BEI Medical Systems and HealthSouth Corporation Launch Hydro ThermAblator Clinical Pilot Program for the Treatment of Excessive Menstrual Bleeding.

Business Editors & Health/Medical Writers

TETERBORO, N.J.--(BW HealthWire)--April 2, 2002

BEI Medical Systems Company, Inc. (Nasdaq:BMED) today announced a marketing and services agreement with HealthSouth Corporation (NYSE:HRC).

Under this agreement, HealthSouth utilizes the Company's Hydro ThermAblator(R) (HTA) system under a clinical pilot program in a select group of geographically dispersed HealthSouth facilities. Gynecologists at HealthSouth clinical pilot sites have begun to treat women suffering from excessive menstrual bleeding by performing endometrial ablation utilizing the HTA. Following the clinical pilot initiative, the Company and HealthSouth will work together to provide gynecologists and their patients with access to endometrial ablation treatment utilizing the HTA at additional HealthSouth facilities nationwide.

Under the agreement, both BEI Medical and HealthSouth will promote the implementation and utilization of the HTA for treating excessive menstrual bleeding (menorrhagia) due to benign causes. BEI will provide workshop training, in-service training, and ongoing customer and technical support to physicians and staff, while HealthSouth will provide HTA marketing support and will help introduce the HTA to physicians, patients and third-party payors in its network.

"This agreement represents a significant step in the commercialization of the HTA," commented Richard Turner, Ph.D., president and chief executive officer of BEI Medical. "HealthSouth is both a leader and an innovator in women's health, bringing advanced technologies and medical care to its patient populations. We look forward to offering an additional non-surgical alternative to hysterectomy to HealthSouth patients suffering from menorrhagia, which is often a debilitating condition of excessive menstrual bleeding."

"The HTA technology is a very attractive alternative for women who are faced with the prospect of hysterectomy and an inpatient hospital stay," said Richard Scrushy, chairman and CEO of HealthSouth. "This outpatient technology is a promising improvement in women's care in the United States, and complements HealthSouth's value-added strategy of bringing innovation to the marketplace."

About HealthSouth

HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with more than 1,900 locations in all 50 states, the United Kingdom, Australia, Canada and Puerto Rico, and more than 200 ambulatory surgical centers in the United States. HealthSouth can be found on the web at www.healthsouth.com.

About the Hydro ThermAblator(R) (HTA) and Menorrhagia

Menorrhagia, or excessive menstrual bleeding often occurs in the absence of uterine fibroids or tumors, and hormonal treatment is often unsatisfactory. The condition is responsible for approximately 150,000 of the 600,000 hysterectomies performed annually in the United States, but many women who do not seek hysterectomy for relief may suffer in silence until the occurrence of menopause. In April 2001, the U.S. Food and Drug Administration (FDA) approved the HTA system, which uses circulating heated saline to ablate the endometrium, or the lining of the uterus, to decrease or eliminate abnormal uterine bleeding. The portable HTA control unit features a control panel with step-by-step prompts, while gravity flow safely limits the maximum fluid pressure to the patient. HTA therapy includes direct visual control of transcervical access and visualization throughout the duration of the procedure.

In the Company's Phase III clinical trial, treatment using the HTA completely eliminated uterine bleeding in 40% of the patients whose condition was reviewed 12 months following treatment, while an additional 42% exhibited a decrease in uterine bleeding to normal levels or less, as defined by the FDA. HTA treatment resulted in an overall average reduction in uterine bleeding of 84.8%. As announced in November 2001, for those women who were available for follow-up and whose condition was reviewed 24 months following treatment, 47.0% had complete cessation of uterine bleeding and an additional 45.1% had a reduction in uterine bleeding to normal levels or less. In addition, at 24 months following treatment, 94.0% of patients were satisfied with the results of their HTA treatment and 92.5% of patients reported alleviation of menstrual discomfort.

About BEI Medical Systems

In April 2001 BEI Medical Systems Company, Inc. received FDA approval to market its sole product, the Hydro ThermAblator, a proprietary system that is intended to treat menorrhagia (abnormal uterine bleeding). BEI Medical Systems, Hydro ThermAblator and HTA are registered trademarks of BEI Medical Systems Company, Inc. in the United States and certain foreign countries.

This press release contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements may be deemed to include information that is not historical, including without limitation, statements based on our current expectations, assumptions, estimates and projections about our Company and our industry, including statements with respect to the timely acceptance, commercialization and pricing of our Hydro ThermAblator or HTA, the establishment of a qualified sales representative network, the impact of our cost reduction programs on the cost of the HTA procedure set, the impact of competitive products and pricing, the ability of the Company to satisfy the conditions of the FDA approval and on-going regulatory requirements, the efficacy of future HTA treatments and general economic conditions as they affect our customers. Readers are cautioned that the forward-looking statements reflect management's analysis only as of the date hereof, and we assume no obligation to update these statements. Actual events or results may differ materially from the results discussed in or implied by the forward-looking statements. In addition to the factors set forth elsewhere in this press release, factors that might cause such a difference include, but are not limited to, risks related to the Company's ability to raise additional capital, and those risks and uncertainties discussed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the period ended September 29, 2001, and the Company's Quarterly Report on Form 10-Q for the period ended December 29, 2001.