Computer Motion Announces Record Results; Record Quarterly Revenues and Gross Profit Reported for Second Quarter.

Business Editors

SANTA BARBARA, Calif.--(BUSINESS WIRE)--July 27, 2000

Computer Motion Inc. (Nasdaq:RBOT), the pioneer and leader in medical robotics, today announced its financial results for the quarter ended June 30, 2000.

Revenue for the quarter totaled $5,962,000, a 27% increase from revenue of $4,699,000 in last year's second quarter. Orders booked totaled $6,692,000 with an approximate net of $700,000 deferred to later periods under the Computer Motion revenue recognition policy.

The gross profit of $3,580,000 was 60% of sales, exceeding the previous year quarter results in both total ($2,720,000) and percent of sales (58%). The company realized significant increases as well compared to the first quarter of 2000 with revenue increasing $4,594,000 (336%), gross profit increasing $2,901,000 (427%) and gross profit as a percent of sales increasing by 10% points.

All three of the Computer Motion platforms (AESOP(R), HERMES(TM) and ZEUS(TM)) showed very strong results in the quarter. The ZEUS sales of $2,779,000 (net of deferred revenue) with six systems placed set a new quarter record. Quarterly AESOP revenues of $1,797,000 for 31 systems were also very strong.

"We launched our EVOLVE(TM) program in May, and already we are seeing significant interest in this program using AESOP as the first step towards robotically assisted surgery," said Greg Ruehle, vice president of Global Sales. Record revenues were also set for the important category of recurring revenue with $484,000 realized during the quarter.

"Our revenues of supplies, kits and accessories are clearly starting to demonstrate the validity of our recurring revenue model," said Gordon Rogers, chief financial officer.

Net loss for the quarter totaled $3,609,000 ($0.41 per share) compared to a loss of $2,387,000 ($0.28 per share) for the same period in 1999. The increased loss resulted primarily from the continuing investment in FDA clinical trials and procedure development. Common shares outstanding increased to 9,434,000 at June 30, 2000 compared to 8,450,000 on June 30, 1999.

Robert W. Duggan, chairman and CEO of Computer Motion, stated: "I am very pleased with our second-quarter results. Our gross bookings for the quarter exceeded reported revenues by over $700,000. Contributing to our excellent results was strong sell-through of the ZEUS System in Japan and excellent sell-through of the HERMES platform by the Stryker sales force."

Duggan noted the following additional second-quarter highlights:

-- 510(k) regulatory pathway for the ZEUS System as determined by

the United States Food and Drug Administration;

-- Rapid productivity of our Asian sales force led by Frank

Tamru; and,

-- Strong indications of surgeon approval for its winning EVOLVE

program, conceived by its marketing department under the

guidance of Anita Chambers. The newly launched EVOLVE program

creates a pathway whereby a cardiac surgeon with little or no

endoscopic operating experience can evolve into a highly

competent endoscopic beating heart surgeon at her or his own

pace by Computer Motion products and services

(http://www.computermotion.com/pressr107.html).

Last week, Computer Motion hosted the 4th International Congress on Computers and Robotics in the Operating Room. This year's congress celebrates the arrival of the new millennium and the dawn of a new era in surgery. Attendance was at an all-time high with more than 400 surgeons, nurses and administrators from around the world.

"We are excited about our prospects for the second half of the year," said Duggan. "We anticipate that Computer Motion will generate record results once again in the third quarter."

Computer Motion is a high-tech medical device company equipping surgeons to enhance life by evolving surgical practices. The company develops, manufactures and markets proprietary computer-enhanced and robotic surgical systems that enhance surgeons' capabilities, improve outcomes and reduce costs. To date, the Computer Motion family of products has safely assisted more than 100,000 minimally invasive procedures across a broad range of surgical disciplines.

Computer Motion's products include the voice-controlled AESOP(R) endoscope positioning system; the HERMES(TM) Control Center, a centralized system that enables the surgeon to voice control a network of "smart" medical devices; and the ZEUS(TM) Robotic Surgical System for new minimally invasive microsurgery procedures, such as endoscopic, beating heart bypass surgery. The ZEUS System is CE-Marked for commercial sale in the European Community and is co-marketed by Computer Motion and Medtronic (NYSE:MDT). Computer Motion has completed an FDA-approved Phase 1 Investigational Device Exemption (IDE) coronary bypass study and has initiated an IDE mitral valve surgery study with the ZEUS System. The company's Web site is www.ComputerMotion.com.

This news release contains forward-looking statements concerning the company's business and products. Actual results may differ materially depending on a number of risk factors, including the risks of competition and competing technologies, duration or suspension of clinical studies, regulatory clearances and approvals, and physician, hospital and payor acceptance of the company's products. These factors and other risks inherent in the company's business are described from time to time in the company's Securities and Exchange Commission filings, including its annual report on Form 10-K. The company undertakes no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

                         COMPUTER MOTION INC.
                  CONDENSED STATEMENTS OF OPERATIONS
                              (UNAUDITED)
           (Amounts in thousands, except per-share amounts)

                            Three Months Ended      Six Months Ended
                                  June 30                June 30
                             2000        1999       2000        1999

Revenue                    $ 5,962     $ 4,699    $ 7,330     $ 8,651
Cost of revenue              2,382       1,979      3,071       3,693
Gross profit                 3,580       2,720      4,259       4,958
Research & development
 expense                     3,353       2,297      5,569       4,531
Selling, general &
 administrative expense      3,716       2,991      7,269       5,964
Loss from operations        (3,489)     (2,568)    (8,579)     (5,537)
Other expense/(income)         113        (188)        37        (427)
Loss before income taxes    (3,602)     (2,380)    (8,616)     (5,110)
Income tax provision             7           7         12          13
Net loss                  $ (3,609)   $ (2,387)  $ (8,628)   $ (5,123)

Weighted average common
 shares outstanding used
 to compute net loss per
 share - basic and diluted   8,831       8,417      8,806       8,404
Loss per share -
 basic and diluted         $ (0.41)    $ (0.28)   $ (0.98)    $ (0.61)