Randy Thurman - Chairman, President and CEO Marty Galvan - SVP and CFO Philip Leone - VP, Managed Care Anna McNamara - SVP, Clinical Operations

Amit Bahl - Citi Bob Hopkins - Banc of America-Merrill Lynch Rick Wise - Leerink Swann Matt Dolan - Roth Capital Alan Fishman - Thomas Weisel Partners Michael Hunt - Barclays Capital Milan Gupta - South Point Capital

Good afternoon. Thank you for joining us for the CardioNet first quarter 2009 Earnings 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 Litigations Act of 1995. Such statements involve unknown and known risks, uncertainties, and other factors, which may cause the actual results, performance or achievement of the company in the future to be materially different from the statements that the company's executive may make today. These risks are described and detailed in our public filings with the Securities and Exchange Commission, including our latest periodic report in Form 10-K or 10-Q. We assume no duty to update these statements. At this time, all participants have been placed in a listen-only mode and the floor will open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host Mr. Randy Thurman. Sir, you may begin.

Thank you very much, and welcome to the CardioNet Incorporated first quarter investor conference call. I am Randy Thurman, Chairman, President and Chief Executive Officer of CardioNet Incorporated. With me this afternoon is Marty Galvan, Senior Vice President and Chief Financial Officer and Anna McNamara, Senior Vice President of Clinical Operation, and Phil Leone, Senior Vice President of Managed Care. During the first quarter, we made excellent progress in the execution of our 2009 plans. We continue to leverage the clinically proven superiority of the MCOT systems and our world class customer service and monitoring organizations to effectively expand on the $2 billion cardiac monitoring market. We made significant strides in enhancing our corporate infrastructure through the expansion of our sales force and establishing a solid platform technology for accelerated growth in 2010 and beyond. We also announced a merger agreement with Biotel Incorporated, which we believe will diversify our revenue stream, accelerate next generation R&D and provide entry into the clinical research services business. During the quarter, we also announced the formation of a Medical Advisory Board comprised of some of the most notable professionals in cardiac medicine and beyond. Before I elaborate on our accomplishments, I would like to provide some of the key financial highlights for the quarter. Revenue in the first quarter increased 40% year-over-year, and is up 4% sequentially reaching $35.7 million. This marks our fifth consecutive quarter of increased revenues since going public. Gross margin increased year-over-year to 66.9% of revenue, and we delivered adjusted earnings per share of $0.04 in the quarter demonstrating our commitment to growing earnings while investing in our sales and corporate infrastructure to further expand our market share. Marty will provide you with a more detailed financial review in his prepared remarks. Now, I would like to provide some additional detail on our accomplishments during the quarter. Under the leadership of our newly appointed Senior Vice President of Sales Matt Margolies, we are successfully expanding our sales organization with a highly experienced and qualified team of account executive. We are currently ahead of schedule in our sales force expansion goal of a 70% increase in account executives during 2009. Since the end of the year, we have added 41 new sales reps, bringing the current number to 129. The majority of the newly added account executive's are just beginning the training phase, and will begin the process of introducing our MCOT system to physicians and hospitals and their respective territories in the weeks ahead. We are screening about 10 qualified applicants for every new account executive hire. As you know, adding these highly experienced account reps to our existing team is one important element in our outlook for 2010 and beyond. Some of these account executives will be focused solely on leading teaching hospitals, where we see great potential to cultivate new business and place our MCOT system in use with top leading practitioners and researchers. Our goal is to establish a strong presence for CardioNet at leading hospitals and academic research centers around the country as we believe this will be important as a direct contributor to expanding our market share. We will complete our sales force expansion by mid year, which will leave us poise to gain in even larger share of the cardiac arrhythmia monitoring market in 2010 and beyond. Another area that we are highly focused on is research and development. It is imperative that we maintain and even increase our leadership position in wireless cardiac monitoring. We are planning on making several announcements at the upcoming Heart Rhythm Society meeting in May, regarding significant advancements in our technology that demonstrate our commitment to continual innovation. As I previously mentioned, we recently announced our merger agreement with Biotel. This acquisition will accelerate the development of the next generation MCOT, as well as adding to our portfolio what we believe is the leading wireless event monitoring technology. As a result CardioNet will be providing physicians with best-in-class event monitoring that can serve as a transition into wireless products and to our MCOT system. We are equally excited that our merger agreement with Biotel will allow us to launch our first adjacent market opportunity in clinical research services. This is an area that we have been interested in for sometime and is a natural extension of our existing business. We look forward to having the opportunity to incorporate our MCOT system into the Biotel research services platform, known as in Agility providing medical device and pharmaceutical customers with the leading monitoring system for the reliable collection end analysis of ECG data for patients participating in clinical trials. There is strong demand in the healthcare industry from drug development and medical device companies for these value added services. And we believe the outlook is very promising for this business. CardioNet is the unquestioned leader in the industry in providing clinical research that demonstrates MCOT’s superiority to cardiologist and electrophysiologists. In addition, MCOT is also being used by independent research organization to expand MCOT’s clinical utility. Our ongoing clinical programs continue to make key contributions to our success in expanding awareness of the value of MCOT. To date, there had been 21 completed clinical studies and abstracts demonstrating the clinical efficacy of the MCOT system. In addition, there are several new studies underway utilizing MCOT as a diagnostic tool and we are supporting primary investigators in studies designed to show clinical superiority. No other competitor in the MCOT space has completed or published any study. Cardiologist, electrophysiologists, researchers and even payers demand the integrity of our products and services that can only be demonstrated by CardioNet’s unequal commitment to clinical research. Again, no other MCOT competitor can make this claim. With regard to clinical research, some of CardioNet’s clinical success will be discussed at the upcoming HRS meeting. The Heart Rhythm Society is the world’s leading venue bringing together cardiologists, electrophysiologist and research based industry provider such as CardioNet. Science, discovery and innovation represent the driving forces behind each of these constituencies. CardioNet is excited to be one of the feature companies at this year's HRS meeting. Look for us to make several announcements at the meeting, which will advance our leadership position. Now let me comment on the reimbursement front, another area where CardioNet has taken on the leadership role in the industry. Q1 2009 was the first quarter that included Category I CPT Codes and Reimbursement Rates for the professional and technical components of our MCOT system, setting the stage for a more simplified and stable, reimbursement environment going forward. In addition, the validation provided by having dedicated CPT Codes has been positive reinforcement in our efforts to establish coverage with the remaining commercial payers. Year-to-date, we have added 11 new payers, representing over 4 million new covered lives. As such, CardioNet now has contracts covering nearly 200 million lives. Coupled with the fact, that CardioNet will soon have been used on a quarter of a million patients, nearly 7 times that of any MCOT competitor, it is clear that we've moved well beyond the experimental or investigational stage. We have established the MCOT as the most cost beneficial means of providing wireless cardiac monitoring. Everyone benefits greatly, the payers, the physicians and most importantly the patients. With that I will now turn the call over to Marty for his financial review.

Thank you Randy, and good afternoon everyone. Now that Randy has commented on our operations, I will review our financial results for the first quarter of 2009. I want to remind everyone that unless mentioned otherwise, all of my comments will refer to financial result on a non-GAAP basis. There is a reconciliation included in the press release that we issued earlier today that describes in detail how we have calculated this non-GAAP figures. As Randy indicated in the first quarter, revenue increased by $10.2 million or 40.3% to $35.7 million compared to $25.5 million in the first quarter of 2008. Driving the growth were MCOT system revenues of $31.4 million up from $21.1 million in Q1 of 2008 or a increase of 56.2%. Revenue from the MCOT system continues to grow as a percent of revenue representing 88% of revenue in the first quarter, compared to 86% in the fourth quarter of 2008 and 79% of revenue in the first quarter of last year. Offsetting this growth our declines in event in Holter revenue, as we continue to convert physicians to the new technology. Consistent with the trend last year, our payer mix was 34% Medicare and 66% commercial in the quarter. Gross profit in the first quarter increased to $23.9 million or 66.9% of revenue, compared to gross profit of $15.9 million or 62.6% of revenue in the first quarter of 2008. This improvement of 430 basis points was primarily due to operational efficiencies largely in our cardiac monitoring center and related areas, cost reductions negotiated with our largest suppliers, as well as lower fuel surcharges and higher volume discounts on our device shipments. Turning to operating income. In the first quarter we achieved our seventh consecutive quarter of profitability with $1.6 million in adjusted operating income. This compares favorably to the $600,000 adjusted operating income in the first quarter of 2008. As a percent of revenue, our operating margin in the first quarter increased to 4.6%, compared to 2.4% in the first quarter 2008. Our operating income continues to improve, as we gain leverage due to higher revenue in combination with operational efficiencies. Included in our first quarter 2009, GAAP operating expense is $3 million of non-recurring charges, primarily due to our recent executive management changes and cost related to our pending merger with Biotel. Included in last year’s first quarter GAAP operating expense is $1.3 million of non-recurring charges primarily relating to the settlement of litigation and the integration of PDSHeart. Consistent with our expectations, our effective tax rate for the quarter was 41.1%. Adjusted net income excluding non-recurring charges increased to $1 million or $0.04 per diluted share in the first quarter compared to adjusted net income of $400,000 or $0.02 per diluted share in Q1 of 2008. With respect to share account, the adjusted EPS of $0.04 per diluted share in the first quarter of 2009 was calculated using diluted weighted average shares of 23.9 million, as opposed to the 23.6 million shares that you see in our earnings release. The adjusted EPS of $0.02 per diluted share for the first quarter of 2008 was calculated using diluted weighted average shares of 18.3 million as opposed to the 4.7 million shares in our release. As we incurred a net loss for both periods on a GAAP basis, we are required to use the basic share account for the calculation of EPS. This is because using the higher diluted share account would have had an anti-dilutive impact on EPS. Therefore, because we had positive earnings on an adjusted basis in the first quarters of 2008 and 2009, we are providing the diluted share account for reference. Now to touch briefly on the balance sheet and cash flow. At the end of the quarter, cash and cash equivalents were $50.4 million. In the quarter, we had negative free cash flow of $10.2 million, which was inline with our expectations and consisted of cash used in operations equal to $4.6 million and capital spending of $5.6 million. The cash used in operations was primarily driven by increased accounts receivable, which I will address shortly. Capital spending consisted of investments in our infrastructure and on additional devices in support of our growth. Net accounts receivable were $47.9 million compared to $39.4 million at the end of 2008, with DSO of 110 days, which is inline with our expectations for the quarter. DSO increased by 12 days primarily reflecting the usual receivables pattern early in the year of companies like CardioNet that has a significant percentage of revenue, which is reimbursed by commercial health plans. As you all know, health plans reset co-pays and deductibles annually at January 1, and as a result in the first quarter, a larger percentage of our receivables are due from individuals rather than from the commercial plans. This had the effect of softening collections in the first quarter and negatively impacted our DSO. We experienced the same impact in the first quarter of previous years. Regardless of the impact of the resetting of deductibles and co-pays, as we have previously acknowledged, we believe that our accounts receivable is at an unsatisfactory level and correcting the situation and lowering our bad debt expense, our two of CardioNet's highest priorities for 2009. We have several initiatives underway to remedy the situation. Our action plan addresses people and process and consists of the following key points. We have hired an executive with over 20 years experience in healthcare receivables. This individual reports directly to me and with me is spearheading our actions in this area to deliver immediate results and continuos improvement in the future. Second, we are reviewing our receivables function and restructuring as necessary to ensure effective and timely processing and collection of receivables. Third, we have partnered with a major consulting firm in this area, to ensure we employ best practices and that our receivables function meets the company's need for today and for the future. And lastly, with respect to older receivables, we are outsourcing their collection to a firm very experienced in this type of effort. We are committed to making significant progress in lowering our DSO and are confident in our ability to do so. However, we do not expect to see DSO significantly reduced until the third or fourth quarter of this year, as it will take time to realize the impact of these initiatives. Looking forward and turning to our guidance, I would like to provide some additional detail around our outlook for 2009. As we indicated in our earnings release, we are reaffirming our 2009 outlook of $0.69 to $0.73 per diluted share, excluding the impact of net operating losses, which does not take into consideration a potential $0.01 per share dilution that may occur due to the pending merger with Biotel. With respect to the quarters in 2009, we expect sequential quarterly revenue growth to be consistently in the low to mid teens. As for the pace of earnings across the year, we continue to anticipate that our quarterly EPS flow in the first half of 2009 will be very similar to that which we experienced in 2008 and that the growth in EPS in 2009 compared to 2008 incurs entirely in the second half of 2009. This earnings pacing is primarily driven by increased expense due to the new account executives coming on board in the first half of this year with limited productivity expected until the latter part of the year. Regarding the impact of NOLs and other tax related items on our future results, in 2009 we expect to fully realize the remaining P&L benefit of the NOLs resulting in a favorable impact on earnings of $1 to $1.30 per diluted share. We expect to reflect this benefit in our third quarter GAAP results. On a cash basis in 2009, we expect a favorable impact on cash due to the avoidance of cash payments of approximately $4.6 million with similar cash impacts expected in both 2010 and 2011. We believe that we will have substantially exhausted all of the NOL cash benefit by the end of 2011. With respect to our effective tax rate for 2009, we expect the rate to be 41% excluding the impact o NOLs and other tax related items. We also expect the similar rate in 2010 and 2011. Thank you, and I will now turn the call back to Randy for some closing comments.

Thank you, Marty. Year-to-date, we have compiled an impressive list of accomplishments for young company in addition to posting our fifth consecutive quarter with increased revenues. We've launched a new state of the art monitoring center. We've increased our sales force by nearly 50%. We announced the acquisition of Biotel. We've added over 4 million covered new lives. We positioned ourselves for several major announcements at the heart rhythm society meeting. We’ve completely re-tooled our account receivables organization. We've obtained over 95% satisfaction rating from all MCOT users. We fully converted to the C3 MCOT platform. We've enhanced the leadership in the company by way of example with our new Senior Vice President of Sales. We've announced a medical advisory board with some of the most influential top leaders in our industry. We’ve improved new key operational metrics including reducing turnover by over 50%. As of yesterday, we hit a new milestone surpassing 600 physician MCOT referrals per day. The future for CardioNet is very bright indeed. We have already established ourselves as the best-in-class company in cardiac monitoring, and also building a platform for CardioNet as a leader in the emerging field of wireless medicine. At this point, we will take your questions.

(Operator Instructions). Your first question will come from the line of Amit Bahl with Citi. Amit Bahl - Citi: I wonder if you start with just sales force for a minute given the ramp up in the sales force this quarter. Marty, can you just go back and just remind us what your assumptions for these sales reps, how long it will take them to be productive, and then just spend a minute talking through what assumptions there are for the revenue that could be generated for a new rep versus one that’s been on board for 12 months or long, and I have two more.

As far as our assumption about the productivity of a new rep, what we have modeled is that the rep is, an Account Executive as we call them are breaking even in terms of the revenue they generate versus the cost of them. We model that they are breakeven in the eighth or ninth month essentially. Then, what we do as far as modeling a new rep versus one has been on board more than 12 months, we have seen what the pattern is historically, primarily in 2007 and 2008, and model consistently with that to track out new rep and they will be held lower assumption of sales in their first 12 months compared to one that’s been on board for longer. Amit Bahl - Citi: Can you put any numbers around that?

Over the top, you will see that 2008, the average rep was in the range of 1.2 million, 1.4 million. The new rep in their first year is less than that obviously somewhere in the half to three quarters range, about a half, usually half have that productive in his first year on annual business. Amit Bahl - Citi: Two quick follow-ups. In terms of receivables and the DSOs, are CMS still collecting on the 30 to 60-day schedule and have any commercial payers taken longer to actually pay you guys. Then a question for Phil on reimbursement. Phil can you just go through for us the input that CMS looks at when they are trying to determine physician fee as well as technical fee rates for the technology?

So Amit, first let take the receivable and payment questions. So, Medicare, we have not seen Medicare increasing with the time and things they pay usually within 30 days. We are not seeing at this stage anything in terms of our commercial payers extending their amount of time.

In regards to the inputs with CMS, it’s broken down into two parts, one is what the (inaudible). Which is the number of minutes that actually are monitoring center technicians, monitor the patients over the course of the average length of service, which was established to be 14 days as related to valuing the CPT code and basically any technician time where we’re touching the patient either monitoring the patient, preparing the equipment for the patient, configuring the device for the patients, device which we will cause in patient education and that's one part of the process. The second part is, we would submit directly to CMS our capital equipment costs, which is the cost of the device, hardware, software to run the monitoring center and those two things go into formulae with CMS and ultimately the reimbursement for the technical component. As it relates to the professional component, there was survey data done by the ACC and HRS that CardioNet was not a part of and that information was submitted also directly to CMS last year. Amit Bahl - Citi: And Maybe you just kind of talk to us about what you're assumptions are for reimbursements going forward and I'll jump back. Thanks.

In our three year, in our earnings projections that we put out through 2011, we have assumed some reduction in reimbursement that's factored into the earnings projections we have put out there. As a matter of process, we really work in hand glove with Highmark and with CMS on an ongoing basis. And as Phil went through the detail, candidly the argument is just as strong that we could justify a higher level of reimbursement as there would be any reduction. Certainly the process works, we know of reason today to expect any significant change in the reimbursement levels.

And your next question will come from the line of Bob Hopkins with Banc of America-Merrill Lynch. Please proceed. Bob Hopkins - Banc of America-Merrill Lynch: Hi thanks and good afternoon. Can you hear me okay? Great Marty I just wanted to start with a question on the cash, and obviously as time goes on if you're projections coming through you’ll be generating more cash, but I'm just wondering what do you think the probability is over the next 12 months, given the current cash position and cash burn that you'll seek to raise additional capital?

Bob, we do not see, we do not anticipate needing to do that as business continues normal business

I can say definitively that based on our current projections, we would not encumber the balance sheet with any new debt vehicle or issuing shares to raise capital whatsoever. The cash flow from operation should more than meet our needs and any short-term debts that we would have would be well within our current cash flow ability. Bob Hopkins - Banc of America-Merrill Lynch: Okay. Thanks. And then just wanted to ask a couple on reimbursement. First, I know that the back and forth with Highmark over the course of the last week, did you ask them specifically about your reimbursement rate and whether or not it was under review at the current time?

We really have an outstanding relationship with Highmark, and a dialogue with them that is weekly if not more frequently and this always happens. And Phil went through the kind of the detailed explanation of how reimbursement is determined and we have no question that if there was any meaningful or anticipated change in the reimbursement rates that we would be well aware of that, that's the professional relationship that exist with Highmark. And so at this point in time, we see nothing that would significantly change our current rate of reimbursement. Bob Hopkins - Banc of America-Merrill Lynch: So you did, ask them specifically about whether or not reimbursement was under review at the current time, and they said, no.

As I just said, we know nothing based on our relationship with Highmark that would anticipate any change on reimbursement whatsoever. Bob Hopkins - Banc of America-Merrill Lynch: Do you have a senses to whether or not Medicare will takeover the pricing process this July or whether that will take another year.

We are pursuing. I guess, it’s business as usual with the process of getting them the information, which we’ll be doing over the summer and meeting with them. Right now, it’s slated to go down that path, but given the fact that there is no appointed leadership yet. In CMS, the staffers that we are dealing with are moving ahead with the caveat that when the leadership disappointed things could change and their resources be pull to other places, but right now we are headed down that path. Bob Hopkins - Banc of America-Merrill Lynch: Okay. So, would you care to put a probability on action this summer versus 2010?

No. Bob Hopkins - Banc of America-Merrill Lynch: One other thing on Highmark just to clarify; in the past has there been sort of an annual review process or is it just been semiannual or is there have been any consistency to the process in the past?

Yeah. The consistency to the process has been what I stated before. In that there is an ongoing relationship between Highmark and ourselves and frankly with CMS, but there is not a scheduled event. You have to remember that CardioNet is really the pioneer in this whole area of wireless medicine, and I think there has been this absolutely professional collaborative relationship between the payers and us on justifying and understanding the cost benefit of what we do. So, it's really, I can't say it one more time that it's just an ongoing and a very collaborative effort between the parties that are involved. Bob Hopkins - Banc of America-Merrill Lynch: And then last one for me, one back to Marty. Marty could you give us the bad debt expense this quarter and the last couple of quarters, so we can get a sense as to trend and right now our well point in United currently reimbursing for your procedure, your technology?

Well Bob, first I'll take the expense question. So, in the quarter, the bad debt expense that you'll find within G&A expense its $3.8 million or 10.7% of revenue. Actually, it compares to the fourth quarter of last year, which was $4.4 million or 12.7% of revenue. Bob Hopkins - Banc of America-Merrill Lynch: Sequentially, okay.

Reimbursement.

Yes right now, with both companies were in active review on the technical assessment, when we do receive referrals. We've been able to get Ad-hoc coverage from the authorization procedure and then we've moved forward with providing them with the MCOT system. Bob Hopkins - Banc of America-Merrill Lynch: And then sorry, one of the little one, it’s because I think this is important. Do you guys have evidenced that any of your insurers have turned down the competition for lack of data. Is that something that's happening in the marketplace or are the other insurance companies reimbursing for these guys despite the lack of data? Thank you.

And your next question will come from the line of Rick Wise with Leerink Swann. Please proceed. Rick Wise - Leerink Swann: Good afternoon everybody. Marty you highlighted that you expect and actually Randy too that you expect to complete the sales expansion by the middle of this year. It sounds like that's happening a little ahead of schedule, and maybe if you could help us sink through the dollars or as a percentage of sales, the impact that could have on the second quarter. Actually it makes it’s a tougher comp, but how do we think about the second half, do we take whatever that second quarter rate is and some of the dollar state is same in the second half. Can you help us think through those issues?

Well what happens is the sales expense does track up then from the first quarter to the second quarter. Okay and then you would see, Rick as that it pretty much holds at about that level in the third and fourth quarters in terms of the absolute dollars. Rick Wise - Leerink Swann: And so from that time on and maybe into 2010, we should expect to see some positive leverage on the SG&A line with SG&A growing slower than whatever your sales growth rate is?

We expect to see 2009 full year sales and marketing expense to be up over term as we've said that in the past. We do expect that you'd see that as a percentage of revenue coming down though in 2010 down 2000 levels we were at in 2008. Rick Wise - Leerink Swann: Turning to the Biotel, maybe talk a little bit about now you have adjust I think a little bit more, some of the potential there in terms of new technology and maybe more specifically Randy highlight some of the corporate initiatives. How quickly can you get that off the ground, and is that all reflected in your go forward guidance?

Yes. The Biotel acquisition, which we hope to close by mid year Rick, really there are several keys to the rationale that acquisition. One is of course, we believe they have the leading wireless event monitor in the industry today, and so when we add that to the CardioNet portfolio products, we think whether its at the Holter end of the business, the wireless event monitoring business, or certainly the MCOT will by-far have the most competitive range of products in the industry. So that’s going to be a real we think stimulus to our sales presentation and of course the wireless event introduces many physicians for the first time to wireless technology and we think that will accelerate the conversion from event MCOT. So we are very excited about that. The second aspect of the acquisition of Biotel is some of the research and development efforts they've made both on the hardware and the software and the algorithm design side of the business that we will be incorporating into our next generation MCOT system, next generation being the next system introduced beyond our current C3 system. The third dimension of the Biotel acquisition relates to the clinical research services business known as Agility within Biotel. Agility currently sells to medical device companies during clinical trials for device development. We have thought for a long time here that the MCOT technology as it currently exist and more importantly as it will evolve in the next generation is ideally suited to contract clinical research services for both device and drug companies during product development. So agility really gives us a bit of a jumpstart on that since they have an existing business in that space. We will be adding additional resource to the Agility business, the second half of this year to accelerate their sales and marketing efforts to device and drug companies. Concurrent with that, we know that the MCOT platform will have to go through some enhancements to offer some more specific applications to make us really competitive in the cardiac safety space of the business, which I know you are aware Rick is a very attractive business to be in. So, in order of magnitude I think this business with our added resource into it will begin to pick up momentum going into 2010, but then I would expect given the way that we integrate the development there will be an inflection point, 18 to 24 months down the road or we would see accelerated growth in this business. You will certainly recall that we started a similar business at VIASYS is called VIASYS Clinical Services, which leveraged our infrastructure much in the same way that we expect agility to do at CardioNet. And that business in five short years went from zero revenue to $40 million to $50 million of revenue. And I understand today its being about two years since it was sold, doing about a $100 million a year on a run rate basis. So, we have experience in this space. Done properly it can be a very attractive business. The margins in that business probably are a bit accretive to our current margins and so we are very excited about. And then lastly, with respect to Biotel with that acquisition they bring to us manufacturing capacity and given rates of growth in CardioNet that manufacturing capacity is an asset as well. Rick Wise - Leerink Swann: You talked about the DSOs and the bad debt, Marty or Randy, where should we think DSOs can go by the end of this year and bad debt, the DSOs get back below 100 as bad debt get cut in half from here?

Yes, so, Rick, I’ll take that one. The DSO we have said in the past and still our belief that by the end of the year with the efforts ongoing there, we should be down somewhere in the 80s we would say. So, its certainly off the 100 days mark. And then, as far as the bad debt expense, we do see it in 2009 this year on a full year basis being in about the 9% somewhere in the ballpark, with more dramatic reduction in 2010. The initiatives as we’ve said as my prepared comment said, we’ll take some time to take effect. And clearly, we know we do think we can get the bad debt expense now, some I’m significantly over the two year period. Rick Wise - Leerink Swann: And just a last one -- just any updates on the competitive front, we welcome. We have been hearing that Lifewatches launched in newer generation free channel devise. Just may be your thoughts on how this might impact beat if at all. Thanks a lot.

Let me start first and I am going to just back up a little bit on all competitive front and readdress question that Bob Hawkins from BOA asked. Without question we win business today, because of the tremendous success of our clinical research. As I mentioned before, we have had published studies or abstract in 21 areas that range from efficacy, Catheter ablation, surgical ablation, rhythm control, cryptogenic stroke et cetera No one else has done that. We are selling to some of the smartest people in the medical industry, cardiologist and electrophysiologist, and so the answer certainly is yes, a majority of the time that we are selling to a new physician practice, that clinical research is overwhelmingly important, but I like to add a more specific example. A week ago, I was visiting with the leading cardiologist for one of the major healthcare institutes in America. When I sat down with him, the first thing he brought up when he joined this institute recently and found that they were using competitive technology. In his own words, he was outraged that they weren't using CardioNet, because the competitor had no clinical support for their claims whatsoever. And so, I think I can say with a high degree of probability that we will be winning CardioNet will be moving into that account in the very near future. And people like Anna who run our Clinical Research Organization and myself, personally make those kinds of -- build those kind of relationships, because this clinical research which Anna has really led is so compelling that any institute or any physician and in fact the payers really, really respect. Anna?

The device in the new one that was brought out by Lifewatch, has additional features and because it has additional features, the question is, it still always gets back to what is the research that show these things work. And I think that's the edge that CardioNet has in all of this.

And your next question will come from the line of Matt Dolan with Roth Capital. Please proceed. Matt Dolan - Roth Capital: Couple of follow-ups really, first on the sales force productivity, as you look at this new class of reps and considering that you are filtering through on about a 10:1 ratio, it sounds like you are getting a high quality group. Can you give some early feedback on how they might be tracking here in the early days relative to your prior additions and given your rapid hiring here in Q1, should we expect from a trajectory standpoint back half of the year to show an acceleration from this class in terms of revenue?

Okay, Matt. We're just entering the second quarter I think we hired relative to the 41 number relatively small number in the first quarter, so it's all anecdotal now. But I can tell you that I was meeting with the sales leadership this week. To give you an example in Houston, where we hired a new more experienced rep. The turnaround in that territory they sad was almost instantaneous. So a lot of these experienced reps that we're hiring. We're hiring them all within there existing geography. So they have a high level of experience with the cardiologists and the electrophysiologists, as well as the hospital in their geography. They have great relationship. So we think they are hitting the ground pretty quickly. We can't quantify that yet, because it's too early in the game. We just completed a sales training class this week. I think all of us in this room including myself were instructors then and again it's qualitative at this stage. But these are some high caliber people. So in terms of trajectory on the second half as you ask Matt, we think that it could be a positive trajectory from what we've planned, but it's just too early to even speculate. Matt Dolan - Roth Capital: Okay. I'm very good. And then on the reimbursement side how do you expect the 2010 reimbursement side, one question there, how do you expect the 2010 reimbursement rate to be determine from a I guess a timing standpoint maybe walk us through how that could possibly be disseminated if that something you can put together at this point?

This is Phil. If CMS goes through the process of nationally pricing the code for 2010 and beyond, we would go through that over the summer months and that information would be made public by CMS in the final rule for 2009, which would come out at the end of the October, beginning of November. It’s an annual process, and then that’s how it will be disseminated. Matt Dolan - Roth Capital: And through Highmark?

Its business as usual. The process that we go through this time every year. Matt Dolan - Roth Capital: Just on the Biotel side, when that deal closes, it looks like that was about a $12 million business last year. I know they sold to some competitors. How should we think about that in terms of revenue contribution, once integrated and maybe for Anna, do you foresee this? How do you foresee the timing of this integration and really the potential to add this service to your platform?

Yes Matt, so this is Marty. So as far as, what we're modeling going forward, should the deal occur is we're looking at the same historical as you are. And freaking the numbers down a bit, because of the elements where the competitors foreseeing product. But, then there is the opportunity then to grow the wireless event monitor. I think we are already at the stage to give you specific numbers. Once the deal close then we will be to talk to that more. So, but we have a wireless, event monitor and then obviously the clinical research piece.

And your next question will come from the line of Alan Fishman with Thomas Weisel Partners. Alan Fishman - Thomas Weisel Partners: My first question, I guess right now you have 129 sales reps. What was the average number in the quarter for modeling purpose?

The average for the quarter was 101 reps. Alan Fishman - Thomas Weisel Partners: 101. Okay, thank you, and then my second question is. In the fourth quarter, you changed the amortizable life of the C3 device from three to five years. Can you quantify the impact of that on gross margin year-over-year comparison in the first quarter?

Before the 430 basis point improvement, there is about a 100 basis points due that change going from the two years to the three years. Alan Fishman - Thomas Weisel Partners: Two to three years, thanks. My mistake.

And you next question will come from the line of [Kay McKee] analyst with Colin Stewart

Couple of questions about the Biotel acquisition. And specifically the Agility group, how many folks are in that group and how many would you expect to add?

Today in the agility group. There are only about seven or eight people there including those who sell and those who provide the support services. My expectation is that this year we will add another six to eight people, some directed towards selling to the device in the pharmaceutical industry, the rest would be adding additional infrastructure support. Agility is based in Chicago, so they have servers and computers for the data management for the services they sell. So, in order of magnitude we will about double the organization this year from, if you will, seven or eight to fourteen to sixteen.

As you move into supporting the clinical trials, especially on the pharma side. I assume you're talking about thorough QT studies and if so, what would you bring to the table in order to compete effectively against say any research?

We’re not really looking at thorough QT studies initially. Initially, we'll be looking at later phase trials and not only for the QT’s but also for arrhythmia.

Okay very good. And then just a final question, where would you estimate your market share is currently versus Lifewatch?

We all tend to close this [swaps and solvent] number of $2 billion. We are on a run rate this year, we think to do about $170 million, so that would put us where about 8 to 9% of the total market. I don't know what any competitors run rate would be for this year. So, you could probably take a look at there anybody's forecast against that 2 billion and estimate their share of the market.

And your next question will come from the line of Glenn Novarro with RBC Capital Markets. Please proceed. Michael Hunt - Barclays Capital: Yes it's Michael Hunt from Barclays Capital. One question, have you seen any indication that the MCOT technical fee is currently under review at Highmark?

Okay where you on the call earlier? Michael Hunt - Barclays Capital: Yes.

Yes okay, I think we pretty much covered, exhausted that. [Tania].

Your next question will come from the line of Milan Gupta with South Point Capital. Please proceed. Milan Gupta - South Point Capital: Can you guys say different question on reimbursement as percent of your peers, how many are reimbursing the positions on a case rate basis versus a daily rate?

As we migrate to the new CPT Code, it becomes less and less, but prior to the Code virtually all payers paid them on it other than medicare on a per day basis and throughout 2009 as the payers implement the new Code into their system, it'll decrease and we anticipate everyone being on the case rate payment by the end of the year. Milan Gupta - South Point Capital: Do you know where it stands right now as a rough mix?

I can speak on this, the technical side, we have transitioned roughly 22% of our contract over to the new code with many more pending for the next quarter. Milan Gupta - South Point Capital: Got you. And then how often are the actual costs, like you guys say you furnished Highmark with your cost information and in terms of capital costs being with that. How often are those data exchange?

Well, there is no calendar for when that happens. We have this ongoing dialogue with both Highmark and CMS and that whenever they want to engage in discussion on the cost structure of the CardioNet technology, we provide the information. They are essentially as up to date on our cost infrastructures, as we are. So that could happen at any given point in time, but it's really an ongoing process. There is no calendar event that dictates when that information is provided or even request.

There are no further questions at this time. I will now like to turn the call back over to Mr. Randy Thurman for closing remarks.

Well, thank you very much and thank all of you for participating in today's call. As you can see by not only the financial results of CardioNet year-to-date, but also the substantial progress that we've made on a lot of fronts, whether it's the hiring of the sales professionals or clinical research or the pending announcements at the Heart Rhythm Society, your company is doing extraordinarily well. People here are really focused on the near-term execution of all of our goals and objectives, as well as the very exciting long-term opportunity for CardioNet. So thank you very much. We look forward to speaking with you at the end of the second quarter.

If you joined the conference late today, you may listen to the conference on digital replay, which will be available from April 30 to May 7, 2009 on 888-286-8010 or 617-801-6888 with the pass code 80739901. You may disconnect. Have a great day.