Good afternoon. Thank you for joining us for the CardioNet fourth quarter and full year 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 such 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 in detail in our public filings with 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 open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host for today, Mr. Randy Thurman. Sir, you may begin.

Thank you very much and welcome to the Cardionet fourth quarter and yearend investor conference call. I am Randy Thurman, Executive Chairman of CardioNet. With me this afternoon is Marty Galvan, Senior Vice President and Chief Financial Officer and Anna McNamara, Senior Vice President of Clinical Operations and Phil Leone, Vice President of Managed Care. In addition to providing detail on 2008 and 2009, our objective today is to outline for you the opportunity that we believe CardioNet has to gain significant share in the $2 billion cardiac monitoring market and how we plan to leverage that opportunity for the benefit of all of our stakeholders. As outlined in the press release issued earlier today, we see 2009 as a transformational year for building this market share through a series of operational and strategic initiatives that will strengthen our sales and marketing effort, enhance our infrastructure, and position CardioNet for higher growth in 2010 and beyond. These operational and strategic initiatives will benefit all CardioNet's stakeholders and we believe will drive long-term shareholder value. We are pleased to report fourth quarter and full year revenue growth of 44% and 65% respectively. Gross margin increased to 69.4% in the quarter and expanded 190 basis points or 66.9% for the full year. Our adjusted operating margin increased 18.9% in the quarter leading to diluted earnings per share of $0.35. For the full year, our adjusted operating margin grew from breakeven in the prior year over 12% of sales contributing to full year diluted earnings per share of $0.59. Both quarterly and full year earnings exceed consensus expectation. Marty of course will provide you with a more detailed financial review in his remarks. We firmly believe that our strong financial and operational performance in 2008 is indicative of the true potential of our…

Thank you, Randy and good afternoon everyone. Now that Randy has provided a review of 2008 and our expectations for 2009, I will review our financial result for the fourth quarter and full year 2008 and the factors that contributed to this result. I want to remind everyone that unless mentioned otherwise, all of my comments refer to financial result on a non-GAAP basis. There is the reconciliation included in the press release that we issued earlier today that describes in detail how we have calculated this non-GAAP figures. In the fourth quarter, revenue increased by 43.8%% to $34.4 million compared to $23.9 million in the fourth quarter of 2007. Driving the growth were CardioNet system sales of $29.5 million, up from $18.4 million in Q4 of 2007, or an increase of 60%. Revenue from the CardioNet system continues to grow as the percent of revenue representing 86% of revenue in the fourth quarter compared to 84% in the third quarter of 2008 and 77% of revenue in the fourth quarter of last year, offsetting this growth or declines in events in Holter revenue as we continue to convert physicians to the new technology. During the quarter, approximately 6% of our referrals were due to PDSHeart conversion, an increase over the prior quarters which continues to provide validation of the acquisition. With the integration of the sales forces and the continued growth over the two years since the acquisition, we no longer differentiate between CardioNet and PDS sales efforts. Therefore, it is not our intention to continue reporting conversions. With respect to full year, revenue grew 65% to $120.5 million. If you adjust the prior year as if the PDSHeart acquisition was completed as of January 1 of 2007, revenue increased by 56.3%. During the same period, CardioNet system revenue…

Thank you, Marty. Before turning the call over to questions, I would like to comment specifically on three areas of importance; reimbursement clinical programs and the economic environment in which we compete. We made significant strides in 2008 to improve the reimbursement environment for the CardioNet system and believe the outlook for additional coverage is very promising. In October, we received Category 1 CPT Codes and Reimbursement Rates for the professional and technical component of the CardioNet system. This reimbursement codes provide strong validation of our technology, remove major obstacles for commercial payers and establish a simplified and stable reimbursement environment. Looking to 2009, this coverage enhances our ability to attract new physicians and payers while also increasing business with existing customers. Also related to reimbursement during 2008, we secured payer contracts with two major commercial payers Aetna and Humana and more than 30 smaller providers. CardioNet now has contracts covering more than 190 million lives. They are highly focused on securing contracts with the remaining major payers to further improve our coverage. Another area that has been and that will continue to be the key to our success is clinical programs. CardioNet supports independent clinical trials that utilize the CardioNet system as a diagnostic tool. We also initiate clinical trials that are designed specifically to demonstrate the superiority and advantages of utilizing our system in place of existing technologies or a noble indication. The first approach allows us to support the academic investigations of leading researchers or the commercial efforts of drug development company providing strong validation of our product and of CardioNet's leadership position in cardiac monitoring. The second approach allows us to focus on demonstrating the benefit of our system to patients, physicians and payers to clinically validate its superior outcomes and reduction of cost versus alternatives.…

(Operator instructions) Your first question comes from the line of Amit Bhalla - Citigroup.

My questions are going to be around the guidance both the longer term and the near term. Starting with the long term guidance, I appreciate that market share is going to be the key driver for you to reach the 2010 and 2011 goals, but I was wondering what kind of assumptions do you have built-in in terms of acquisitions that may help get to those goals if there are any assumptions for acquisition as well as your assumptions on competitive new entrants and sales force for the long term. I will start there.

With respect to acquisitions, there are no assumptions in that outlook with respect to acquisition. So any acquisition that we did would have to stand on their own merits in terms of contribution to earnings. With respect to competition, our assumptions there are that the field in which we compete will have currently the existing players that are in the market, some of which are moving in the wireless and that in the timeframe between now and 2011, there is certainly could be a new competitor but of course we are very well, we are very knowledgeable within CardioNet in terms of the infrastructure required to really satisfy the needs of our physician customers and the patients that we serve. The important point with respect to competition though refers back to the investment priorities that we have set this year. It is my view that in the future, our competitive position as the leader is going to be most secured by being viewed as our, by our physician customers and the patients we serve as the unquestioned quality leader in the industry. So that is why we are investing and as I commented in my remark, and IT infrastructure to support the growth of our business, the highest quality customer service and monitoring operation and in developing our professional sales organization to be sure that they are the most capable in our field of endeavor. So the real question is not whether there will be competition or increase competition but it really comes back to an additional rationale for why we are investing substantive ways behind our Company in 2009.

And also in terms of your sales force in the out years, your thoughts there?

Sales force in the out years, as we looked to 2010, I think the key going out of 2009 will be to see what kind of penetration that we have on a nationwide basis. Some of the new adjacent markets that we are entering where we are going to put some additional reps this year and I think we are going to go out of 2009 with a pretty full complement in our sales organization for nationwide coverage but right now in our 2010 outlook, we have got approximately an additional 20 reps built into that, so a number that is very manageable for us.

And if I can ask you a question on the near-term outlook for 2009, maybe Marty could you talk a little bit about how the leverage on your bad debt expense is going to take place through out the year and if you could just provide us with where you ended 2008 in terms of sales force, and I will stop there. Thanks.

We ended 2008, the sales force with 88 individuals and as Randy said, we see ourselves going up to 148 exiting 2009. As far as the bad debt expense, we see that rushing down somewhat in 2009. We finished the year, 2008, with bad debt about 20% of revenue and we are expecting 2009 to bring that down 200 or 300 basis points. As we have said before, we think the more significant leverage in bad debt will come likely in 2010 because the efforts we are undertaking now to improve that profile in terms of collections that will be more so, you will see that more manifested result in our 2010 bad debt percentage.

Your next question comes from the line of Rick Wise - Leerink Swann.

This is Danielle, in for Rick. Quick question on the CPT Code, have you seen, I know it is just been implemented at the start of this year but have you seen any dark reaction to the new reimbursement code and could you give any concrete examples as to how that could be changing referral pattern?

It is a great question, Danielle and we have with us this afternoon one of our really exceptional contributors to the Company in last couple of years, Phil Leone, who runs our managed care operations and I am going to ask Phil to give his perspective on your question.

You made a good point that it is early on and so we are seeing it in the Medicare system that adopted the code effective January 1 that the physicians have accepted it. It allows them to bill electronically a lot easier than they had in the past predominantly for the Medicare population we build with, the traditions build with a 93799 and a description and it was laborious for them on the payment. So this actually helps them tremendously. On the commercial side, they are just starting to migrate into that code. We have had some conversations as it relates to MCOT. We are hearing from the field that some of the payers are moving there but more so towards the later part of Q1 and into Q2. So, early indications are it is going well. The code is going well.

So again I think the key there, Danielle, so far so good but it is early on and obviously as we move to every quarter, we will have better and better field quarter but so far, so good. It should facilitate increase utilization of CardioNet system.

Okay, great and then if I could ask one more question on the product pipeline. I know you are just rolling out your C3 to, nearing the end of that. What is coming behind that? I noticed in the press release you said you launch the Afib application. Is that in full launch now and anything else coming behind that to improve the products further?

Well, that sounded like about three questions which is fair. We do have a product pipeline beyond the Afib which we recently introduced and as we have said, it is our intention to continue to introduce enhancements in new application for competitive reasons. We are not going to get more specific about that but we have seen tremendous results and positive feedback from our Afib introduction. Anna is here who runs our clinical operations. Do you want to provide a little bit more specificity to what I have said, Anna?

I think that essentially covers, I mean our pipeline had some [burst] things in it so we would probably do not want to share it at this time.

Right but bottom line, Danielle expect a regular introduction of new products and applications that will be viewed by the physicians, customers, a further indications of CardioNet's leadership.

Okay and I am sorry, I may have missed this, do you expect regular introductions annually, biannually, can you say?

We would think that there will be more than one or two introductions of new products or applications per year.

Your next question comes from the line of George Dai - M.A. Weatherbie.

First question is for Marty. Marty, you talked about the accounts receivable has not come down and you offered a good explanation. I was just trying to understand, what is the payment term from CMS and also what is the payment term from the commercial side?

Yes, from CMS, we are collecting in the 30- to 60-day range. That is the standard that we are collecting under. It is a big longer on the commercial side and what we have done now, George, is because of the aging that we are seeing, the preparations as we record it, as I have mentioned in the call, this will become a key priority for the organization going forward here.

I see, now, when you see the expansion of the AR, where do you mainly see the elongation from? Is that maybe from the CMS side or is it maybe from the commercial side?

It is not the CMS side, George. It is from the commercial side and really the comment I would make is to put folks at ease here that it is not an issue of not being able to collect the money. What we have seen in the last couple of quarters now is directly related to the physical effort of people getting on the phone and calling people for the most part. So it is chasing down receivables like what happens in any other company. I must admit I have been through this experience before and it requires a specific focus and that is what we are committed to do.

I see. Does that really change the bad debt expense assumption with the longer DSO?

Well in terms of going forward, yes we bring in more cash. It is only going to reduce the amount that we have to provide for bad debt because many of you would know; we do that provision for bad debt based on the aging of receivable for the most part as what happens in any company essentially. So we are looking at our receivables. We spend more time passes from the date of invoice to the amount of time that we still have not collected it. That drives the higher bad debt expense.

Great. The follow up question is regarding the market size. Are you guys, in your presentation as well as in today's conference call, talked about the $2 billion opportunity that is based on $1.4 million event monitors per year plus the 40 to 50 usage charge so that gives you about $2 billion. I am just wondering, could you share with us the source of your $1.4 million annual event monitor usage?

George that comes right out of the Frost & Sullivan report from I think about, from last year in fact. But I doubt I tell you the page number, I forget it.

Is that third-party validated and it confirms the number?

Well, as far as consulting, yes so within healthcare as you might know. Frost & Sullivan is one of the main leaders in terms of this work or studies, probably in the national standard.

They are the third-party validator of this kind of information.

(Operator's instruction) Your next question comes from the line of Alan Fishman - Thomas Weisel Partners.

My first question is simply to number. You said that there were 88 sales reps average in 4Q or that is what you exited in that?

No, that is what we exited in that.

Is there an average number you can provide?

Average we will tell you is 85 for the year.

Eighty five for the year, okay.

You have a follow up question from the line of Amit Bhalla - Ciitgroup.

Follow up in regard to the CEO search, any progress there and any other management level departures made the CEO change?

Yes the first, there have been no other management departures since the change earlier this month and none other expected. With regard to the CEO search, we have been really inundated with people who have expressed an interest in leading CardioNet and as you can imagine, this is an extraordinarily a track of opportunity to some of the very best people in the medtech industry. As you know, I have committed to remaining as the interim CEO until we find somebody better to do the job and since we have only been active really last three or four weeks, there is nothing more specific to report than that.

As I show no further question, I would like to turn the call back over to management for any closing remarks. Please proceed.

Well again, I would like to conclude by saying that 2008 was a year of great accomplishment by the management team here at CardioNet. Some of them you have been introduced to on the telephone today like Anna McNamara and Phil Leone. There are some really other extremely talented people here who really have embraced the technology that our founder created that really demonstrated terrific ability to commercialize this technology. As I said in my concluding remarks, what most excites me about the future of CardioNet is that we are truly I think in the middle of a conversion of a potential revolution in healthcare that not only incorporate a lot of the dynamic of cost benefit in healthcare today but also the intersection of information technology and the ascending dynamics as I called it in wireless medicine. There are few companies today, I think, in any industry that have the kind of potential that CardioNet has. Though we are all extraordinarily pleased with the performance of our people in 2008, we believe 2009 is going to be another year of equal achievement and beyond that, our potentials are unlimited. Thank you all very much for attending the CardioNet call and we look forward to speaking with you in the future.

If you joined the conference late today, you may listen to the conference on digital replay which will be available from February 17 to February 24, 2009 on dial-in number 888-286-8010 or internationally, 617-801-6888. You may listen under pass code 56293026. Thank you for your participation in today's conference. That does conclude the presentation. You may disconnect. Have a wonderful day.