MUNDELEIN, Ill., July 15 /PRNewswire/ -- Bio-logic Systems Corp.
(Nasdaq: BLSC), a designer and marketer of computerized medical
electro-diagnostic equipment, today reported fiscal 1999 first quarter results
for the period ended May 31, 1998.   While the company's new hearing screening
product, AuDX(TM), which is primarily targeted at the $300 million
office-based physician market, made substantial progress during the quarter,
the recent three months were adversely impacted by the effects of the Asian
monetary crisis on international demand.
    International sales for the first quarter, which now represent 15 percent
of total sales, decreased to $554,760 from $1.3 million in the comparable
fiscal 1998 quarter.  Although sales in some important markets in Asia appear
stable as compared with first quarter 1998, many key growth markets there
eliminated spending on diagnostic equipment during the first quarter and for
the coming nine months as a result of the unstable economy.  This is
especially significant because some of these markets purchased record numbers
of systems in last year's comparable quarter.  In addition, the Asian crisis
is delaying the decision-making process in other countries due to uncertain
currency markets.
    "While several issues are delaying the buying decisions abroad, the most
notable being the economic difficulty in Asia, we have good indications that
demand for our cost efficient, modular diagnostic systems remains strong,"
said Gabriel Raviv, president and chief executive officer.  "We believe that
if the problems in Asia do not escalate any further, we should be able to
capitalize on our strong pipeline and existing opportunities to expand our
business in markets such as Mexico, China and Brazil."
    Total sales for the first quarter fell to $3.7 million from $4.4 million
in the previous year as a result of the significant international sales
decline.  The company reported a net loss for the three months of $217,963,
$0.05 per diluted share, compared with net income of $224,978, or $0.06 per
diluted share, a year ago.  The net loss was impacted primarily by the reduced
sales and a 31 percent increase in research and development expenses related
to new product development and the conversion of all product software to the
Windows 95/NT operating systems.
    The new guidelines for CE Mark endorsement in Europe, instituted last
month, require companies to have ISO 9000 certification to market their
products.  Bio-logic is scheduled to be audited for ISO 9000 certification
later this month, and expects to be certified shortly thereafter.  This will
enable it to ramp-up sales in Europe. The resources needed to implement CE
Mark and ISO 9000 certification resulted in an increase in SG&A for the first
quarter, and the company expects they will impact SG&A expenses in the second
quarter as well.
    In the U.S., sales were relatively flat for the quarter as customers
anticipated the availability of Bio-logic's next generation Windows-based
products.  Subsequent to the close of the quarter, the company introduced a
Windows-compatible version of its Ceegraph system for neurological testing and
expects to rollout its Windows-based diagnostic system for sleep disorders in
the third quarter.
    According to Raviv, the medical market's slowdown, resulting from managed
care pressures, also affected domestic buying levels last quarter.  However,
Bio-logic has positioned itself to compete for an increasing share of the
cost-conscious diagnostic marketplace by creating modular systems that respond
to several key initiatives of managed care, including the emphasis on lower-
cost, outpatient services; the drive to maximize staff efficiency; and the
optimization of computer hardware utilization.
    Unit sales of Bio-logic's newest audiology product, AuDX, that addresses
the healthcare market's need for regular hearing screening for infants,
children and adults, also rose significantly.  While AuDX is still in the
early stages of introduction, progress has been made to penetrate the general
practitioner and pediatric markets -- a new opportunity for the company that
is much larger than the newborn screening market and more than of all its
niche specialist markets combined.  Currently, AuDX is being sold through a
growing distribution network and the company plans to supplement that effort
with internal sales representation.   Bio-logic continues to support sales of
AuDX by leveraging mandatory hearing screening legislation, physician
testimonials, favorable studies published on the effects of early detection,
and growing media exposure on the benefits of regular screening.
    "Going forward, we will continue to focus on building awareness and
increasing sales of AuDX.  Over the long term, we expect AuDX to be a notable
contributor to top-line growth.  In the near term, we are operating in a
difficult environment, especially overseas.  While we are very disappointed
with our recent results and their certain impact on overall performance for
the year, we remain confident that the strategies that drove our record
performance in fiscal 1998 -- improving the productivity of our sales force,
expanding our international presence, penetrating new customer markets, and
continuing our investments in research and development -- will put us back on
track once external factors improve," said Raviv.
    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; risks associated with international operations
including monetary crisis; regulatory, competitive, and contractual risks; the
effects of economic conditions; any delays or additional costs associated with
the introduction of the AuDX product; 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., headquartered in Mundelein, Ill., designs,
develops, assembles and markets computer-based electrodiagnostic 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.

                   BIO-LOGIC SYSTEMS CORP. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)

                                       Three Months Ended
                                  1998                    1997

    NET SALES                  $3,707,314              $4,408,680
    COST OF SALES               1,227,154               1,462,929

      Gross Profit              2,480,160               2,945,751

    OPERATING EXPENSES:
    Selling, General, and
      Administrative            2,114,661               2,079,240
    Research and Development      747,203                 571,963

        Total Operating
         Expenses               2,861,864               2,651,203

    OPERATING INCOME (LOSS)      (381,704)                294,548

    OTHER INCOME (EXPENSE):
      Interest Income              64,652                  48,644
      Interest Expense             (9,350)                (12,166)
      Miscellaneous                  (861)                    802

    INCOME (LOSS) BEFORE
      INCOME TAXES               (327,263)                331,828

    PROVISION (BENEFIT)
      FOR INCOME TAXES           (109,300)                106,850

    NET INCOME (LOSS)            (217,963)                224,978


    EARNINGS (LOSS) PER SHARE:
      Basic and Diluted            ($0.05)                  $0.06


    Basic Shares Outstanding    3,988,592               3,943,224
    Diluted Shares Outstanding  3,988,592               4,061,612


                           SELECTED BALANCE SHEET DATA

                                  1998                    1997
    Cash and marketable
      securities               $5,170,002              $4,317,366
    Current Assets             12,072,670              11,287,008
    Total Assets               14,946,999              14,154,977
    Current Liabilities         2,023,727               1,862,069
    Long-Term Obligations         391,818                 529,792
    Shareholders' Equity       12,237,906              11,424,718

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