Criticare Systems announces increase in third quarter revenues; company enjoys modest growth in revenues while simultaneously transitioning to new product line.

MILWAUKEE--(BUSINESS WIRE)--April 16, 1996--Criticare Systems Inc. (NASDAQ/NMS:CXIM), a manufacturer and marketer of medical monitoring equipment, today reported net sales for the third quarter of fiscal 1996 of $7.7 million and a net loss per share of ($0.03).

Revenues for the comparable 1995 period were $7.2 million with earnings per share of $0.01.

Gerhard Von der Ruhr, Criticare's President and CEO, summed up the quarter. "Our company is undergoing important product transformation as we transition into the new medical environment mandated by health care reform. This transition has carried a large price tag for Criticare. New products have their own pressures. Our subcontractors are faced with new challenges and responsibilities. Engineering encounters fine tuning requirements. Unexpected glitches appear. We regard these as necessary, and inevitable, growing pains. Their problems may inhibit one quarter, but the new products have the potential of greatly enhancing future quarters. Also, over the last nine months, approximately $0.15 per share has gone into extra marketing, engineering, research and development, and promotional costs related to introducing a broad range of state-of-the-art products.

"Today, Criticare is at the most exciting period in its history. Scholar and Scholar II, representing the company's next generation of monitoring equipment, are already improving sales. More importantly, we believe we will be breaking new ground with the near term introduction of Multiple Parameter Telemetry (MPT). Giving our hospital customers the ability to monitor their patients at remote locations has far reaching profit and patient care implications. The first test site is expected to be in place during the fourth quarter of fiscal 1996, with multiple beta sites to follow. MPT has the potential to measurably accelerate Criticare's growth, propelling us forcefully into the 21st Century.

"Criticare owns a 35% interest in Immtech International, Inc., a privately held biotechnology company headquartered on Northwestern University. Immtech presently has applied for over 50 patents, with 12 of them already being issued. Its core technology involves the harnessing of a naturally occurring body protein for the purpose of rebuilding the body's natural immune system. Immtech's Business Plan calls for it to now move to Phase II and Phase III clinical trials.

"In short, Criticare and its shareholders have paid a large price today to secure tomorrow. Our transition is almost completed, and we are confident results will be noteworthy. Health care is being reborn in the '90s, and Criticare has acted prudently to ensure that it will experience that same rebirth."

Criticare Systems Inc. designs, manufactures and markets cost effective patient monitoring systems and non-invasive sensors for a wide range of hospital and alternate health care environments throughout the world. Through its 35 percent ownership in Immtech International, Inc., the company participates in the development of proprietary products designed to reinforce the human body's natural immune system and to provide unique diagnostic capabilities. -0-

                     CRITICARE SYSTEMS INC.
                 CONSOLIDATED INCOME STATEMENT
                         (UNAUDITED)

                                      THREE MONTHS ENDED MARCH 31,
                                         1996           1995

Net sales                             $7,711,343     $7,227,302
Cost of goods sold                     3,996,217      3,509,791
  Gross profit                         3,715,126      3,717,511

Total operating expenses               3,954,502      3,569,124

Operating profit (loss)                 (239,376)       148,387

Net interest expense                     113,306         45,450
Equity in loss of investments                  0         15,000
  Total non-operating expenses           113,306         60,450

  Income (loss) before income taxes     (352,682)        87,937

Income tax provision (benefit)          (135,000)        35,000
  Net income (loss)                    ($217,682)       $52,937

Earnings per share                        ($0.03)         $0.01

Average shares outstanding             6,811,268      6,730,389

                                      NINE MONTHS ENDED MARCH 31,
                                         1996           1995

Net sales                            $23,405,685    $21,224,716
Cost of goods sold                    12,018,780     10,561,680
  Gross profit                        11,386,905     10,663,036

Operating expenses                    11,157,951      9,947,120

Operating profit (loss)                  228,954        715,916

Net interest expense                     272,037        142,424
Equity in loss of investments          2,500,000         45,000
  Total non-operating expenses         2,772,037        187,424

  Income (loss) before income taxes   (2,543,083)       528,492

Income tax provision (benefit)           (15,000)       207,000
  Net income (loss)                  ($2,528,083)      $321,492

Earnings per share                        ($0.37)         $0.05

Average shares outstanding             6,811,268      6,730,389

CONTACT: Criticare Systems Inc., Milwaukee

Gerhard Von der Ruhr, 414/798-8282

or

CCRI Corp.

Malcolm McGuire, 800/828-0406