ALARIS Medical Indicates Fourth Quarter Sales are On Track; Updates Outlook for 2002.

Business Editors & Health/Medical Writers

SAN DIEGO--(BW HealthWire)--Jan. 14, 2002

ALARIS Medical, Inc. (AMEX:AMI) said today that it anticipates that sales for its fourth quarter ended December 31, 2001 will be approximately $111 million to $112 million. The Adjusted EBITDA estimate for the quarter continues to be $23 million to $25 million. These results, which represent approximately 9% sales growth compared with the fourth quarter of 2000, are consistent with the Company's previously announced expectations for the quarter and full year. Full year 2001 sales are currently anticipated to be $412 million to $413 million and Adjusted EBITDA is currently expected to be $82 million to $84 million.

2002 Outlook

For full year 2002, the Company is currently forecasting sales to grow at approximately 9% versus 2001 and Adjusted EBITDA to grow slightly faster. Full year 2002 Adjusted EBITDA is forecasted to be approximately $90 million. Achievement of such forecasted levels of sales and Adjusted EBITDA is anticipated to result in earnings per share of around $.05 for the full year. Full year 2002 net income will include a benefit compared with 2001 of approximately $6 million due to the required adoption of a new accounting standard that eliminates the amortization of goodwill.

The outlook for the first quarter of 2002 is for sales growth of approximately 4% over the first quarter of 2001. North American sales are anticipated to grow about 7%, while the Company currently is forecasting international sales for the first quarter of 2002 to be essentially the same as the first quarter 2001 sales. The Company's operating results for the first quarter of 2001 were favorably impacted by a 16% increase in international sales, primarily in the U.K. Additionally, the Company anticipates an increase in first quarter selling and marketing expense of approximately 15% to 20% over first quarter 2001. This increase is primarily related to the selling and marketing activities to support the recently announced North America launch of the MEDLEY(TM) Medication Safety System. This increased spending should result in first quarter Adjusted EBITDA at or slightly below the same quarter in 2001. It is also anticipated that the Company will report a small net loss for the first quarter.

For the full year, North American sales for 2002 are forecasted to grow approximately 9% to 10% over 2001. This growth is expected to be driven by sales of the MEDLEY Medication Safety System. The MEDLEY System was released to the North American market in December 2001 at the American Society of Healthcare Systems Pharmacists' meeting in New Orleans. The MEDLEY System includes the Company's proprietary Guardrails(TM) Safety Software. This software alerts the bedside caregiver if the dose, rate or volume of an intravenous therapy falls outside pre-established ranges. This software is configurable to reflect the hospital's best practice guidelines for the administration of IV therapies.

International sales are expected to grow at 7% to 8% during 2002 driven by increased sales volume of disposable administration sets for use with the Company's growing installed base of pumps.

The Company currently anticipates sequential sales growth in each quarter for 2002, with fourth quarter sales growth of more than 10% compared with 2001. Adjusted EBITDA is anticipated to grow each sequential quarter of the year with approximately one-third of the estimated full year EBITDA being generated in the fourth quarter. As a result, earnings per share are anticipated to be near break-even in the second and third quarters, and in the $.05 to $.09 range for the fourth quarter.

ALARIS Medical, Inc., through its wholly owned operating company, ALARIS Medical Systems, Inc., is a leading developer, manufacturer and provider of integrated intravenous infusion therapy and patient monitoring instruments and related disposables, accessories and services. ALARIS Medical's primary brands, ALARIS(R), IMED(R) and IVAC(R), are recognized throughout the world. ALARIS Medical's products are distributed in more than 120 countries worldwide. In addition to its San Diego world headquarters and manufacturing facility, ALARIS Medical also operates manufacturing facilities in Creedmoor, N.C.; Basingstoke, U.K.; and Tijuana, Mexico. Additional information on ALARIS Medical can be found at http://www.alarismed.com/.

This news release contains forward-looking statements as defined in the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Persons reading this release are cautioned that such forward-looking statements involve risks and uncertainties, including the effect of legislative and regulatory changes affecting the health care industry, the potential of increased levels of competition, technological changes, the dependence of ALARIS Medical upon the success of new products (including its proprietary Guardrails(TM) Safety Software and the MEDLEY(TM) Medication Safety System) and ongoing research and development efforts including obtaining regulatory approvals, restrictions contained in the instruments governing the Company's indebtedness, and the significant leverage to which the Company is subject. Such risk factors are detailed in the Securities and Exchange Commission filings of ALARIS Medical, Inc. and ALARIS Medical Systems, Inc., including Forms 10-K for the year ended December 31, 2000, and other filings. The Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments.