Criticare Systems, Inc. -CSI- Reports Third Quarter Results.

Business Editors

MILWAUKEE--(BUSINESS WIRE)--May 12, 2000

CRITICARE SYSTEMS, INC. (NASDAQ-NMS: CXIM) today reported third quarter revenues of $6,130,915 compared to $7,275,682 recorded in the same quarter in fiscal 1999. Third quarter revenues were adversely affected by CSI's inability to ship against international orders for its new bedside monitor. As previously reported, CSI encountered a shortage of LC displays and had to implement a product change to accommodate an alternate supplier. It began shipping in late April to International customers. The resulting loss from operations was $1,143,168 compared to a loss of $485,586 for the same period in 1999. The actual bookings and backlog for the quarter exceeded that of the same period in 1999. The company is also now launching this product domestically having received FDA approval to market on May 5, 2000.

Revenue for the nine months ended March 31, 2000 was $19,634,951 compared to $21,290,165 for the same period last year. A loss from operations of $1,201,154 was recorded which compares to a loss from operations of $1,580,181 for the same period in fiscal 1999. Again, the loss is attributable to having incurred all the costs of manufacturing the new line of bedside monitors, but not being able to ship due to a parts shortage. This does not include a gain of $2,500,000 that was realized from a private placement sale of Immtech shares. The stock sale had been planned in fiscal third quarter of 1999 to address the settlement requirements of a long standing lawsuit.

CSI president and CEO, Emil Soika, commented, "The current fiscal year represents a very challenging transition for CSI. We are past the development stage of our new product line, have experienced strong international market acceptance, and are now able to sell domestically. Our initial parts shortage is behind us, leaving the challenge of building and shipping the new line."

Soika continued, "Our goal has been to totally recreate CSI through the development of new, innovative products, enhancing our distribution system worldwide, and providing world class customer service. This is what the company has been working toward for the past year. We believe it is a major first step in building shareholder value."

Criticare Systems, Inc. (www.csiusa.com) designs, manufactures, and markets cost-effective patient monitoring systems and noninvasive sensors for a wide range of hospitals and alternate health care environments throughout the world.

This press release contains forward-looking statements. Such statements refer to the Company's beliefs and expectations. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those described. Such uncertainties include, but are not limited to, the timely completion of new products, regulatory approvals for new products, the risk of new and better technologies, as well as general conditions and competition in the Company's markets. Other risks are set forth in CSI's reports and documents filed from time to time with the Securities and Exchange Commission.

                        CRITICARE SYSTEMS, INC.
                     CONSOLIDATED INCOME STATEMENT
                              (UNAUDITED)

                                       THREE MONTHS ENDED MARCH 31,
                                             2000           1999
                                             ----           ----
NET SALES                                $ 6,130,915    $ 7,275,682
COST OF GOODS SOLD                         3,896,086      3,897,129
     GROSS PROFIT                          2,234,829      3,378,553

TOTAL OPERATING EXPENSES                   3,377,997      3,864,139

OPERATING PROFIT (LOSS)                   (1,143,168)      (485,586)

NET INTEREST EXPENSE                          54,550        195,145
     TOTAL NON-OPERATING EXPENSES             54,550        195,145

     INCOME (LOSS) BEFORE INCOME TAXES    (1,197,718)      (680,731)

INCOME TAX PROVISION                               -              -
     NET (LOSS)                          $(1,197,718)   $  (680,731)

EARNINGS PER SHARE - BASIC               $     (0.14)   $     (0.08)
EARNINGS PER SHARE - DILUTED             $     (0.14)   $     (0.08)

AVERAGE SHARES OUTSTANDING - BASIC         8,684,029      8,701,151
AVERAGE SHARES OUTSTANDING - DILUTED       8,684,029      8,701,151


                                        NINE MONTHS ENDED MARCH 31,
                                             2000           1999
                                             ----           ----
NET SALES                                $19,634,951    $21,290,165
COST OF GOODS SOLD                        11,269,345     11,090,076
     GROSS PROFIT                          8,365,606     10,200,089

TOTAL OPERATING EXPENSES                   9,566,760     11,780,270

OPERATING PROFIT (LOSS)                   (1,201,154)    (1,580,181)

NET INTEREST EXPENSE                         117,649        318,414
EQUITY IN LOSS OF INVESTMENTS                      -        150,000
GAIN ON SALE OF IMMTECH INT'L. INC. STOCK (2,500,000)             -
     TOTAL NON-OPERATING EXPENSES         (2,382,351)       468,414

     INCOME (LOSS) BEFORE INCOME TAXES     1,181,197     (2,048,595)

INCOME TAX PROVISION (BENEFIT)                     -              -
     NET INCOME (LOSS)                   $ 1,181,197    $(2,048,595)

EARNINGS PER SHARE - BASIC               $      0.14    $     (0.24)
EARNINGS PER SHARE - DILUTED             $      0.13    $     (0.24)

AVERAGE SHARES OUTSTANDING - BASIC         8,630,390      8,701,151
AVERAGE SHARES OUTSTANDING - DILUTED       8,861,107      8,701,151