COMPUTER MOTION REPORTS RECORD REVENUE.

Computer Motion Inc. (Nasdaq:RBOT), Santa Barbara, Calif., a world leader in medical robotics, has announced record revenue for its fourth quarter and year ended Dec. 31, 1998.

Revenue for the quarter totaled $3,428,000, a 66% increase from revenue of $2,070,000 in last year's fourth quarter. Gross profit of $1,998,000 also established a quarterly record and was up 59% from the $1,260,000 recorded in last year's fourth quarter. Compared with the third quarter, fourth quarter revenue was up $621,000 (22%) and gross profit was up $409,000 (26%). The company has now posted seven consecutive quarters of increasing revenue.

The company's AESOP(R) and HERMES(tm) product lines were responsible for the revenue increase. AESOP fourth quarter revenue of $2,435,000 increased 59% over the previous year's fourth quarter level as a result of increased unit sales and higher average selling prices, as well as increased sales of consumables and services.

HERMES revenue of $675,000 in the quarter resulted mainly from commercial shipments of the HERMES Control Center under the company's arrangement with its initial OEM customer for this product, Stryker Corp.

ZEUS(tm) revenue of $318,000 in the quarter related to contractual payments from hospitals where ZEUS Robotic Surgical Systems have been installed under research arrangements.

Robert W. Duggan, chairman of the board and CEO of Computer Motion, said: "The fourth quarter included a number of important events. The company enjoyed record revenue led by record sales levels for AESOP and HERMES. The first human cardiac procedures under a Food and Drug Administration (FDA) Phase I Investigational Device Exemption (IDE) were successfully performed in the United States with the ZEUS System.

"Initial beating-heart coronary artery bypass graft (CABG) procedures were performed in Europe. Very favorable results were achieved from our FDA Phase I IDE clinical study for tubal reanastomosis. At the required six-week follow-up point, all patients' reanastomosed fallopian tubes were patent, and two of the ten patients have conceived," he continued.

"Agreements were signed with the U.S. Surgical division of Tyco International's Healthcare Group to manufacture and sell cardiac surgery suturing devices for use with the ZEUS System and with STERIS Corp. to integrate their operating room tables, lights and surgical cameras into our HERMES System."

Duggan added: "We have increasing confidence that our broad-based technology platform has the potential to change the way surgical health care will be delivered. The `OR of the Future' will be comprised of intelligent devices which will be voice-controlled and integrated within the OR. We are on the edge of a new era for minimally invasive surgery.

"Robotics, speech recognition, voice control and networkable products such as Computer Motion makes today will play a central role. Increased revenue for each of our two FDA-cleared product lines indicates that the market continues to embrace our computer and voice-controlled robotic technology."

Net loss for the fourth quarter 1998 was $2,817,000 ($.35 per share) compared with a net loss of $2,124,000 ($.28 per share) for the comparable prior-year period. The loss reflects significant additional personnel hired in the sales and marketing, and research and development areas in the past twelve months, as well as increased expenses associated with pre-clinical and clinical trials.

Common shares outstanding increased from 7,671,000 at Dec. 31, 1997, to 8,354,000 shares at Dec. 31, 1998.

For the full year ended Dec. 31, 1998, revenue of $10,586,000 in 1998 increased 60% from revenue of $6,611,000 in 1997, and net loss of $11,545,000 ($1.45 per share) in 1998 compared with net loss of $9,219,000 ($2.12 per share) in 1997.

Duggan further stated: "Based on the excellent results from the Phase I tubal reanastomosis IDE, we filed an IDE with the FDA to begin a multi-center clinical study of the ZEUS system for non-cardiac laparoscopic procedures. At Stryker Endoscopy's annual sales meeting, we presented the HERMES System to the Stryker sales group and have trained over 50 Stryker representatives and now anticipate accelerating sales of HERMES.

"We enjoyed a highly successful Society of Thoracic Surgeon's meeting in San Antonio where ZEUS was demonstrated for the first time on the show floor. Conformite Europeane (CE) mark has been received for ZEUS which will allow us to begin marketing the product in Europe," he continued.

"Based on the level of surgeon excitement regarding ZEUS, we expect to continue to expand our ZEUS installations which currently number fourteen. We expect to complete the Phase I ZEUS-based cardiac study in February and will be submitting an IDE with the FDA to begin a multi-center, worldwide clinical study thereafter."

Computer Motion is creating the cornerstone technologies and products for today's Intelligent Operating Room(tm). The company develops, manufactures and markets proprietary computer-enhanced and robotic surgical systems which enhance surgeons' capabilities, improve outcomes and reduce costs.

Computer Motion's products include: the AESOP3000, a voice-controlled, endoscope positioning system; the HERMES Control Center, a centralized system which enables the surgeon to voice control a network of "smart" medical devices; and the ZEUS Robotic Surgical System for new minimally invasive microsurgery procedures, such as endoscopic coronary artery bypass grafting (E-CABG(tm)).

The company's Internet Web site is www.ComputerMotion.com.

For more information, call 805/968-9600 ext. 113.