##### 



Exhibit 99.1
 Cardiac
Science Announces Pro Forma Fourth Quarter Profit;
GAAP Loss due to Exceptional Charges
 BOTHELL, WA, February 23, 2006
   Fourth Quarter Results




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##### 



Cash Flow and Liquidity
   Outlook
        - 2 -




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##### 



Pro Forma Financial Information
       Conference Call / Webcast
   - 3 -




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##### 



About Cardiac Science Corporation
  ® ® ®
 Forward Looking Statements
  www.
 - 4 -




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##### 



Cardiac Science Corporation and Subsidiaries
Condensed Consolidated Statements of Operations (unaudited)
(in thousands, except share and per share amounts)
 Three Months Ended December 31,
    
    
    Twelve Months Ended December 31,2004
    
    
    2005
    
    
    2004
    
    
    2005$
    
    
    %
    
    
    $
    
    
    %
    
    
    $
    
    
    %
    
    
    $
    
    
    %Revenues:Products
    
    $
    20,871
    
    
    
    87.7
    %
    
    $
    31,827
    
    
    
    88.6
    %
    
    $
    77,373
    
    
    
    86.4
    %
    
    $
    93,460
    
    
    
    87.6
    %Service
    
    
    2,934
    
    
    
    12.3
    %
    
    
    4,079
    
    
    
    11.4
    %
    
    
    12,230
    
    
    
    13.6
    %
    
    
    13,190
    
    
    
    12.4
    %Total revenues
    
    
    23,805
    
    
    
    100.0
    %
    
    
    35,906
    
    
    
    100.0
    %
    
    
    89,603
    
    
    
    100.0
    %
    
    
    106,650
    
    
    
    100.0
    %Cost of Revenues:Products
    
    
    11,196
    
    
    
    53.6
    %
    
    
    18,286
    
    
    
    57.5
    %
    
    
    42,862
    
    
    
    55.4
    %
    
    
    51,195
    
    
    
    54.8
    %Service
    
    
    1,884
    
    
    
    64.2
    %
    
    
    2,683
    
    
    
    65.8
    %
    
    
    7,440
    
    
    
    60.8
    %
    
    
    8,599
    
    
    
    65.2
    %Total cost of revenues
    
    
    13,080
    
    
    
    54.9
    %
    
    
    20,969
    
    
    
    58.4
    %
    
    
    50,302
    
    
    
    56.1
    %
    
    
    59,794
    
    
    
    56.1
    %Gross Profit:Products
    
    
    9,675
    
    
    
    46.4
    %
    
    
    13,541
    
    
    
    42.5
    %
    
    
    34,511
    
    
    
    44.6
    %
    
    
    42,265
    
    
    
    45.2
    %Service
    
    
    1,050
    
    
    
    35.8
    %
    
    
    1,396
    
    
    
    34.2
    %
    
    
    4,790
    
    
    
    39.2
    %
    
    
    4,591
    
    
    
    34.8
    %Gross profit
    
    
    10,725
    
    
    
    45.1
    %
    
    
    14,937
    
    
    
    41.6
    %
    
    
    39,301
    
    
    
    43.9
    %
    
    
    46,856
    
    
    
    43.9
    %Operating Expenses:Research and development
    
    
    1,888
    
    
    
    7.9
    %
    
    
    3,374
    
    
    
    9.4
    %
    
    
    7,397
    
    
    
    8.3
    %
    
    
    9,353
    
    
    
    8.7
    %Sales and Marketing
    
    
    4,872
    
    
    
    20.5
    %
    
    
    9,107
    
    
    
    25.4
    %
    
    
    18,378
    
    
    
    20.5
    %
    
    
    24,957
    
    
    
    23.4
    %General and administrative
    
    
    2,283
    
    
    
    9.6
    %
    
    
    6,118
    
    
    
    17.0
    %
    
    
    8,348
    
    
    
    9.3
    %
    
    
    15,126
    
    
    
    14.2
    %Total operating expenses
    
    
    9,043
    
    
    
    38.0
    %
    
    
    18,599
    
    
    
    51.8
    %
    
    
    34,123
    
    
    
    38.1
    %
    
    
    49,436
    
    
    
    46.3
    %Operating income (loss)
    
    
    1,682
    
    
    
    7.1
    %
    
    
    (3,662
    )
    
    
    -10.2
    %
    
    
    5,178
    
    
    
    5.8
    %
    
    
    (2,580
    )
    
    
    -2.4
    %Other Income (Expense):Interest income (expense)
    
    
    (48
    )
    
    
    -0.2
    %
    
    
    (56
    )
    
    
    -0.1
    %
    
    
    (70
    )
    
    
    -0.1
    %
    
    
    325
    
    
    
    0.3
    %Other income (expense), net
    
    
    381
    
    
    
    1.6
    %
    
    
    (635
    )
    
    
    -1.8
    %
    
    
    1,031
    
    
    
    1.2
    %
    
    
    (487
    )
    
    
    -0.5
    %Total other income (loss)
    
    
    333
    
    
    
    1.4
    %
    
    
    (691
    )
    
    
    -1.9
    %
    
    
    961
    
    
    
    1.1
    %
    
    
    (162
    )
    
    
    -0.2
    %Income (loss) before income taxes and minority interest
    
    
    2,015
    
    
    
    8.5
    %
    
    
    (4,353
    )
    
    
    -12.1
    %
    
    
    6,139
    
    
    
    6.9
    %
    
    
    (2,742
    )
    
    
    -2.6
    %Income tax benefit
    
    
    8,960
    
    
    
    37.6
    %
    
    
    1,819
    
    
    
    5.1
    %
    
    
    8,890
    
    
    
    9.9
    %
    
    
    1,473
    
    
    
    1.4
    %Income (loss) before minority interest in loss of
consolidated entity
    
    
    10,975
    
    
    
    46.1
    %
    
    
    (2,534
    )
    
    
    -7.0
    %
    
    
    15,029
    
    
    
    16.8
    %
    
    
    (1,269
    )
    
    
    -1.2
    %Minority Interest in loss of consolidated entity
    
    
    4
    
    
    
    0.0
    %
    
    
    7
    
    
    
    0.0
    %
    
    
    39
    
    
    
    0.0
    %
    
    
    31
    
    
    
    0.0
    %Net income (loss)
    
    $
    10,979
    
    
    
    46.1
    %
    
    $
    (2,527
    )
    
    
    -7.0
    %
    
    $
    15,068
    
    
    
    16.8
    %
    
    $
    (1,238
    )
    
    
    -1.2
    %Income (loss) per share  basic
    
    $
    1.01
    
    
    
    
    
    
    $
    (0.11
    )
    
    
    
    
    
    $
    1.47
    
    
    
    
    
    
    $
    (0.08
    )Income (loss) per share  diluted
    
    $
    0.96
    
    
    
    
    
    
    $
    (0.11
    )
    
    
    
    
    
    $
    1.39
    
    
    
    
    
    
    $
    (0.08
    )Weighted average shares outstanding  basic
    
    
    10,838,402
    
    
    
    
    
    
    
    22,398,829
    
    
    
    
    
    
    
    10,236,838
    
    
    
    
    
    
    
    14,695,261Diluted Weighted average shares outstanding  diluted
    
    
    11,412,643
    
    
    
    
    
    
    
    22,398,829
    
    
    
    
    
    
    
    10,814,680
    
    
    
    
    
    
    
    14,695,261
 5




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##### 



Cardiac Science Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(in thousands)
 Dec 31, 2004
    
    
    Dec 31, 2005ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    21,902
    
    
    $
    3,546Marketable equity securities
    
    
    646
    
    
    
    Accounts receivable, net
    
    
    13,649
    
    
    
    25,738Inventories
    
    
    11,047
    
    
    
    22,052Deferred income taxes
    
    
    5,542
    
    
    
    12,115Prepaid expenses and other current assets
    
    
    790
    
    
    
    2,511Total current assets
    
    
    53,576
    
    
    
    65,962Machinery and equipment, net of accumulated depreciation
    
    
    4,314
    
    
    
    7,631Intangibles assets, net of accumulated amortization
    
    
    5,619
    
    
    
    35,338Goodwill
    
    
    9,072
    
    
    
    111,215Investment in unconsolidated entities
    
    
    1,000
    
    
    
    462Other assets
    
    
    
    
    
    
    100Deferred income taxes
    
    
    3,594
    
    
    
    27,849Total assets
    
    $
    77,175
    
    
    $
    248,557LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    5,615
    
    
    $
    11,642Accrued liabilities
    
    
    6,220
    
    
    
    11,918Warranty liabilities
    
    
    2,093
    
    
    
    2,348Deferred revenue
    
    
    4,754
    
    
    
    7,924Total current liabilities
    
    
    18,682
    
    
    
    33,832Other liabilities
    
    
    
    
    
    
    1,806Total liabilities
    
    
    18,682
    
    
    
    35,638Minority interest in consolidated entity
    
    
    159
    
    
    
    128Shareholders Equity
    
    
    58,334
    
    
    
    212,791Total liabilities and shareholders equity
    
    $
    77,175
    
    
    $
    248,557
 6




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##### 



Cardiac Science Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
 Three Months Ended
    
    
    Twelve Months EndedDecember 31,
    
    
    December 31,2004
    
    
    2005
    
    
    2004
    
    
    2005Operating Activities:Net income (loss)
    
    $
    10,979
    
    
    $
    (2,527
    )
    
    $
    15,068
    
    
    $
    (1,238
    )Adjustments to reconcile net income (loss) to
cash from (used in) operating activities:Depreciation and amortization
    
    
    394
    
    
    
    1,606
    
    
    
    1,574
    
    
    
    3,212Loss on sale of machinery and equipment
    
    
    16
    
    
    
    6
    
    
    
    20
    
    
    
    6Stock-based compensation expense
    
    
    19
    
    
    
    19
    
    
    
    73
    
    
    
    58Gain on sale of marketable equity securities
    
    
    (610
    )
    
    
    
    
    
    
    (610
    )
    
    
    (15
    )Deferred taxes
    
    
    (9,028
    )
    
    
    (1,856
    )
    
    
    (9,014
    )
    
    
    (1,565
    )Minority interest in consolidated entity
    
    
    (4
    )
    
    
    (7
    )
    
    
    (39
    )
    
    
    (31
    )Gain on sale of hemodynamic monitoring business
    
    
    
    
    
    
    
    
    
    
    (633
    )
    
    
    Loss on disposal of technology
    
    
    
    
    
    
    270
    
    
    
    
    
    
    
    270Loss in value of investment in unconsolidated entity
    
    
    
    
    
    
    916
    
    
    
    
    
    
    
    916Effect of foreign currency exchange
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    5Changes in operating assets and liabilities, net of businesses
acquired and divested:Accounts receivable
    
    
    199
    
    
    
    (5,194
    )
    
    
    (1,169
    )
    
    
    (5,034
    )Inventories
    
    
    (245
    )
    
    
    1,638
    
    
    
    775
    
    
    
    2,334Prepaid expenses and other current assets
    
    
    9
    
    
    
    (105
    )
    
    
    (51
    )
    
    
    (123
    )Accounts payable
    
    
    (378
    )
    
    
    (775
    )
    
    
    (568
    )
    
    
    (2,742
    )Accrued and
other liabilities
    
    
    1,814
    
    
    
    1,846
    
    
    
    332
    
    
    
    1,055Warranty liability
    
    
    84
    
    
    
    14
    
    
    
    49
    
    
    
    (208
    )Deferred revenue
    
    
    389
    
    
    
    1,752
    
    
    
    452
    
    
    
    2,250Net cash flows from (used in) operating activities
    
    
    3,638
    
    
    
    (2,392
    )
    
    
    6,259
    
    
    
    (850
    )Investing Activities:Purchases of machinery and equipment
    
    
    (323
    )
    
    
    (696
    )
    
    
    (666
    )
    
    
    (1,187
    )Payments of acquistion related costs, net of cash acquired of $6,295
    
    
    
    
    
    
    (1,588
    )
    
    
    
    
    
    
    (17,491
    )Proceeds from sale of marketable equity securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    625Proceeds from collection of a note receivable issued in connection
with the sale of hemodynamic monitoring product line
    
    
    750
    
    
    
    
    
    
    
    750
    
    
    
    Purchase of technology
    
    
    
    
    
    
    
    
    
    
    (125
    )
    
    
    Net cash flows from (used in) investing activities
    
    
    427
    
    
    
    (2,284
    )
    
    
    (41
    )
    
    
    (18,053
    )Financing Activities:Proceeds from issuance of stock, net of issuance costs
    
    
    
    
    
    
    (32
    )
    
    
    15,451
    
    
    
    (172
    )Proceeds from exercise of stock options and employee stock purchase plan
    
    
    154
    
    
    
    135
    
    
    
    890
    
    
    
    719Repayments on bank line of credit, net
    
    
    
    
    
    
    
    
    
    
    (354
    )
    
    
    Payments of long term debt
    
    
    (91
    )
    
    
    
    
    
    
    (363
    )
    
    
    Payment of note payable related to purchase of technology
    
    
    
    
    
    
    
    
    
    
    (125
    )
    
    
    Net cash flows from financing activities
    
    
    63
    
    
    
    103
    
    
    
    15,499
    
    
    
    547Net change in cash and cash equivalents
    
    
    4,128
    
    
    
    (4,573
    )
    
    
    21,717
    
    
    
    (18,356
    )Cash and cash equivalents, beginning of period
    
    
    17,774
    
    
    
    8,119
    
    
    
    185
    
    
    
    21,902Cash and cash equivalents, end of period
    
    $
    21,902
    
    
    $
    3,546
    
    
    $
    21,902
    
    
    $
    3,546
 7




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##### 



Cardiac Science Corporation and Subsidiaries
Reconciliation of GAAP Results to Pro Forma Results
(in thousands, except share and per share amounts)
 Reconciliation of Net Income to Pro Forma Net IncomeThree months ended December 31, 2005(In thousands, except per share amounts)As Reported
    
    
    Pro Forma Adjustementsin Accordance
    
    
    Merger
    
    
    Inventory
    
    
    Inventory
    
    
    Technology
    
    
    Equity Investment
    
    
    Pro Formawith GAAP
    
    
    Expenses
    
    
    Valuation
    
    
    Write-off
    
    
    Write-off
    
    
    Write-off
    
    
    ResultsTotal revenues
    
    $
    35,906
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    35,906Gross profit
    
    
    14,937
    
    
    
    919
    
    
    
    1,052
    
    
    
    465
    
    
    
    
    
    
    
    
    
    
    
    17,373%
    
    
    41.6
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48.4
    %Total operating expenses
    
    
    18,599
    
    
    
    (573
    )
    
    
    
    
    
    
    
    
    
    
    (347
    )
    
    
    
    
    
    
    17,679Operating income (loss)
    
    
    (3,662
    )
    
    
    1,492
    
    
    
    1,052
    
    
    
    465
    
    
    
    347
    
    
    
    
    
    
    
    (306
    )Total other income (expense)
    
    
    (691
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    916
    
    
    
    225Income (loss) before income taxes
    
    
    (4,353
    )
    
    
    1,492
    
    
    
    1,052
    
    
    
    465
    
    
    
    347
    
    
    
    916
    
    
    
    (81
    )Income tax (expense) benefit
    
    
    1,819
    
    
    
    (567
    )
    
    
    (399
    )
    
    
    (177
    )
    
    
    (132
    )
    
    
    (348
    )
    
    
    196Income (loss) before minority interest
    
    
    (2,534
    )
    
    
    925
    
    
    
    653
    
    
    
    288
    
    
    
    215
    
    
    
    568
    
    
    
    115Minority interest
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7Net income (loss)
    
    $
    (2,527
    )
    
    $
    925
    
    
    $
    653
    
    
    $
    288
    
    
    $
    215
    
    
    $
    568
    
    
    $
    122Weighted average shares  primary
    
    
    22,399
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,399Weighted average shares  fully diluted
    
    
    22,399
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,815Net income (loss) per share (1)
    
    $
    (0.11
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.01
 Reconciliation of Net Income to Pro Forma Net IncomeYear ended December 31, 2005(In thousands, except per share amounts)As Reported
    
    
    Pro Forma Adjustementsin Accordance
    
    
    Merger
    
    
    Inventory
    
    
    Inventory
    
    
    Technology
    
    
    Equity Investment
    
    
    Pro Formawith GAAP
    
    
    Expenses
    
    
    Valuation
    
    
    Write-off
    
    
    Write-off
    
    
    Write-off
    
    
    ResultsTotal revenues
    
    $
    106,650
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    106,650Gross profit
    
    
    46,856
    
    
    
    1,186
    
    
    
    1,567
    
    
    
    465
    
    
    
    
    
    
    
    
    
    
    
    50,074%
    
    
    43.9
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47.0
    %Total operating expenses
    
    
    49,436
    
    
    
    (2,244
    )
    
    
    
    
    
    
    
    
    
    
    (347
    )
    
    
    
    
    
    
    46,845Operating income (loss)
    
    
    (2,580
    )
    
    
    3,430
    
    
    
    1,567
    
    
    
    465
    
    
    
    347
    
    
    
    
    
    
    
    3,229Total other income (expense)
    
    
    (162
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    916
    
    
    
    754Income (loss) before income taxes
    
    
    (2,742
    )
    
    
    3,430
    
    
    
    1,567
    
    
    
    465
    
    
    
    347
    
    
    
    916
    
    
    
    3,983Income tax (expense) benefit
    
    
    1,473
    
    
    
    (1,303
    )
    
    
    (595
    )
    
    
    (177
    )
    
    
    (132
    )
    
    
    (348
    )
    
    
    (1,082
    )Income (loss) before minority interest
    
    
    (1,269
    )
    
    
    2,127
    
    
    
    972
    
    
    
    288
    
    
    
    215
    
    
    
    568
    
    
    
    2,901Minority interest
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31Net income (loss)
    
    $
    (1,238
    )
    
    $
    2,127
    
    
    $
    972
    
    
    $
    288
    
    
    $
    215
    
    
    $
    568
    
    
    $
    2,932Weighted average shares  primary
    
    
    14,695
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,695Weighted average shares  fully diluted
    
    
    14,695
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,173Net income (loss) per share (1)
    
    $
    (0.08
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.19
 
 (1)
    
    Primary weighted average shares are used for computing net loss per share and fully diluted weighted average shares are used for computing net income per share. Reconciliation of Cash Flows From Operations to Pro Forma Cash Flow From Operations(In thousands, except per share amounts)Pro FormaGAAP
    
    
    Adjustment for Merger
    
    
    Pro FormaResults
    
    

Related Cash Payments
    
    
    ResultsNet cash flows from operating activities for the three months ended 12/31/2005
    
    $
    (2,392
    )
    
    $
    2,448
    
    
    $
    56Net cash flows from operating activities for the year ended 12/31/2005
    
    $
    (850
    )
    
    $
    4,719
    
    
    $
    3,869
 8