CompuMed announces results for fourth quarter and fiscal year.

MANHATTAN BEACH, Calif.--(BUSINESS WIRE)--Dec. 19, 1996-- CompuMed Inc. (NASDAQ Small Cap: CMPD) today announced its results for the fourth quarter and fiscal year ended Sept. 30, 1996.

Total revenues for the fourth quarter ended Sept. 30, 1996 were $650,000, up 4 percent from $626,000 for the same period the previous year. Net loss for the fourth quarter was $525,000 or six cents per share (based on 8,691,000 average shares outstanding) compared to $2,310,000 or 30 cents per share (based on 7,763,000 average shares outstanding) for the same period last year.

For the fiscal year ended Sept. 30, 1996, total revenues were $2,573,000, compared to $3,010,000 for the same period the previous year. Net loss for the fiscal year was $4,647,000, or 54 cents per share (based upon 8,534,000 average shares outstanding), compared to $3,390,000, or 55 cents per share for the same period last year.

The revenue decreases during fiscal year 1996 reflect CompuMed's termination of operations in real estate investment, its renewed focus on research and development, and its move of OsteoGram(R) services to an outside processor. These services are now provided through a subsidiary of Merck. Revenues from ongoing electrocardiogram (ECG) operations increased during the 1996 fiscal year by $365,000, or 22 percent, from the prior year. The net loss of $4,647,000 during 1996 includes nonrecurring charges relating to the securities litigation of $2,786,000, of which $2,099,000 was paid in CompuMed equity securities. Research and development expenditures increased by 145 percent to $613,000 during the 1996 fiscal year from those of the prior year.

"During the fiscal year, we achieved our primary goals," said Rod N. Raynovich, President and Chief Executive Officer of CompuMed. "These goals included streamlining existing operations, defining new opportunities, and increasing the focus of our development efforts for achievable products to optimize future earnings."

Mr. Raynovich also highlighted recent developments in CompuMed's technology programs:

--"CompuMed is making excellent progress on the second-generation OsteoSystem, which will incorporate innovative digital imaging technology into one of the first radiology applications of its kind. With the market for osteoporosis testing growing, we believe CompuMed is well-positioned to take advantage of this opportunity.

-- Our recent deal with Varian, through which we receive exclusive rights for our application of Varian's exciting new digital x-ray technology, is a key milestone in CompuMed's development of the second-generation OsteoSystem.

-- The Varian deal, along with our licensing and sponsored research agreement with the University of Massachusetts Medical Center (UMMC) earlier in the fiscal year, has further strengthened CompuMed's technology for the second-generation OsteoSystem.

-- We are also redefining our cardiac monitoring operations to incorporate additional modalities and services. In particular, CompuMed is developing as a niche-player in the exploding field of telemedicine."

CompuMed, based in Manhattan Beach, CA, is an emerging medical information technology and service company focused on the diagnosis, monitoring, and management of costly diseases, such as cardiovascular disease and osteoporosis. CompuMed's core businesses include telecardiology services and developing medical imaging technology and services for the quantitative assessment of bone health.

This news release contains forward-looking statements based upon current expectations that involve a number of business risks and uncertainties, such as CompuMed's ability to develop and market new products and services, uncertainties in the regulatory approval process, increased competition, and other factors, that are described in the Prospectus, dated March 13, 1996, to CompuMed's Registration Statement filed with the U.S. Securities and Exchange Commission (SEC) on Form SB-2 (Reg. No. 333-01453) and our recent Form 10-KSB. -0-

Editor's Note: This release is available on the Internet at http://www.compumed.net and http://www.noonanrusso.com -0-

                           CompuMed Inc.
                       Selected Financial Data
                   $ in thousands (except share data)

                    For the Three Months         For the Fiscal Year
                       Ended Sept. 30,             Ended Sept. 30,
                       1996       1995             1996     1995
Revenues
 Cardiac monitoring  $  545     $  398           $2,008    $1,643
 OsteoGram(R) services   --        (28)              --       327
 OsteoGram(R) royalties  17         --               37        --
 Real estate rentals     --         76               99       431
 Other                   88        180              429       609
                     $  650     $  626           $2,573    $3,010

Operating expenses   $  931     $1,345           $3,821    $4,650
Research &
 Development            236         91              613       250
Provision for litigation
 settlement               8         --            2,766        --
Loss on asset
 impairment              --      1,500               --     1,500
Net loss             $ (525)   $(2,310)         $(4,647)  $(3,390)
Net loss per share   $(0.06)   $ (0.30)         $ (0.54)  $ (0.55)
Average shares
 outstanding      8,691,000  7,763,000        8,534,000  6,150,000

                                      Sept. 30, 1996
Cash and marketable securities           $2,644
Accounts receivable                         435
Total current assets                      3,254
Total assets                              3,978
Total current liabilities                   942
Total stockholders' equity                2,958

CONTACT: CompuMed Inc.

Rod N. Raynovich, 310/643-5106, ext. 119

e-mail: [e-mail]

or

Noonan/Russo Communications Inc.

212/696-4455

Rich Tammero (ext. 222)

Jan Medina (ext. 216)

e-mail: [e-mail]