Cardiac Control Systems Inc. announces second consecutive year of record revenues and operating profit, achievement of ISO 9002 and establishment of a Japanese branch.

PALM COAST, Fla.--(BUSINESS WIRE)--July 8, 1996--Cardiac Control Systems Inc. (BB:CDCS) announced its second consecutive year of record revenue and operating profit, that it had achieved ISO 9002 status allowing reentry into Europe, and that it was establishing a branch office in Japan in preparation for reentry into the Japanese market.

Cardiac Control Systems' ("CCS") total revenue for the year ended March 31, 1996 was $7,673,523, $1,945,986 or 34% ahead of the $5,727,537 realized in fiscal year 1995, and the highest level achieved by the company in its history. This increase reflects gains in both direct sales of $503,961 and in royalties received from Intermedics of $1,442,025. Sales growth was achieved despite the company's inability to sell in Europe and Japan as in previous year. Lack of ISO approval required for European sales and Japanese regulatory approval of its smaller SAVVI pacemaker, effectively barred CCS from these markets in fiscal year 1996.

CCS also realized an operating profit for the year ended March 31, 1996 of 159,486, $145,922 ahead of the operating profit achieved in FY 1995. This improvement is due to increases in sales volume and royalties, and in operating efficiencies generated over the course of the year. Gross margin as a percent of sales for example increased 4 percentage points, from 48% to 52%.

Net income for fiscal 1996 was a loss of $261,505. This compared to a fiscal 1995 net income of $1,374,971 realized in large part because of an extraordinary gain of $1,656,788 taken during that year relating to debt forgiveness. Interest and financing related expense in fiscal 1996 were $672,303. A primary component of this resulted from interest on $2.8 million in 5% convertible debentures which were converted to common stock on March 31, 1996.

CCS also announced that it had achieved ISO 9002 approval. This will allow the company, in conjunction with its partner Grupo Taper International, to reenter the European pacemaker market during its second fiscal quarter. This market is approximately equal in size to the United States market, providing significant sales growth opportunity for fiscal 1997.

In its effort to reenter the Japanese market, CCS has announced that it is establishing a separate Tokyo based office. Employees from this office will work closely with local distribution partners to gain necessary regulatory approvals and aggressively penetrate the market. The company has completed all documentation for its first filing with the Ministry of Health in Japan, and expects its first import approval within the next six months. Because of a pricing structure that is substantially higher than both the United States and Europe, the Japanese market is an extremely attractive opportunity.

"These are major achievements for the company," stated Alan J. Rabin, president and chief executive officer, "and clear indications of the progress that the company is making. The ISO 9002 approval in particular is a strong reflection of the quality of our product, our employees and our total operation system. Our ability to reenter the European and Japanese markets offers CCS substantial growth opportunity and makes us truly a world wide company. These two markets, combined with the United States, account for almost 75% of the total $2 billion pacemaker market."

CCS designs, develops, manufactures, markets and sells a broad line of implantable cardiac pacemakers, implantable pacemaker leads, and related products. The company also manufactures the first single lead for A-V synchronous pacing, which replaces the conventional two lead system for a substantial portion of the market. It has been proven to significantly enhance patient care, and provide for faster, easier and more cost effective implantation. The growing worldwide market for pacemakers is currently estimated at $2 billion.

Cardiac Control Systems Inc. is located at 3 Commerce Blvd., Palm Coast, FL 32164. The telephone number is 904/445-5450. -0-

                    CARDIAC CONTROL SYSTEMS INC.
                      Statements of Operations

Fiscal Year Ended March 31,         1996            1995
Revenue
  Net Sales                      $5,321,823      $4,817,862
  Royalty Income                  2,351,700         909,675
  Total Revenue                   7,673,523       5,727,537

Costs & Expenses
  Cost of Products Sold           2,551,413       2,495,673
  Selling, General & Admin.       3,968,000       2,711,923
  Eng., Research & Devel.           994,624         506,377
  Total Costs & Expenses          7,514,037       5,713,973

Income from Operations              159,486          13,564

Other Income (Expenses)            (420,991)      1,361,407

Net Income (Loss)                 ($261,505)     $1,374,971

Net Loss per Common Share            ($0.19)          $0.79

Average Number of
Common Shares Outstanding         1,356,607       1,372,099

CONTACT: Cardiac Control Systems, Palm Coast

904/445-5450