InnerDyne Reports Third Quarter Financial Results; Product Sales Increase 23%, Net Income Up 231%.

Business Editors/Health & Medical Writers

SUNNYVALE, Calif.--(BW HealthWire)--Oct. 31, 2000

InnerDyne, Inc. (NASDAQ NM: IDYN) today reported financial results for the three and nine months ended September 30, 2000.

Third quarter 2000 net income increased 231% to $1.19 million, or $0.05 per diluted share, compared with net income of $359 thousand, or $0.02 per share in 1999. Net income before tax was $1.2 million, an increase of 238% compared with net income before tax of $363 thousand in the third quarter of 1999. Third quarter 2000 total revenues increased 21% to $6.41 million, compared with $5.31 million in 1999, while product revenues rose 23% to $6.39 million. Gross margins in the third quarter 2000 exceeded 74%.

For the nine months ended September 30, 2000, net income rose 289% to $3.57 million, or $0.14 per diluted share, including deferred tax benefits of $1.12 million. Net income before tax for the same period totaled $2.53 million, compared with net income before tax of $932 thousand reported in the first nine months of 1999. Compared to the same period of 1999, revenues for the first nine months of 2000 increased 22% to $18.05 million, while product sales rose 23.5% to $17.89 million.

"InnerDyne's third quarter financial results reflect a continuation of the trends established in recent quarters, with growth in product revenues of almost 23% compared to the prior year period," commented William G. Mavity, InnerDyne's President and CEO. "Product revenues during the quarter included vascular access product shipments to Maxxim Medical, as well as the initial U.S. commercial sales of the Nephro-Step(TM) product for urological access. Income before tax exceeded 19% of revenues in the current quarter, a record for the Company."

On October 4, 2000 InnerDyne and Tyco International Ltd. (NYSE: TYC; LSE: TYI; BSX: TYC), a diversified manufacturing and service company, announced that they entered into a definitive agreement pursuant to which Tyco will acquire InnerDyne. The transaction will involve an exchange offer for InnerDyne shares in which InnerDyne stockholders will receive a fraction of a Tyco share valued at $7.50 per share for each share of InnerDyne. The transaction is valued at approximately $180 million. The exchange offer was launched on October 18, 2000.

The Company will hold a conference call to discuss these results beginning at 11:00 a.m. Eastern Time today. Individual investors are invited to listen to the conference call over the Internet through Vcall, a service of the Investor Broadcast Network, at www.vcall.com. To listen to the live call, please go to the Web site at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. In addition, a replay will begin shortly after the call has ended and will be available through November 4, 2000.

InnerDyne, Inc. designs, develops, manufactures and commercializes minimally invasive surgical access products incorporating its proprietary radial dilation technology. The Company is also continuing to pursue additional applications for radial dilation in areas outside its primary market focus, and improvements in its proprietary biocompatible coatings technologies, which it intends to commercialize either internally or through strategic alliances.

Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including those risks detailed from time to time in the Company's regulatory filings, including the annual report on Form 10-K for the year ended December 31, 1999, and the Forms 10-Q for the quarters ended in 2000, as or to be filed with the Securities and Exchange Commission.

                            INNERDYNE, INC.

                        STATEMENT OF OPERATIONS
                              (Unaudited)


                    Three Months Ended           Nine Months Ended
                       September 30                September 30

                         2000         1999         2000         1999
                         ----         ----         ----         ----
Revenues            $6,412,280   $5,310,622  $18,054,091  $14,807,403
Costs and expenses:
  Costs of sales     1,658,640    1,475,822    4,652,026    4,238,872
  Research,
   development,
   regulatory
   and clinical        670,522      737,987    2,179,422    2,126,799
  Sales and
   marketing         2,350,235    2,211,616    7,099,983    5,995,226
  General and
   administrative      605,969      559,490    1,858,736    1,635,053
                    ----------  -----------  -----------  -----------
      Total costs
       and expenses  5,285,366    4,984,915   15,790,167   13,995,950

Income from
 operations          1,126,914      325,707    2,263,924      811,453
Other income, net       99,733       37,587      270,653      120,180
                    ----------  -----------  -----------  -----------
      Income before
       income taxes  1,226,647      363,294    2,534,577      931,633
                    ----------  -----------  -----------  -----------
Income tax expense     (39,821)      (4,349)     (84,008)     (14,349)
Deferred tax
 benefit                   --           --     1,116,700           --
                    ----------  -----------  -----------  -----------
      Net income     1,186,826      358,945    3,567,269      917,284
                    ==========  ===========  ===========  ===========
Net income per
 diluted share            0.05         0.02         0.14         0.04
Shares used in
 diluted net
 income per share   25,168,096   23,279,748   24,913,624   23,138,315


                      SELECTED BALANCE SHEET DATA


                                      September 30        December 31
                                            2000                1999
                                            ----                ----
Cash and cash equivalents               $9,469,418        $ 6,862,313
Current assets                          16,622,737         12,356,668
Total assets                            17,295,538         13,145,681
Current liabilities                      1,766,839          2,349,552
Stockholders' equity                    15,528,699         10,563,332