BEI Medical Systems Company Reports Fiscal 2000 Year-End and Fourth Quarter Results.

Business Editors

TETERBORO, N.J.--(BUSINESS WIRE)--Dec. 29, 2000

BEI Medical Systems Company, Inc. (NASDAQ: BMED), a development-stage company specializing in gynecology, reported revenues for the fiscal year ended September 30, 2000, of $1,375,000 compared with fiscal year 1999 revenues of $8,419,000.

The net loss for the year was $2,947,000, or $0.39 per share, compared with $6,909,000, or $0.92 per share, in fiscal year 1999, according to Richard W. Turner, president and chief executive officer.

Turner commented, "The results for the 2000 fiscal year reflect the sale of certain product lines to CooperSurgical in December 1999. The sale involved product lines utilized by gynecologists and a product line used by gastroenterologists that together accounted for 96.8 percent of the company's revenues in fiscal year 1999. International revenues from shipments to distributors of the company's Hydro ThermAblator(R) (HTA(R)) system for endometrial ablation were $191,000 and $269,000 for the fiscal years 2000 and 1999, respectively. The fiscal year 2000 revenues were principally generated by shipments of disposable kits, which are used each time the procedure is performed, and the fiscal year 1999 revenues were principally generated by shipments of the control unit to international distributors, primarily for use in clinical demonstrations and symposia."

FOURTH QUARTER RESULTS

Revenues for the fiscal fourth quarter ended September 30, 2000, were $62,000 versus $1,907,000 in the comparable period of fiscal 1999. The net loss was $727,000, or $0.10 per share, compared with a net loss of $2,018,000, or $0.27 per share, in the fourth quarter of the prior year.

During the quarter, the company completed the collection and analysis of the twelve-month patient follow-up data that was submitted to the Food and Drug Administration (FDA) in September 2000 as part of the company's modular submission to the FDA for authorization to market the Hydro ThermAblator as an alternative treatment to hysterectomy for women suffering from excessive uterine bleeding.

Clinical trial results were first reported at the Annual Meeting of FIGO World Congress of Gynecology and Obstetrics in September 2000. As announced by Dr. Franklin Loffer, a leading gynecologist and a participant in the HTA clinical trial, the HTA produced an average 84.8 percent reduction in uterine bleeding among the 167 women treated with the HTA and followed for 12 months, with 40 percent of the patients having their menstrual bleeding completely eliminated by the HTA treatment. The average HTA treatment time was 26.4 minutes, which was less than required for roller-ball treatments in the study.

Turner added, "The company believes that the clinical trial results submitted to the FDA demonstrate that the HTA is both safe and effective and provides substantial evidence that the HTA therapy has equivalent safety and efficacy as compared to the roller-ball technique in the treatment of menorrhagia from benign causes. Management is currently working with the FDA as required to facilitate the review of the PMA application and we continue to anticipate approval in early calendar 2001."

BEI Medical Systems Company, Inc., is a development-stage company focused on gynecology. The company has completed clinical trials and is awaiting marketing approval from the FDA for its sole product, the Hydro ThermAblator, or HTA, a proprietary system that is intended to treat menorrhagia, or excessive uterine bleeding. BEI Medical Systems(R), Hydro ThermAblator(R) and HTA(R) are registered trademarks of BEI Medical Systems Company, Inc., in the United States and certain foreign countries. For more information, please visit the company's web site at www.beimedical.com.

Except for historical information, this news release may be deemed to contain forward-looking statements that involve risks and uncertainties, including statements with respect to: timely development; acceptance and pricing of the HTA system; whether the HTA proves to be safe and effective in U.S. and international clinical trials under applicable regulatory guidelines; receipt of required FDA approval; the impact of competitive products and pricing; and general economic conditions as they affect BEI Medical's customers, as well as other risks detailed from time to time in the company's reports to the Securities and Exchange Commission, including the company's Form 10-K annual report.

           BEI MEDICAL SYSTEMS COMPANY, INC. & SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           (Amounts in thousands, except per share amounts)


                      Three Months Ended        Fiscal Year Ended
                  September 30,  October 2,  September 30,  October 2,
                      2000         1999          2000          1999
                   (Unaudited)  (Unaudited)    (Audited)    (Audited)
                   -----------  -----------    ---------    ---------

Revenues            $    62      $ 1,907      $ 1,375      $ 8,419
Cost of revenues        190        1,304        1,464        5,182
                    --------     -------      -------      -------
   Gross profit
    (loss)             (128)         603          (89)       3,237

Selling, general
 and administrative
 expenses               572        1,934        3,810        7,350
Research,
 development and
 related expenses       381          701        1,661        3,184
Gain on asset sale      --           --        (1,913)         --
                    ----------   ---------    ----------   ---------
                        953        2,635        3,558       10,534
                    ----------   ---------    ----------   --------


   Loss from
    operations       (1,081)      (2,032)      (3,647)      (7,297)

Interest income          72           18          299          105

Interest expense          1          (68)         (49)         (96)
                    ----------   ---------    ---------    --------

   Loss before
    income taxes and
    extraordinary
    item             (1,008)      (2,082)      (3,397)      (7,288)

Income tax benefit     (281)         (64)        (580)        (379)
                    ----------   ---------    ---------    --------

   Loss before
    extraordinary
    item               (727)      (2,018)      (2,817)      (6,909)
Extraordinary loss
 on extinguishment
 of debt                --           --          (130)         --
                    ----------   ---------    ---------    --------

   Net loss         $  (727)     $(2,018)     $(2,947)     $(6,909)
                    ==========   ==========   ===========  =========


Loss per common
 share

   Loss before
    extraordinary
    loss per common
    share, basic
    and diluted     $ (0.10)     $ (0.27)     $ (0.37)     $ (0.92)
                    ==========   =========    =========    =========

   Extraordinary
    loss on
    extinguishment
    of debt, basic
    and diluted     $   --       $   --       $ (0.02)     $   --
                    ==========   ========     ==========   ========

   Net loss per
    common share,
    basic and
    diluted         $ (0.10)     $ (0.27)     $ (0.39)     $ (0.92)
                    =========    =========    =========    ========

Weighted average
 shares outstanding   7,627        7,550        7,615        7,503
                    ==========   =========    =========    ========


BALANCE SHEET HIGHLIGHTS
(Dollars in thousands)


                                September 30,         October 2,
                                    2000                1999
                                  (Audited)           (Audited)
                                  ---------           ---------

Cash and cash equivalents         $ 4,228              $ 1,397
Working capital                     4,285                6,905
Total assets                        6,138               10,962
Stockholders' equity                4,771                7,699