MUNDELEIN, Ill., Jan. 14 /PRNewswire/ -- Bio-logic Systems Corp.
(Nasdaq: BLSC), a designer and marketer of computerized medical
electro-diagnostic equipment, today reported results for the fiscal 1999 third
quarter and nine months ended November 30, 1998.  Total sales in the recent
third quarter decreased nearly 4 percent as the Asian economic crisis, which
has been adversely impacting the company's operations since the first quarter,
continued to impede international sales.
    "Fiscal 1999 will be recorded as a year of transition for Bio-logic.  At a
time when we are undertaking several initiatives to expand the long-term
potential of the company -- our conversion to Windows 95/NT software;
achieving ISO 9000 certification; launching a major new product line to two
substantial and new markets; and, continuing to develop innovative,
next-generation product modules to support our specialist markets -- our
customers in Asia and South America are facing economic turmoil," said Dr.
Gabriel Raviv, president and chief executive officer.  "Consequently, we are
experiencing reduced sales and higher costs associated with research and
development, and regulatory compliance.
    "While Asia's economic problems are beyond our control, we believe that
the efforts we've made this year in penetrating new markets, upgrading our
product lines and marketing our substantial capabilities have laid the
foundation for important growth over the next few years."
    Total sales for the third quarter were $4.4 million compared with
$4.5 million last year.  International sales fell nearly 19 percent over a
year ago, and now represent 16 percent of total sales.  Net income for the
three months was $27,544, or $0.01 per diluted share, compared with $360,639,
or $0.09 per diluted share, last year.  The decrease in net income resulted
from the lower net sales and a 29 percent increase in research and development
costs.
    For the nine months, net sales were $12.5 million compared with
$13.3 million last year.  Net loss was $100,732, or $0.03 per diluted share,
compared with net income of $794,097, or $0.19 per diluted share, for the nine
months a year earlier.  The net loss was attributed to a decline in
international sales of 29 percent from a year ago, a substantial increase in
research and development expenses related to new product development and the
conversion of all product software and higher SG&A expenses attributed to
ISO 9000 compliance led to the net loss.
    Sales of Bio-logic's new hearing screening product, AuDX(R), which is
primarily targeted at the $300 million office-based physician market, continue
to increase steadily.  The company is supporting recent legislation for
mandatory newborn hearing testing by initiating discussions with hospital
decision-makers in Massachusetts, California, Virginia, West Virginia, Utah,
Colorado, Mississippi, Connecticut, Hawaii, and Rhode Island to assess their
product and training needs, and present AuDX's capabilities.
    Another substantial opportunity for Bio-logic is its Ceegraph system of
neurological monitoring devices, which continues to drive revenues.  Ceegraph
4, the first Windows 95/NT integrated digital system for all EEG, ambulatory
and epilepsy monitoring needs was introduced in October 1998 and sales are
just beginning to ramp up.
    The company's newest EEG system, the Ceegraph XL, is a 64-128 channel
module that is positioned to compete in the $20 million, long-term epilepsy
monitoring market.  It utilizes Ceegraph's single-solution expandable system,
which integrates all EEG needs, including routine tests, ambulatory recordings
and epilepsy monitoring.  The 64-128 channel system raises the industry
standard in epilepsy monitoring, and Bio-logic is one of only a few
competitors offering this capability.  The company has a growing backlog of
orders for this product that it expects to ship in the fiscal 2000 first
quarter.
    As announced earlier this week, Boston Children's Hospital has awarded
Bio-logic a contract worth approximately $1.4 million for the purchase of
Bio-logic's comprehensive neurodiagnostic systems including long-term epilepsy
monitoring, clinical EEG, ambulatory EEG, polysomnography, intraoperative
evoked potential monitoring and reader stations for multiple locations.
    In addition, Bio-Logic enhanced its strong presence in the Japanese market
with Hokaido University's decision to award its $400,000 neurodiagnostic
network entirely to Bio-Logic.  Similar to Boston Children's order, this
network will utilize the latest developments of Bio-logic's EEG technologies.
    "Our company was founded on the idea that our systems should be expandable
to perform more than one type of test and that these tests should be
upgradeable so that our customers can cost-effectively increase their
capabilities," said Dr. Israel Raz, Bio-logic Systems Corp. marketing
director.  "Boston Children's selection of Bio-logic affirms that we are
taking the right approach, utilizing the best technology."
    As the company closes out fiscal 1999, its goal is to complete the
conversion of its Windows-based Sleepscan system, for diagnosis of sleep
disorders, and continue to market its AuDX and Ceegraph XL systems, leveraging
the growing demand for these innovative product lines.
    "We will continue to execute our expansion strategy and capitalize on the
superiority of our state-of-the-art, integrated monitoring devices," said
Raviv.  "The complications in the Far East will continue to impact our
operations, but as we shift our primary strategy from compliance and software
upgrades, which were necessary this year, to focus more aggressively on
marketing and production, we believe our domestic sales should begin to
recover in 2000."
    Bio-logic financial position remains strong.  The company's cash and
marketable securities increased to $6.0 million at November 30, 1998, compared
with $5.1 million at February 28, 1998.  Debt was a modest 3 percent of
capitalization, and the current ratio was 4.9.
    Bio-logic Systems Corp., headquartered in Mundelein, Ill., designs,
develops, assembles and markets computer-based electro-diagnostic systems for
use by hospitals, clinics, universities and physicians.  The systems conduct
tests that are typically used by medical practitioners to aid in the diagnosis
of certain neurological, psychiatric and sensory disorders, psychological and
learning disorders, brain disorders and tumors.

    Except for descriptions of historical facts, this release contains
forward-looking statements that involve known and unknown risks, which may
cause the company's actual results in the future to differ materially from
those currently anticipated.  These risks include, among others, fluctuations
in sales and operating results; risk associated with international operations
including monetary crisis; regulatory, competitive, and contractual risks; the
effects of economic conditions; and the availability of capital to finance
planned growth, as well as other risks detailed from time to time in the
company's filings with the Securities and Exchange Commission.

                     BIO-LOGIC SYSTEMS CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    UNAUDITED

                            THE THREE MONTHS ENDED   THE NINE MONTHS ENDED
                            Nov. 30,      Nov. 30,     Nov. 30,    Nov. 30,
                              1998         1997          1998        1997

    NET SALES             $4,380,800    $4,549,481   $12,449,281 $13,304,511

    COST OF SALES          1,357,619     1,390,959     3,949,753   4,258,481

      Gross Profit         3,023,181     3,158,522     8,499,528   9,046,030

    OPERATING EXPENSES:
      Selling, general &
        administrative     2,259,874     2,066,456     6,582,739   6,193,026
      Research &
        development          785,339       608,875     2,241,061   1,809,960

      Total Operating
        Expenses           3,045,213     2,675,331     8,823,800   8,002,986

    OPERATING INCOME
      (LOSS)                 (22,032)      483,191      (324,272)  1,043,044

    OTHER INCOME (EXPENSE):
      Interest Income         69,959        56,084       198,316     156,371
      Interest expense        (5,468)      (10,694)      (23,657)    (32,299)
      Miscellaneous           (1,240)        1,758        (1,644)      2,544

        Total Other Income    63,251        47,148       173,015     126,616

    INCOME (LOSS) BEFORE
      INCOME TAXES            41,219       530,339      (151,257)  1,169,660

    PROVISION (BENEFIT)
      FOR INCOME TAXES        13,675       169,700       (50,525)    375,563

    NET INCOME (LOSS)        $27,544      $360,639     $(100,732)   $794,097

    EARNINGS (LOSS) PER SHARE:
      Primary and Fully
        Diluted                $0.01         $0.09        $(0.03)      $0.19

    BASIC SHARES
      OUTSTANDING          4,015,536     3,969,040     4,009,103   3,952,326

    DILUTED SHARES
      OUTSTANDING          4,050,893     4,192,019     4,087,188   4,106,013


                           SELECTED BALANCE SHEET DATA

                                           As of            As of
                                       November 30,     February 28,
                                           1998             1998

    Cash and marketable securities       6,049,430        5,124,467
    Current Assets                      12,858,132       12,882,143
    Total Assets                        15,590,972       15,801,237
    Current liabilities                  2,623,831        2,645,722
    Long-term obligations                  331,005          427,174
    Shareholders' equity                12,391,756       12,434,793

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