Arie Cohen - Chief Executive Officer Randy Thurman - Executive Chairman Martin P. Galvan - Chief Financial Officer

Stephen Harper - Thomas Weisel Partners

Good morning and thank you for joining us for the CardioNet Second Quarter 2008 Earnings Conference Call. Certain statements during the conference call and question and answer period to follow may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities and Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the company in the future to be materially different than the statements that the company’s executives may make today. These risks are described in detail in public filings within the Securities and Exchange Commission including our latest periodic report on Form 10-K or 10-Q. We assume no duty to update these statements. At this time, all participants have been placed on a listen-only mode, and the floor will be opened for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Mr. Arie Cohen.

Good morning and welcome everyone to today’s call. This is our second quarterly earnings conference call as a public company following our initial public offering on the NASDAQ on March 18, 2008. The agenda for today’s call is to review our results for the quarter ended June 30, 2008, as well as the business development of CardioNet since our last earnings call in late April. As many of you know, I joined CardioNet as CEO in November 2007. Prior to CardioNet, I was at VIASYS Healthcare. I feel privileged to welcome another of my former VIASYS colleagues, Randy Thurman, to the CardioNet team. You may have seen our press release announcing Randy Thurman as joining CardioNet as Executive Chairman of the Board of Directors. Randy will be an invaluable resource as we continue to build upon CardioNet’s leadership in arrhythmia monitoring and using our proprietary wireless medicine platform. Randy has a proven track record of building world class healthcare organizations with strong corporate governance and creating significant shareholder value. Before we begin the quarterly review, I would like to turn the call over to Randy to say a few words.

Let me provide a little bit of background in terms of what I have done prior to CardioNet and then speak to why I joined CardioNet. As Arie alluded to, prior to joining CardioNet I was Chairman of the board and Chief Executive Officer of VIASYS Healthcare and was the creator of the company going back to 2000 and 2001. As many of you probably know, VIASYS Healthcare was acquired by Cardinal Healthcare about one year ago. The company was public, VIASYS that is, for about 5-1/2 years during which time we more than quadrupled the enterprise value of the company and we were named by Smart Money Magazine as one of the 10 best investments of the decade. So, we’re all very proud of what was accomplished at VIASYS Healthcare and certainly our shareholders fared extremely well in that experience. Prior to VIASYS Healthcare, I was Chairman and Chief Executive Officer of Corning Life Sciences, which spun off both Quest Diagnostics and Covance, and for those of you who may have been involved during that period of time, you’ll know that substantial shareholder value was created for the Corning shareholders by those two transactions. Prior to that, I was President of Rhone-Poulenc Rorer Pharmaceuticals Inc., from the early 80s through the early 90s, and Rhone-Poulenc Rorer posted one of the highest returns on shareholder equity in the entire pharmaceutical industry. I have, as you can tell, devoted my entire career to building healthcare companies that focus on improving the quality of human life and have created exceptional shareholder value in doing so. Following the sale of VIASYS to Cardinal, I evaluated a significant number of opportunities, and concluded that there were few if any that had the potential both in serving the quality of human life or in creating shareholder value that CardioNet represents. What I see in CardioNet is a young company that is establishing itself as the leader in the arrhythmia monitoring market with a novel solution, but really, this is a company that is just getting started. CardioNet’s initial focus of course is in the $2 billion arrhythmia monitoring segment. CardioNet’s mission is in transforming an industry that has historically relied on event or Holter technologies, which are essentially intermittent tape recorders with very low diagnostic yield and clinical benefit. Today, CardioNet has achieved only 6% market penetration suggesting that the potential for future growth as physicians become increasingly educated regarding how the three times higher diagnostic yield of the CardioNet System can meaningfully improve clinical outcomes and reduce healthcare costs. The opportunity is substantial. But the story only begins there. There are numerous other applications and market opportunities of the CardioNet platform that will impact the use of wireless medicine in healthcare. Leveraging the CardioNet System in the hospital emergency room setting, in pharmaceutical clinical trials, in international markets, or to use the wireless infrastructure to connect to other external and implantable sensors for monitoring of other diseases, these are just the beginning for CardioNet, and indeed, the possibility seems endless. Lastly, the CardioNet shareholders should feel very confident in the management team that has been created at CardioNet. I have worked with Arie for years, and I have worked with Marty going back to the Rhone-Poulenc years. These are two extremely committed professionals, who have a track record of tremendous success, which I am certain will continue forward with CardioNet. I look forward in the coming weeks to meeting all of you and would encourage any of you who would like to dialogue with me directly about the CardioNet opportunity to do so.

Also, I would like to take a moment to acknowledge Jim Sweeney. As many of you know, Jim founded CardioNet in 1999 and served as the company’s CEO until my arrival in November, and as Executive Chairman until Randy’s arrival in early July. Jim assisted the company in raising over $250 million in capital since its inception and building the business to completion of a successful IPO. Jim’s leadership has been instrumental in developing the CardioNet technology and business strategy. We wish Jim all the best in his new endeavors. Now, onto the quarter. Martin Galvan, CardioNet’s CFO, will be speaking in a few moments to provide you the detailed financial highlights of our second quarter 2008, but I would like to just spend a few moments reviewing some of the recent business developments at CardioNet. I am very happy to report that for the second quarter in a row CardioNet is ahead of the analyst expectations both on the top-line where we reported 68% year over year revenue growth and on the bottom-line where we are $0.01 ahead of consensus EPS estimates. I remain very excited about our company’s recent progress and our prospects for continuous growth. As you know, CardioNet’s primary near-term focus is on cardiac arrhythmia monitoring and diagnosis. Four million Americans are affected by cardiac arrhythmias, 750,000 of which are hospitalized annually. The national average charge for a hospital admission for cardiac arrhythmias is over $26,000. Approximately 1.5 million event monitor sessions and over 2 million Holter monitoring sessions are conducted every year. These traditional technologies have suffered for one or more drawbacks including the inability to detect asymptomatic events, failure to provide real-time data, memory constraints, the need for significant patient involvement, and the inability to measure patient compliance. Our mission is to replace event and Holter monitoring with the CardioNet System. The CardioNet System’s three times higher diagnostic yield in detecting clinically significant arrhythmias was proven by a landmark randomized clinical trial with 300 patients published in early 2007. On the payer side, we have continued to make progress in the second quarter as we have broadcast our clinical trials results to commercial payers describing how the CardioNet System can avoid the $26,000 hospitalization charge. Today, we have approximately 70% of our targeted population that is covered by Medicare and commercial payers aggregating to 177 million covered lives. In 2008, year to date, we have added 14 new contracts representing 19.1 million lives. Many of you recall that towards the end of the first quarter we added a large national contract with a major payer representing 16 million lives. Q2 was the first quarter where we added this particular payer under our belt, and as expected, we saw the early rewards of that contract. I should caution everyone that this contract will impact our business gradually over many quarters, not in a [stiff function factor]. In short, we are very pleased with the impact of this new contract. Looking ahead, we expect at least one more significant larger national payer to come on board by year end 2008. We will keep you informed of any new development on this front. With respect to reimbursement, I would like to remind everyone that we continue to work towards securing a national CPT code by early 2009. I do not have any specific details to report. We remain confident that we will receive this code and have no reason to believe that the prevailing pricing will be any different than our historical reimbursement rate. Again, stay tuned. On the sales and marketing side, we currently have 83 account executives in the field covering 10 regions across the US. This number is an increase from 73 at the end of the first quarter. We remain pleased with the quality and productivity of our sales representatives under the leadership of our senior VP of sales and marketing, Manny Gerolamo, who we hired earlier this year from Reliance Pharmaceuticals. We have a single sales force that promotes our CardioNet comprehensive one-stop shop solution for all arrhythmia monitoring needs, all with our differentiated CardioNet System and Legacy Holter and event monitors that we gained access to from the PDSHeart acquisition in 2007. With respect to our product development program; CardioNet remains committed to continuous innovation as evidenced by our steady investment in research and development. Even though we have a meaningful lead from a competitive standpoint, we are not standing still. To this end, I would like to spend a few moments describing a new capability that we intend to launch in September 2008 for atrial fibrillation management. Atrial fibrillation is the most prevalent life threatening cardiac arrhythmia affecting over 2.2 million Americans. Each year approximately 160,000 people in the US are diagnosed with AF. The risk of stroke with AF is 5 to 7 times greater than those without it. Our new AF management program centers around a new diagnostic AF reporting package that provides physicians with enhanced capabilities to diagnose, manage, and treat atrial fibrillation. This will represent the most comprehensive reporting package available further increasing our competitive differentiation. We will leverage this new recording package to further engage in the cardiology [and EP] marketplace while offering improved capability for drug titration, AF rate control, and post procedure followup. Additionally, with the new AF recording package, we will be able to begin to penetrate the rapidly expanding new market segment of cardiothoracic post surgical ablation. CP surgeons performing AF ablation procedures will have an effective clinical tool for postprocedure management. We have demonstrated this product to key opinion leaders at the Heart Rhythm Society meeting in May, and it was met with overwhelming positive feedback and enthusiasm. Moving on, I wanted to provide a quick update on the continued roll-out of our latest CardioNet System monitor and sensor that we refer to as C3, our third generation product. As a reminder, the C3 builds upon the features of our prior C2 product with numerous performance and functional enhancement. The cost of manufacturing C3 is approximately 35% less. We are continuing to execute our replacement plan. While we do not disclose the number of monitors in our inventory, I would like to state that we have sufficient monitors for our expected growth. In fact, as we retire C2s, we will keep this as a backup supply just in case we ever need them in the future. On the business efficiency initiative front, we have continued to work hard this quarter to complete the integration of the former PDSHeart business operation into our Philadelphia offices in a timely manner without disruption to our business or to our customers. In addition, we are also integrating into our Philadelphia offices some of the functions that were previously in our San Diego office. San Diego will remain our technology center focussed on R&D and IT development. Lastly, in May we announced that we would enter into settlement agreement with LifeWorks regarding the previously outstanding litigation. The parties have agreed to resolve the law suit with dismissal by both sides of all claims pending in the law suit. Terms of the agreement are confidential. We are pleased to have this behind us. So, in summary, a very solid quarter with investment and initiatives underway to pave the way for a continued growth as we move into the second half of 2008. I will now turn the call over to Marty, who will provide the financial highlights. Martin P. Galvan: Now that Arie has provided you with an update on our operations, I will review our second quarter and first half 2008 financial results and will be discussing some of the key drivers that have contributed to these results. Before getting into the financials, I would like to comment that today CardioNet filed the registration statement related to a 4.7 million share underwritten equity offering of our common stock with Citi as sole book-runner. It’s important to note that we will not be receiving any proceeds from this transaction as the offering will be comprised entirely of selling shareholders who were investors prior to the IPO. For further details, I would refer you to the press release that we issued earlier today and the registration statement filed with the SEC. Now, with respect to my financial commentary, please keep in mind that unless mentioned otherwise, all of my comments will refer to financial results on a non-GAAP basis. There is a reconciliation included in the press released that we issued earlier today that describes in detail how we have calculated these non-GAAP figures. In the second quarter, revenue increased by 68% to $29.3 million compared to $17.4 million in the second quarter of 2007. Driving the growth were sales of the CardioNet System with $24.3 million in revenue, up from $11.6 million in the second quarter of 2007 or an increase of 109%. This increase was offset by decreases in event and Holter revenue. CardioNet System revenue in the second quarter accounted for 83% of our revenue compared to 79% in the first quarter of 2008 and 67% of revenue in the second quarter of last year. For the first half comparison, if you adjust the prior year as if the PDSHeart acquisition was completed as of January 1, 2007, revenue increased by 68% to $54.8 million. During the first half, CardioNet System revenue was $44.4 million, an increased 112% as compared to the first half of 2007. The CardioNet System was 81% of revenue in 2008’s first half compared to 64% of adjusted revenue for the same period last year. Our second quarter business mix was 33% Medicare and 67% commercial, which is consistent with our first quarter performance. Additionally, we successfully concluded negotiations and signed contracts with nine commercial payers representing 1 million lives. Jumping to operating income, in the second quarter we achieved our fourth consecutive quarter of profitability with $3.1 million in operating income. This was a major improvement in operating income as compared to the $1 million loss in the second quarter of 2007 and a $600,000 profit in the first quarter of this year. For the first half of 2008, operating income increased to $3.8 million compared to a loss of $3.2 million in the first half of 2007. This significant improvement in our operating results was primarily due to higher revenue in 2008, improved gross margin, and the decline in operating expenses as a percent of revenue. Now that I’ve covered revenue and operating income results, I will address the changes in gross profit and operating expenses. Gross profit in the second quarter increased to $19.5 million or 66.5% of revenue compared to gross profit of $11.5 million or 65.8% of revenue in the second quarter of 2007, an increase of 70 basis points. The increase is primarily due to favorable mix resulting from increased CardioNet System revenue compared to our lower margin event and Holter business. Compared to the first quarter of 2008, gross profit increased almost 400 basis points. You will recall that in the first quarter of 2008, we experienced a fuel surcharge related to the shipment of the CardioNet System to and from patients that negatively impacted our gross profit. In the second quarter, while we continued to experience this fuel surcharge, we were able to offset its impact through improved operating efficiencies, cost reduction initiatives, and price reductions from two major suppliers. We expect to continue offsetting the fuel surcharge during the remainder of this year with manufacturing cost and operating expense reductions. For the first half of 2008, gross profit increased to $35.5 million or 64.7% of revenue compared to gross profit of 65.8% of revenue in the first half of 2007. If you adjust the prior year to include PDSHeart as if the acquisition occurred on January 1, 2007, the prior year first half gross profit would have been 65% of revenue. The 30 basis point decrease in gross profit occurred despite the second quarter increase and was due to the low gross profit that we experienced in the first quarter of this year. Moving down the income statement; operating expenses increased year over year as we continued to make investments in our management team, sales and marketing, and research and development. However, despite this increase, operating expense as a percent of revenue declined year over year as we continued to gain significant leverage. At this point, it is important to comment on expenses that we have excluded from our non-GAAP results. These are related to the settlement of the LifeWatch litigation which we announced in mid May, the integration of certain PDSHeart activities, and specific restructuring efforts to improve efficiency in the organization. These expenses were $610,000 in the second quarter and $1.9 million for the first half. Our effective tax rate for the quarter was 41.8%. The 41.8% rate assumes no utilization of the $62 million in federal operating loss carry forwards that we had as of year-end 2007. We continue to evaluate the status of the utilization of our federal operating loss carry forwards and will chew up the tax rate in the second half of the year as appropriate. This is explained more fully in our recent S-1 in the income tax note of the financial statements. Adjusted net income in the second quarter improved significantly to $2 million or $0.08 per diluted share compared to an adjusted net loss of $1.1 million or a loss of $0.36 per share in 2007. The improvement in adjusted net income for the first half also was significant. In the first half, adjusted net income was $2.4 million or $0.11 per diluted share compared to an adjusted net loss of $4.3 million or a loss of $1.41 per share for the same period last year. The adjusted EPS of $0.11 per diluted shared for the first half was calculated using a share count of 21.3 million which is our diluted weighted average shares outstanding in the first half. Let me explain why we are using 21.3 million shares as opposed to the 13.4 million that you see on our P&L. On a GAAP basis, we incurred a net loss in the first half, and using the higher diluted share count would have had an anti-dilutive impact on EPS. Therefore, for GAAP purposes, we were required to use the basic share count of 13.4 million for both basic and diluted EPS. But because our adjusted net income is positive, we’ve used the 21.3 million share count to calculate the adjusted EPS of $0.11 per diluted share. Now to touch briefly on the balance sheet and cash flow. Cash and cash equivalents were $54.6 million and debt was negligible with an April debt repayment of $2.5 million. Operating cash flow for the quarter was $106,000, capital spending was $2 million, and free cash flow was negative $1.9 million. Accounts receivable was $29.3 million compared to $25.8 million at the end of the first quarter with DSO decreasing to 84 days reflecting a decrease of two days. This improvement in DSO was a result of a decrease in receivables due from patients. In our first quarter earnings call we explained that similar to other companies that have receivables due from commercial healthcare payers and patients, our DSO increased in the first quarter due to an increase in receivables from patients as a result of copays and deductibles resetting at January 1. These payments due from patients tend to be delayed. As I mentioned, in the second quarter these receivables due from patients have decreased because copay and deductible limits are being met and as a result we have an improvement in DSO. Turning now to our expectations for 2008. We have set a revenue target of $117 million to $120 million for the full year 2008. As we stated in our press release, the strength of our second quarter increases our level of comfort toward the high end of that range. With respect to the third and fourth quarter outlook, we believe that the third quarter will be impacted by seasonality related to physician and patient schedules over the summer months which will moderate the sequential growth. In regard to expenses, we expect to incur charges in the third quarter related to the secondary offering which we announced earlier today. In addition, we expect make investments over the second half of 2008 in sales and marketing resources, infrastructure to support our growth, and R&D projects to enhance our product portfolio, all to position the company for 2009 and beyond. We believe that we will continue to maintain a very strong balance sheet and expect to leverage this balance sheet to maintain our investing in the business and to support opportunistic strategic acquisitions. We believe both will further strengthen our performance in the future. Thank you and I will now turn the call back to Arie for some closing comments.

Thank you Marty. We remain very encouraged by the positive results in our second quarter. In closing, we have a clear vision for growth, we will continue to focus on the $2 billion market opportunity, and increase market penetration beyond the current 6% level. In parallel, we will evaluate additional growth opportunities to leverage our wireless medicine platform into our application and new markets. After joining as the CEO in November 2007, one of my top priorities was to build a high-performance management team. Over the last seven months, we have hired a VP of Sales and Marketing, a VP of Business Operations, a VP of R&D, and VP of Human Resources. I am pleased to say that my senior management team is now largely in place. I am convinced that this management team has a unique combination of deep experience and entrepreneurial spirit that would help CardioNet reach its full potential, and most importantly, build value for our shareholders. Now, I will open the call for question and answers.

(Operator instructions) Your first question comes from the line of Stephen Harper with Thomas Weisel Partners. Please proceed. Stephen Harper - Thomas Weisel Partners: On the number of sales reps that you indicated; 83, was that an end-of-period number?

Yes Steve. That was the end-of-period number. We have 85 territories and as of today we have 83 numbers, two openings obviously; and again, that’s a substantial increase over the end of Q1. Stephen Harper - Thomas Weisel Partners: Right. So in your planning for the second half of the year, is there an expectation that that 83 goes higher in addition to filling those two slots that you have open.

Yes Steve. We are growing and we are looking and hiring. The plan is probably we will reach to the 89 level and then probably beyond as we move forward. When we look at opportunities, we will increase the number of territories, but definitely we will grow it to the 89 level. Stephen Harper - Thomas Weisel Partners: And do you feel comfortable in terms of how some of the newly hired sales reps have ramped up?

Yes. It has been an excellent progress. We have a profile that we’re looking for in our new reps and we are monitoring their performance very closely. So I think everything is moving very positively on that end.

(Operator instructions) There are no further questions in queue at this time.

Before we close the conference call, I would like to say thanks to all of you for spending time with us this morning, and we appreciate your interest and continuing support. Thank you.

Ladies and gentlemen, thank you for your participation in today’s conference. And if you joined the conference late today, you may listen to the conference on digital replay which will be available from July 22 to August 5, 2008, on 888-286-8010 or 617-801-6888 with pass code 619 506 13. Again, thank you for your participation and you may now disconnect. Have a great day.