes due 2006 (Senior Subordinated Notes). The Senior Secured
Notes bear interest at 11-5/8%, payable semi-annually in arrears on June 1 and December 1,
with all principal due at maturity on December 1, 2006. The Senior Subordinated Notes bear
interest at 9-3/4%, payable semi-annually in arrears on June 1 and December 1, with all
principal due at maturity on December 1, 2006.

Due to the $25 million debt repurchase in the first quarter of 2003, the Senior  Discount Notes accrete to $164.0  million  principal  amount on August 1, 2003.  Prior  thereto,  interest  accruing on the
Senior  Discount Notes is added to the  outstanding  principal  balance  through July 31, 2003.  Interest on the Senior  Discount Notes
accruing  subsequent to July 31, 2003 is payable in cash  semi-annually  in arrears on February 1 and August 1, commencing  February 1,
2004.  The  indentures  governing the Senior  Secured Notes and the Senior  Subordinated  Notes permit ALARIS  Medical  Systems to make
distributions,  or restricted payments, to ALARIS Medical if at the time of the restricted payment,  ALARIS Medical Systems satisfies
the two  conditions  described  in the  following  paragraphs.  Additionally,  payments  to ALARIS  Medical to fund up to $1.5  million
annually in ALARIS  Medical  operating or capital  expenditures  are defined as  restricted  payments but do not require  meeting these
conditions.  Based on its  operating  results for the year ended  December  31,  2002,  ALARIS  Medical  Systems  met the two  required
conditions to make restricted  payments for the first time in the first quarter of 2003.  Additionally,  ALARIS Medical Systems met the
two required  conditions as of March 31, 2003, which  permitted ALARIS Medical  Systems to make additional  restricted  payments in the
second quarter of 2003.

The first  condition  which must be satisfied  prior to making a restricted  payment is that at the time of the  distribution,
ALARIS Medical  Systems must have a Fixed Charge  Coverage Ratio (as calculated in accordance  with the indentures as described  below)
of at least 2.5 to 1 calculated for the four complete  calendar  quarters  preceding the  distribution as though the  distribution  had
been made at the  beginning  of such period.  The Fixed  Charge  Coverage  Ratio is  determined  by dividing  ALARIS  Medical  Systems
Consolidated  EBITDA (as defined in the  indentures) by its  Consolidated  Interest  Expense (as defined in the  indentures).  Based on
ALARIS Medical  Systems  interest  expense for the twelve months ended March 31, 2003, the actual amount of interest  expense included
in the  calculation  of the  Fixed  Charge  Coverage  Ratio  was  approximately  $38.7  million.  As a  result,  the  minimum  required
Consolidated  EBITDA to meet the ratio for the twelve  months ended March 31, 2003, was  approximately  $96.8  million  while the actual
Consolidated  EBITDA was  approximately  $105.1  million.  Assuming no future  changes to the amount or terms of outstanding
debt of ALARIS Medical  Systems at March 31, 2003,  approximately  $96.8 million  represents  the minimum  required  Consolidated  EBITDA for future four
quarter calculations of the Fixed Charge Coverage Ratio.

-20-

---

Under
the indentures, Consolidated EBITDA is defined as follows: With respect to any
Person for any period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period, plus, to the extent deducted in computing Consolidated Net
Income: (i) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period; (ii) Consolidated Interest Expense of such Person
for such period; and (iii) depreciation and amortization (including amortization of
goodwill and other intangibles) and all other non-cash charges (excluding any such
non-cash charge to the extent that it represents an accrual of or reserve for cash charges
in any future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Restricted Subsidiaries for such period; and (iv) any
extraordinary or non-recurring loss and any net loss realized in connection with either an
Asset Sale or the extinguishment of indebtedness, in each case, on a consolidated basis
determined in accordance with GAAP. Notwithstanding the foregoing, the provision for taxes
based on the income or profits of, and the depreciation and amortization and other
non-cash charges of, a Restricted Subsidiary of a Person shall be added to Consolidated
Net Income to compute Consolidated EBITDA only to the extent (and in the same proportion)
that the Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.

Consolidated
EBITDA, per the indentures, as calculated for the twelve months ended March 31, 2003, reconciled
to ALARIS Medical Systems Consolidated Net Income was as follows:

|                                                             | Twelve Months Ended
March 31, 2002
|------------------------------------------------------------ | ----------------------------------
|
|
|ALARIS Medical Systems' Consolidated Net Income, as reported |                                   
|Provision for income taxes                                   |                                   
|Interest expense                                             |                                   
|Depreciation and amortization                                |                                   
|Non-cash items                                               |                                   
|Extraordinary/non-recurring items                            |                                   
|                                                             |                                   
|Consolidated EBITDA, per indentures                          |                                   
|                                                             |                                   
|                                                             |                                   

The
second condition which must be satisfied prior to making a restricted payment is that the
distribution, together with certain other restricted payments previously made, may not
exceed a sum determined by reference to ALARIS Medical Systems cumulative
Consolidated Net Income (as defined in the indentures) for the period since January 1,
1997 and cash capital contributions received after such date, less restricted payments
made. This condition provides that the Consolidated Net Income of ALARIS Medical Systems
will be added to the amount available each quarter until such time as historical net
losses (of $17.3 million through March 31, 2003) are exhausted. Subsequent to such time,
50% of future ALARIS Medical Systems net income will be added to the amount
available. At March 31, 2003, the amount available for future restricted payments was $6.3
million.

-21-

---

The
following represents the changes in the amount available for Restricted Payments pursuant
to the ALARIS Medical Systems indentures:

|                                              | 1997 through
2001 | Full Year
2002 | First Quarter
2003
|--------------------------------------------- | ----------------- | -------------- | ------------------
|
|
|Available for Restricted Payments - beginning |                   |                |                   
|of period                                     |                   |                |                   
|                                              |                   |                |                   
|ALARIS Medical Systems' net (loss) / income   |                   |               
|for the period (1)                            |                   |                |                   
|                                              |                   |               
|Restricted Payments (2)                       |                   |               
|Dividends to ALARIS Medical                   |                   |               
|for operating expenses                        |                   |                |                   
|Interest payment on Convertible Debentures    |                   |                |                   
|Due from ALARIS Medical, Inc.                 |                   |                |                   
|Fund unrestricted subsidiary to purchase      |                   |               
|Convertible Debentures                        |                   |                |                   
|                                              |                   |               
|Restricted payment paid by ALARIS             |                   |               
|Medical Systems                               |                   |                |                   
|Cash capital contributions received by        |                   |               
|ALARIS Medical Systems                        |                   |                |                   
|                                              |                   |                |                   
|                                              |                   |               
|Available for Restricted Payments -           |                   |               
|end of period                                 |                   |                | $                 
|                                              |                   |                |                   
|Change in Net Loss:                           |                   |               
|Cumulative net loss - beginning of period     |                   |                |                   
|ALARIS Medical Systems' net (loss) / income   |                   |               
|for the period                                |                   |                |                   
|                                              |                   |                |                   
|Cumulative net loss - end of period           |                   |                | $                 
|                                              |                   |                |                   

---

(1)       
          The amount of net income included in determining the amount available for
          restricted payments is based on the Net Income definition per the
          indentures and is different from the net income reported in accordance with
          generally accepted accounting principles.

(2)       
          The indentures allow certain restricted payments to be made without
          meeting the Fixed Charge Coverage Ratio.

The
preceding description of the provisions of the indentures which govern restricted
payments, including the defined terms, is a summary only and is qualified in its entirety
by the text of the indentures, which ALARIS Medical and ALARIS Medical Systems have
previously filed with the Securities and Exchange Commission.

For the year ended December 31, 2002, ALARIS Medical Systems met the
requirements under its debt agreements to make a restricted payment in the first quarter
of 2003. As a result, in February 2003, ALARIS Medical Systems made distributions to
ALARIS Medical in the amount of $30.8 million. ALARIS Medical used a portion of such
distributions to repurchase in a private transaction $25.0 million principal amount of the
Senior Discount Notes at a total cost of $25.0 million representing a premium of $1.2
million or 4.7% over the then accreted carrying value. Such premium, along with a
write-off of unamortized debt issue cost related to the purchased amount of debt, was
recorded as a charge of $1.5 million (approximately $.9 million after tax) in the
Companys first quarter 2003 operating results.

-22-

---

Due to the February
2003 Senior  Discount  Note  repurchase  and principal  reduction  discussed in the previous  paragraph,
semi-annual  interest payments on the Senior Discount Notes have been reduced from the originally  scheduled $10.5 million to
$9.1 million and ALARIS  Medicals  consolidated  projected  interest  expense for 2003 will be reduced by $2.3 million ($2.8
million on an annualized  basis).  After receiving  restricted  payments from ALARIS Medical Systems and after purchasing the
$25 million of Senior Discount Notes,  ALARIS Medical,  Inc., on a stand-alone  basis,  had a cash balance of $8.7 million as
of March 31, 2003.  Based on 2003 first quarter  results of  operations,  ALARIS  Medical  Systems met the required  tests to
make  additional  restricted  payments to ALARIS Medical in the second quarter of 2003. As a result,  ALARIS Medical  Systems
made a  restricted  payment to ALARIS  Medical in the amount of $6.3 million in April 2003.  Management  anticipates  ALARIS
Medical will have cash available  sufficient to meet the first scheduled  semi-annual interest payment, due February 1, 2004,
on the Senior Discount Notes.

In April 2003,  ALARIS Medical Systems  repurchased $2.5 million principal amount of the Senior Secured Notes at a total cost
of $2.9 million or 117% of principal  amount.  Such premium,  along with a write-off of  unamortized  debt issue cost related
to the  purchased  amount of debt will be recorded as a charge of $.5 million  (approximately  $.3 million  after tax) in our
second quarter operating results.

Although
there can be no assurances that ALARIS Medical Systems will meet the required tests to
make future restricted payments, based on projected ALARIS Medical Systems net
income and Consolidated EBITDA, we believe that ALARIS Medical Systems will continue to
meet the required Fixed Charge Coverage Ratio and, through its generation of net income,
increase the amount available for restricted payments in each successive calendar quarter.
As a result, management plans to continue to make quarterly restricted payments from
ALARIS Medical Systems to ALARIS Medical to the extent of the amount available to do so
under the indentures and subject to cash availability. Management currently plans to use
such payments from ALARIS Medical Systems either for interest payments on the Senior
Discount Notes or for periodic repurchases by ALARIS Medical of additional Senior Discount
Notes to the extent such Senior Discount Notes are available for sale at prices which
ALARIS Medical is willing to pay.

ALARIS
Medical Systems is required over the next twelve months (through March 31, 2004) to make
interest payments on the Senior Secured Notes in the amount of $19.8 million ($9.9 million
in June of 2003 and $9.9 million in December of 2003) and interest payments on the Senior
Subordinated Notes in the amount of $17.6 million ($8.8 million in June of 2003 and $8.8
million in December of 2003). ALARIS Medical is required over the next twelve months to
make an interest payment on the Senior Discount Notes of $9.1 million in February 2004.

Although
we have no further principal amortization requirements until the maturity of the Senior
Secured Notes and the Senior Subordinated Notes in December 2006, management is monitoring
the capital markets for opportunities to improve our capital structure prior to such time.

The
indenture governing the Senior Secured Notes permits ALARIS Medical Systems to use any
proceeds of an ALARIS Medical equity offering which are contributed to ALARIS Medical
Systems to redeem up to 35% in aggregate principal amount of Senior Secured Notes, prior
to December 1, 2003, at a redemption price equal to 111.625% of the principal amount
thereof plus accrued and unpaid interest. Proceeds of an equity offering which are
contributed to ALARIS Medical Systems would increase the amount available to ALARIS
Medical Systems (under the indentures governing both the Senior Secured Notes and the
Senior Subordinated Notes) to make restricted payments.  Any offering proceeds not
so contributed could be used by ALARIS Medical to purchase Senior Discount Notes.
Beginning August 1, 2003, the Senior Discount Notes are also callable at 105.563%, with
the call price decreasing each subsequent August 1.

-23-

---

We
anticipate that we will refinance our remaining debt structure prior to December 2006
since we believe that it is unlikely that ALARIS Medical Systems will generate sufficient
cash flow from operations to repay the remaining Senior Secured Notes and Senior
Subordinated Notes at maturity in 2006 and to permit it to make distributions to ALARIS
Medical to enable it to repay the remaining Senior Discount Notes at maturity in 2008.
Such refinancing may involve an offering of debt securities of ALARIS Medical Systems or
ALARIS Medical, or both, an offering of equity securities of ALARIS Medical to reduce the
level of indebtedness of ALARIS Medical Systems or ALARIS Medical, or both, or a
combination of any of the foregoing. The ability of ALARIS Medical Systems or ALARIS
Medical, or both, to obtain such debt or equity financing will be dependent upon many
factors, including overall financial market and economic conditions and our operating
performance and expectations at such time.

On April  17,  2003  ALARIS  Medical  filed a shelf  registration  statement  on Form S-3 with the  Securities  and  Exchange
Commission  (SEC).  The shelf  registration  statement  will allow the Company to issue common stock,  debt  securities,  and
other types of  securities  from time to time,  up to an aggregate  of $550  million.  If declared  effective by the SEC, the
shelf  registration  statement would enable the Company to raise funds from the offering of any individual  security  covered
by the registration statement,  as well as any combination of the securities,  subject to market conditions and the Companys
capital  needs.

As  disclosed  in the  registration  statement,  we expect  to use the net  proceeds  from the sale of the  securities  covered  by the
registration statement to reduce or refinance some or all of the outstanding  indebtedness of ALARIS Medical or ALARIS Medical Systems,
or both,  and for general  corporate  purposes.  ALARIS  Medical is seeking  approval from its  shareholders  at its annual  meeting of
shareholders  on April 30,  2003 to  increase by 10 million the number of shares of common  stock it is  authorized  to issue.  If such
additional  shares are  authorized,  ALARIS  Medical  currently  intends to seek to offer for sale some or all of these  additional  10
million  shares  under the  registration  statement.  Additionally,  in  connection  with a debt  refinancing  as  contemplated  by the
registration  statement,  we currently  expect to use a portion of our existing cash balances,  in order to decrease our total debt and
to seek to obtain a revolving  credit facility for increased  liquidity and operating  flexibility.  Our ability to effect any of these
transactions  will depend on many factors,  including overall  financial market and economic  conditions and our operating  performance
and expectations at such time.

Should
ALARIS Medical Systems not repay its indebtedness at maturity in 2006, should ALARIS
Medical not repay the Senior Discount Notes in 2008, or should ALARIS Medical Systems not
be able to continue to make distributions to ALARIS Medical in order to permit ALARIS
Medical to make cash interest payments on the Senior Discount Notes, these events could
have a material adverse effect on our business, financial condition and results of
operations and could result in a default by ALARIS Medical, ALARIS Medical Systems, or
both, and possible acceleration of all or a portion of such indebtedness, unless ALARIS
Medical, ALARIS Medical Systems, or both, could refinance such indebtedness or obtain the
required funds from other sources.

In
response to customer requests to finance their payments related to equipment purchases
over time, we work with an unrelated third party financing company to assist our
customers in such area. In recent years, $16 million to $30 million annually of drug
infusion equipment sales to North American customers have been financed by this third
party. If such third party financing source were no longer available to our customers, it
could require us to find another party or to finance such customer purchases and require
use of our cash. Additionally, our operating results could also be affected, as it is
possible that customers could look to make their purchases from our competitors who might
be able to finance such purchases at a lower cost of funds.

-24-

---

In
December 2002, the Company filed for a tax accounting change with the Internal Revenue
Service (IRS) seeking approval of a more favorable income tax treatment for
certain sales to third party distributors. The Company anticipates this tax accounting
change will be approved by the IRS, and, accordingly  reflected the benefit as a
reduction in its estimated current income tax liability for 2002. This change resulted in
an $8 million cash tax savings in 2002 with an anticipated refund for income taxes
previously paid in 2002 of an additional $4 million. This change does not impact the
amount of the income tax expense included in the Condensed Consolidated Statement of
Operations. Although management anticipates obtaining the requested approval from the IRS
during 2003, there can be no assurances that the IRS will approve the Companys
request. Should the tax treatment not be approved by the IRS, the Company would be
required to make tax payments, which it would have otherwise been able to defer
indefinitely, of approximately $12 million plus interest.

As
identified in the Condensed Consolidated Statement of Cash Flows, net cash provided by operating
activities for the three months ended March 31, 2003, was $38.5 million compared with $15.5
million provided by operating activities in 2002. Net cash used in investing activities
for the three months ended March 31, 2003 and 2002, was $7.1 million and $3.8 million,
respectively. Cash used in investing activities also includes $7.0 million and
$3.4 million in net capital expenditures for the three months ended March 31,
2003 and 2002, respectively. We anticipate making capital expenditures of approximately
$23 million in the remaining quarters in 2003. Net cash used in financing activities for
the three months ended March 31, 2003 and 2002, was $23.4 million and $15.1 million,
respectively, and was primarily composed of debt repurchases in 2003 and principal payments on long-term debt in 2002. During
the quarter ending March 31, 2003, federal, state and foreign taxes paid (net of refunds),
related to continuing operations were $.7 million.

The
following schedule summarizes our contractual obligations and commitments to make future
payments as of March 31, 2003:

|                                   | Contractual Obligations & Commitments |  |   |      
|---------------------------------- | ------------------------------------- |  | - | -----
|
|
|
|
|2003 (A)                           |                                       |  | $ | -    
|2004                               |                                       |  |   | -    
|2005                               |                                       |  |   | -    
|2006                               |                                       |  |   | 350.0
|2007                               |                                       |  |   | -    
|Thereafter                         |                                       |  |   | 164.0
|                                   |                                       |  |   |      
|Total Contractual Cash Obligations |                                       |  | $ | 514.0
|                                   |                                       |  |   |      
|                                   |                                       |  |   |      

(A)    
          Amount represents remaining contractual obligation during 2003.

# Backlog

The
amount of unfilled orders, believed to be firm, at March 31, 2003 and 2002, was $4.3
million and $8.4 million, respectively.

-25-

---

# Foreign Operations and Currency Exchange Rates

We have significant  foreign operations and, as a result,  are subject to various risks arising therefrom,  including foreign
currency  risks.  This risk did not  materially  change  during the first quarter of 2003.  For the quarters  ended March 31,
2003 and 2002,  approximately  37% and 35%,  respectively,  of our sales were  denominated in currencies  other than the U.S.
dollar. For the quarters ended March 31, 2003 and 2002,  approximately 32% and 31%,  respectively,  of our operating expenses
were denominated in currencies other than the U.S.  dollar.  These foreign  currencies are primarily those of Western Europe,
Canada,  Mexico, and Australia.  Additionally,  substantially all of the receivables and payables of our foreign subsidiaries
are denominated in currencies other than the U.S. dollar.

We address
certain financial  exposures  through a controlled  program of risk management that includes the use of derivative
financial  instruments.  At March 31,  2003,  we recorded a liability  in our  Condensed  Consolidated  Balance  Sheet of $.6
million for foreign  currency  forward  contracts.  As of December 31,  2002,  forward  contracts  valued at $.1 million were
recorded as a current asset in the Companys Consolidated Balance Sheet.

For the three months ended March 31, 2003 and 2002, we recognized net charges  related to the designated  cash flow hedges of
forecasted  foreign  currency  exchange  transactions in the amounts of $.3 million and $.1 million,  respectively,  in other
expense,  which  consisted  primarily of premium costs for currency  option  contacts.  At March 31, 2003,  $1.1 million ($.7
million after tax) was included in accumulated  other  comprehensive  income.  This  represents the remaining  option premium
costs net of the fair value of the open option  contracts that are  designated as cash flow hedges.  This loss is expected to
be charged to earnings during 2003 as the hedged transactions occur.

Due to changes in foreign  currency  exchange  rates during 2003 and 2002,  primarily a weakening of the U.S.  dollar against
many European  currencies,  we recognized foreign currency  transaction gains of $.2 million and losses of $.4 million during
2003 and 2002,  respectively.  Such gains and losses were  recorded  in other,  net in the losses of  Condensed  Consolidated
Statement of Operations.

# ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

# Foreign Exchange Risk
Management

As part of our risk
 management  strategy,  we put in place a hedging  program  beginning  in 2001 under  which we enter  into  forward
foreign  exchange and currency option  contracts to hedge a portion of forecasted cash receipts and payments  denominated in currencies
other than the U.S.  dollar.  We  categorize  these  instruments  as entered into for purposes  other than  trading.  We do not utilize
derivative  instruments  for trading or  speculative  purposes.  These  contracts are entered into to reduce the risk that our earnings
and cash flows,  resulting  from certain  forecasted  transactions,  will be affected by changes in foreign  currency  exchange  rates.
However,  we may be impacted by changes in foreign exchange rates related to the unhedged portion of the forecasted  transactions.  The
success of the hedging program depends,  in part, on forecasts of our transactions in various currencies  (primarily the Euro).  Hedges
are placed for  periods  consistent  with  identified  exposures,  but  generally  no longer than the end of the year for which we have
substantially  completed our annual business plan. We may experience  unanticipated  foreign  currency  exchange gains or losses to the
extent that there are timing  differences  between  forecasted  and actual  activity  during periods of currency  volatility.  However,
since the critical terms of contracts  designated as cash flow hedges are the same as the underlying  forecasted  transaction,  changes
in fair value of contracts  should be highly  effective in offsetting  the present value of changes in the expected cash flows from the
forecasted  transaction.  The ineffective  portion of any changes in the fair value of option contracts  designated as hedges,  if any,
is recognized  immediately in earnings.  We did not recognize  material gains or losses resulting from either hedge  ineffectiveness or
changes in forecasted transactions during the first quarter of 2003.

-26-

---

As a matter of policy,
 we will only enter into  currency  contracts  with  counterparties  that have at least an  investment  grade or
equivalent  credit rating from a major rating agency.  The  counterparties to these contracts are major financial  institutions.  We do
not have  significant  exposure to any one  counterparty.  We believe the risk of loss  related to  counterparty  default is remote and
would only consist of the net market value gain (if any) of the  underlying  instrument.  The contracts  have varying  maturities  with
none  exceeding  eighteen  months.  Costs  associated  with  entering  into  contracts are not expected to be material to our financial
results. ( See Item 2,
Managements Discussion and Analysis of Financial Condition and Results of
OperationsForeign Operations and Currency Exchange Rates.)

# ITEM 4. CONTROLS AND
PROCEDURES

Evaluation
of Disclosure Controls and Procedures

As
of March 31, 2003, an evaluation was 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 (as defined in the Securities Exchange
Act of 1934 Rule 13a-14). Based on that evaluation, the Companys
management, including the Chief Executive Officer and Chief Financial Officer, concluded
that the Companys disclosure controls and procedures were effective as of March 31,
2003, to ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Commissions rules and forms.

Changes in Internal
Controls

There
have been no significant changes (including corrective actions with regard to significant
deficiencies or material weaknesses) in our internal controls or in other factors that
could significantly affect internal controls subsequent to March 31, 2003.

-27-

---

# PART II

# OTHER INFORMATION

---

# ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)     
Exhibits

|     |                                                                                                                                                                                   |               
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------
|99.1 | Certification by David L. Schlotterbeck Pursuant to 18 U.S.C. Section 1350,
                as Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002. | Filed herewith
|     |                                                                                                                                                                                   |               
|99.2 | Certification by William C. Bopp Pursuant to 18 U.S.C. Section 1350,
                as Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.        | Filed herewith

(b)     
Report on Form 8-K

None.

-28-

---

SIGNATURES

Pursuant
to the requirements 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.

| |  | ALARIS
MEDICAL, INC.(Registrant)
| |  | --------------------------------

|Date:
  April 30, 2003 |  | BY: /s/  WILLIAM C. BOPPWilliam C. Bopp
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|---------------------- |  | -----------------------------------------------------------------------------------------------------------------------

|Date:
  April 30, 2003 |  | BY: /s/ ROBERT F. MATHEWSRobert F. Mathews
Vice President - Finance and Treasurer
(Principal Accounting Officer)
|---------------------- |  | ----------------------------------------------------------------------------------------------------------------

---

# CERTIFICATION BY DAVID
L. SCHLOTTERBECK PURSUANT TO SECURITIES EXCHANGE
ACT RULE 13a-14

I, David L. Schlotterbeck, certify
that:
          1. I have reviewed this quarterly report on Form 10-Q of ALARIS Medical, Inc.; 2.
          Based on my knowledge, this quarterly report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this quarterly report;
          3. Based on my knowledge, the financial statements, and other financial
          information included in this quarterly report, fairly present in all material
          respects the financial condition, results of operations and cash flows of the
          registrant as of, and for, the periods presented in this quarterly report; 4. The
          registrants other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a)
          designed such disclosure controls and procedures to ensure that material
          information relating to the registrant, including its consolidated subsidiaries,
          is made known to us by others within those entities, particularly during the
          period in which this quarterly report is being prepared; b) evaluated the
          effectiveness of the registrants disclosure controls and procedures as of
          a date within 90 days prior to the filing date of this quarterly report (the
          Evaluation Date); and c) presented in this quarterly report our
          conclusions about the effectiveness of the disclosure controls and procedures
          based on our evaluation as of the Evaluation Date; 5. The registrants
          other certifying officer and I have disclosed, based on our most recent
          evaluation, to the registrants auditors and the audit committee of
          registrants board of directors (or persons performing the equivalent
          function): a) all significant deficiencies in the design or operation of
          internal controls which could adversely affect the registrants ability to
          record, process, summarize and report financial data and have identified for the
          registrants auditors any material weaknesses in internal controls; and b)
          any fraud, whether or not material, that involves management or other employees
          who have a significant role in the registrants internal controls; and 6.
          The registrants other certifying officer and I have indicated in this
          quarterly report whether or not there were significant changes in internal controls
          or in other factors that could significantly affect internal controls subsequent
          to the date of our most recent evaluation, including any corrective actions with
          regard to significant deficiencies and material weaknesses.

|Date: April 30, 2003
/s/ DAVID L. SCHLOTTERBECK
David L. Schlotterbeck
 President and Chief Executive Officer |  | 
|------------------------------------------------------------------------------------------------------------- |  | 

---

# CERTIFICATION
BY WILLIAM C.
 BOPP PURSUANT TO
       SECURITIES EXCHANGE ACT RULE 13a-14

I, William C. Bopp, certify that:1.
          I have reviewed this quarterly report on Form 10-Q of ALARIS Medical, Inc.;2.
          Based on my knowledge, this quarterly report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this quarterly report;
          3. Based on my knowledge, the financial statements, and other financial
          information included in this quarterly report, fairly present in all material
          respects the financial condition, results of operations and cash flows of the
          registrant as of, and for, the periods presented in this quarterly report; 4. The
          registrants other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:a)
          designed such disclosure controls and procedures to ensure that material
          information relating to the registrant, including its consolidated subsidiaries,
          is made known to us by others within those entities, particularly during the
          period in which this quarterly report is being prepared; b) evaluated the
          effectiveness of the registrants disclosure controls and procedures as of
          a date within 90 days prior to the filing date of this quarterly report (the
          Evaluation Date); and c) presented in this quarterly report our
          conclusions about the effectiveness of the disclosure controls and procedures
          based on our evaluation as of the Evaluation Date; 5. The registrants
          other certifying officer and I have disclosed, based on our most recent
          evaluation, to the registrants auditors and the audit committee of
          registrants board of directors (or persons performing the equivalent
          function): a) all significant deficiencies in the design or operation of
          internal controls which could adversely affect the registrants ability to
          record, process, summarize and report financial data and have identified for the
          registrants auditors any material weaknesses in internal controls; and b)
          any fraud, whether or not material, that involves management or other employees
          who have a significant role in the registrants internal controls; and 6.
          The registrants other certifying officer and I have indicated in this
          quarterly report whether or not there were significant changes in internal controls
          or in other factors that could significantly affect internal controls subsequent
          to the date of our most recent evaluation, including any corrective actions with
          regard to significant deficiencies and material weaknesses.

|Date: April 30, 2003
/s/ WILLIAM C. BOPP
William C. Bopp

 Senior Vice President and Chief Financial Officer |  | 
|------------------------------------------------------------------------------------------------------------ |  |