Healthcare Industry News:  Arrow International 

Devices Distribution Acquisitions

 News Release - April 27, 2006

Arrow International Announces Purchase of Certain Assets of Its United Kingdom Distributor

READING, Pa., April 27 (HSMN NewsFeed) -- Arrow International, Inc. (Nasdaq: ARRO ) announced today that it has purchased certain assets of its United Kingdom (UK) distributor, Kimal PLC (Kimal), for a purchase price of up to approximately $9.0 million to strengthen its position in the UK and Ireland markets. The transaction included the acquisition of distributorship rights and customer lists, as well as the inventory and specified contracts associated with Kimal's sale of the Company's products in the UK and Ireland. For more than 27 years, Kimal has been one of the Company's flagship distributors in Europe, most recently having responsibility for the UK, Ireland and Middle East territories.

In connection with this transaction, the Company also entered into a multi-year service agreement with Kimal that provides for the continuation of current levels of customer service and logistical support to the Company's UK and Ireland customers. Key personnel from Kimal's critical care sales organization have been transferred to the Company's newly created Arrow International UK Limited (Arrow UK). Distribution of the Company's products in the Middle East will continue to be handled by Kimal, in close cooperation with Arrow UK as well as Arrow's European organization.

Arrow's Chairman and CEO, Carl G. Anderson Jr., stated that, "Arrow has had an excellent relationship with Kimal for many years and anticipates continuing to work together with Kimal under the terms of the agreement to identify opportunities to provide customers with high-quality, cost-effective medical devices in the future. Strategically, we have been increasing the proportion of our sales that are sold directly by Arrow in both the U.S. and internationally, and we have acquired four of our larger distributors over the last four years."

Arrow's total sales to Kimal for fiscal year 2005 were $8.4M of which approximately $4.8M were related to the UK and Ireland markets. The Company anticipates that this acquisition will increase sales by approximately $2.0M for the fiscal year ending August 31, 2006. Diluted earnings per share for the quarter ending May 31, 2006 will be reduced by approximately $0.01 as a result of the recognition of the inventory step-up associated with the transaction.

Company Information

Arrow International, Inc. develops, manufactures and markets a broad range of clinically advanced, disposable catheters and related products for critical and cardiac care. The Company's products are used primarily by anesthesiologists, critical care specialists, surgeons, emergency and trauma physicians, cardiologists, interventional radiologists, electrophysiologists, and other health care providers.

Arrow International's news releases and other company information can be found on its website at

The Company's common stock trades on the Nasdaq National MarketŪ under the symbol ARRO.

Safe Harbor Statement

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This news release provides historical information and includes forward-looking statements (including projections). Although the Company believes that the expectations in such forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to have been correct. The forward-looking statements are based upon a number of assumptions and estimates that, while presented with numerical specificity and considered reasonable by the Company, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies which are beyond the control of the Company, and upon assumptions with respect to future business decisions which are subject to change. Accordingly, the forward-looking statements are only an estimate, and actual results will vary from the forward-looking statements, and these variations may be material. Consequently, the inclusion of the forward- looking statements should not be regarded as a representation by the Company of results that actually will be achieved. Forward-looking statements are necessarily speculative in nature, and it is usually the case that one or more of the assumptions in the forward-looking statements do not materialize. Investors are cautioned not to place undue reliance on the forward-looking statements. In connection with the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company cautions the reader that, among others, the factors below, which are discussed in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2005 and in its other filings with the Securities and Exchange Commission, could cause the Company's results to differ materially from those stated in the forward- looking statements. These factors include: (i) stringent regulation of the Company's products by the US Food and Drug Administration and, in some jurisdictions, by state, local and foreign governmental authorities; (ii) the highly competitive market for medical devices and the rapid pace of product development and technological change in this market; (iii) pressures imposed by the health care industry to reduce the cost or usage of medical products and services; (iv) dependence on patents and proprietary rights to protect the Company's trade secrets and technology, and the need for litigation to enforce or defend these rights; (v) risks associated with the Company's international operations; (vi) potential product liability risks inherent in the design, manufacture and marketing of medical devices; (vii) risks relating to interruptions in the supply of or increases in the price of essential raw materials or components; (viii) risks associated with the Company's use of derivative financial instruments; and (ix) dependence on the continued service of key members of the Company's management.

Source: Arrow International

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