CYBERONICS ANNOUNCES HOLD ON SHIPMENT AND RETRIEVAL OF INVENTORY OF AspireHC™ AND AspireSR™ GENERATORS

For Release Monday, August 15, 2011; 8:00 AM ET

CYBERONICS ANNOUNCES HOLD ON SHIPMENT AND RETRIEVAL OF INVENTORY OF AspireHC™ AND AspireSR™ GENERATORS

COMPANY AFFIRMS FINANCIAL GUIDANCE FOR FISCAL 2012

HOUSTON, Texas August 15, 2011 -- Cyberonics, Inc. (NASDAQ:CYBX), a global leader in devices for epilepsy management, announced today that it has voluntarily stopped shipment and is retrieving field inventory of its Aspire platform generators, Models 105 and 106.  The company does not believe that the generators pose a health risk to patients, but initiated this action when it discovered that stimulation output current delivered to patients can be less than the output current programmed by a physician.  Instructions will be provided to physicians regarding management of the approximately 118 patients worldwide who have been implanted with an AspireHC or AspireSR generator.  Cyberonics has also suspended enrollment in its E-36 clinical trial pending resolution of this hardware-related design issue.

“Patient safety is our first priority.  We are working expeditiously to resolve this problem.  Our product development team has identified what we believe to be the cause of the problem, as well as several potential hardware solutions,” said Dan Moore, President and Chief Executive Officer.  “Our goal is to implement and validate a solution and submit for regulatory approvals by no later than the end of the fiscal year.”

The company, which completed the first quarter of fiscal 2012 on July 29, 2011 and will report financial results on August 25, 2011, does not currently anticipate a change to guidance for fiscal year 2012 as a result of this action. The previously provided guidance remains at $212 million to $215 million for net sales, and $54 million to $57 million for income from operations.  Sales for the AspireHC (Model 105) generator comprised approximately 9% of worldwide revenue in the recently completed first quarter, and the company believes that the availability of alternate models provides physicians and patients with appropriate additional options for the treatment of refractory epilepsy.

About Cyberonics, Inc. and the VNS Therapy^® System

Cyberonics, Inc. is a medical technology company with core expertise in neuromodulation.  The company developed and markets the VNS Therapy System, which is FDA-approved for the treatment of refractory epilepsy and treatment-resistant depression.  The VNS Therapy System uses a surgically implanted medical device that delivers electrical pulsed signals to the vagus nerve.  Cyberonics markets the VNS Therapy System in selected markets worldwide.

Additional information on Cyberonics and the VNS Therapy System is available at www.cyberonics.com.