Computer Motion Announces Record Revenues; Chairman to Assume Role as President/CEO.

SANTA BARBARA, Calif.--(BUSINESS WIRE)--Oct. 23, 1997--Computer Motion Inc. (Nasdaq/NM:RBOT) Thursday announced record quarterly revenues for its third quarter ended Sept. 30, 1997.

Revenues for the quarter totaled $1,685,000, a 49 percent increase from revenues of $1,134,000 in last year's third quarter. For the first nine months of 1997, revenues of $4,541,000 were up 81 percent from last year's comparable period.

Gross profit of $1,007,000 for the quarter exceeded $1 million for the first time, and was up 123 percent from last year's third quarter.

The revenue gains resulted from increased sales of the company's AESOP robotic endoscope positioning system which were up 168 percent in the third quarter and 116 percent year-to-date over last year's comparable periods.

The company's AESOP 2000 with voice control, which was introduced in the fourth quarter of 1996, has been the principal factor in increasing AESOP revenues.

The third quarter of 1996 had included significant development related revenues for the company's ZEUS and HERMES product lines which did not recur to the same extent in the third quarter of 1997.

Robert M. Duggan, Computer Motion chairman of the board, said, "We continue to be excited about the market's acceptance of our robotic endoscope positioning technology. The voice control feature of the AESOP 2000 is becoming the robotic interface technology of choice.

"The company's AESOP 3000 product, which is optimized specifically for cardiac surgery, is pending Food and Drug Administration 510(k) clearance. We fully anticipate the marketplace continuing to embrace this technology which should result in increasing revenues moving forward."

Net losses for the third quarter and first nine months of 1997 were $2,185,000 and $7,095,000, respectively.

These results were negatively impacted by non-cash compensation charges relating to below market value grants of stock, warrants and options of $150,000 in the third quarter and $938,000 in the first nine months of 1997, as well as non-recurring, non-cash interest costs attributable to a fixed conversion feature of a convertible debenture and warrants issued with certain notes payable of $316,000 in the third quarter and $1,442,000 in the first nine months of 1997.

The company continues to progress with its development of HERMES, a technology platform designed to enable a surgeon to directly control multiple operating room devices through verbal commands, and ZEUS, a robotic surgical system composed of three arms, one of which positions an endoscope through verbal commands and two of which enhance the surgeon's capability to manipulate surgical instruments to perform complex minimally invasive surgical procedures like endoscopic coronary artery by-pass grafting ("E-CABG").

Duggan noted, "Computer Motion and Stryker Corp. have jointly filed an initial 510(k) application with the Food and Drug Administration for certain of Stryker's operating room devices incorporating Computer Motion's HERMES technology.

"HERMES will provide surgeon voice activation and control of a number of Stryker's endoscopic products. In addition, we continue to make solid progress with ZEUS pre-clinical studies. Any surgery requiring absolute precision in a microsurgical environment will be a primary candidate for a ZEUS-based procedure."

The company additionally announced that Gene Wang will be stepping aside as the company's chief executive officer and president. He will continue as a member of the board of directors.

Wang stated, "I am pleased with the many accomplishments of Computer Motion while I was CEO. The hard reality is that I believe the company would be best served by a leader with long-term industry- specific knowledge in medical devices and operating room environments, as well as strong relationships with surgeons and high level hospital administrators.

"By making room for such a person, I believe I will be making a significant contribution to the future of Computer Motion as it brings the power of computers and robotics to the operating room."

Duggan said, "Gene Wang is an executive embodied with tremendous energy and insight. He has demonstrated time and again his ability to make tough decisions. All of our shareholders owe Gene a huge debt of gratitude for his contribution to the company. We wish him extraordinary prosperity in his next endeavor and have no doubt he will continue to be successful."

Duggan will temporarily assume the responsibilities of president and chief executive officer as the company seeks a successor to Wang.

Founded in 1989, Computer Motion is the world leader in medical robotics. The company's mission is to enhance surgeons' capabilities, improve outcomes and reduce costs using computers and robotics.

Computer Motion is traded on the Nasdaq National Market under the stock symbol RBOT. The company's Internet Web site is www.ComputerMotion.com . -0-

Note: This news release contains forward-looking statements concerning the company's business, products and research and development activities. Actual results may differ materially depending on a number of risk factors, including the risks that competitors may challenge or design around the company's patents or develop competing technologies, pre-clinical and clinical studies may be suspended or take substantially longer than anticipated to complete, regulatory approvals may or may not be obtained, and physicians and/or payors may not accept the company's new 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 Registration Statement of Form S-1 and Quarterly Report on Form 10-Q for the period ended June 30, 1997. 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)

                      Three Months Ended        Nine Months Ended
                           Sept. 30,                 Sept. 30,
                      1997         1996          1997        1996

Revenue            $1,685,000   $1,134,000   $4,541,000  $2,512,000
Cost of revenue       678,000      682,000    2,053,000   1,583,000
Gross profit        1,007,000      452,000    2,488,000     929,000
Selling, general
 and administrative
 expense            1,938,000    1,042,000    5,615,000   2,643,000
Research and
 development
 expense            1,126,000      426,000    2,472,000   1,023,000
Loss from
 operations        (2,057,000)  (1,016,000)  (5,599,000) (2,737,000)
Other expense         128,000       88,000    1,495,000     207,000
Loss before income
 taxes             (2,185,000)  (1,104,000)  (7,094,000) (2,944,000)
Provision for
 taxes                 -             -            1,000       1,000
Net loss          ($2,185,000) ($1,104,000) ($7,095,000)($2,945,000)
Weighted average
 shares
 outstanding used
 to compute net
 loss per share     7,157,000    2,832,000    4,350,000   2,829,000
Net loss per share  (31 cents)   (39 cents)     ($1.63)     ($1.04)

CONTACT: Computer Motion Inc., Santa Barbara

Robert M. Duggan, 805/968-9600 ext. 113

Stephen L. Wilson, 805/968-9600 ext. 155