MUNDELEIN, Ill., Oct. 15 /PRNewswire/ -- Bio-logic Systems Corp.
(Nasdaq: BLSC), a designer and marketer of computerized medical
electro-diagnostic equipment, today reported results for the fiscal 1999
second quarter and six months ended August 31, 1998.  Operating performance
continues to be significantly impacted by the Asian economic crisis as well as
the temporary refocusing of the company's strategies toward completing ISO
9000 certification and converting all DOS-based products to the Windows 95
platform.
    With the recent completion of ISO 9000 and CE Mark certification, the
expected conversion of all product software by fiscal year-end, and the
continuation of new and updated product introductions, Bio-logic is
building a foundation for gradually improving sales worldwide over the long
term.
    "This has been a challenging six months for our company," said Dr. Gabriel
Raviv, president and chief executive officer.  "Sales to foreign markets,
which now represent 15 percent of total sales, remain depressed due to the
unstable economy in Asia and South America.  Further, the Asian crisis is
delaying the decision-making process in other countries as a result of
uncertain currency exchange rates.  In the U.S., sales were impacted as
deliveries of our Windows-based EEG products didn't begin until October.  And
finally, while we are pleased to have achieved our goal of ISO 9000
certification and anticipate greater sales opportunities in Europe as a
result, costs associated with this compliance severely impacted our bottom
line during the second quarter."
    Total sales for the second quarter were $4.4 million compared with $4.3
million last year.  The company reported net income for the three months of
$89,687, or $0.02 per diluted share, compared with $208,480, or $0.05 per
diluted share, a year ago.  The decrease in net income resulted from higher
selling, general and administrative (SG&A) costs related to increased
resource requirements to implement CE Mark and ISO 9000 certification.  These
costs included a one-time ISO charge of $100,000 in the fiscal 1999 second
quarter.
    International sales for the second quarter were $678,425 versus $530,244
in the comparable fiscal 1998 quarter.  Due to a timing issue in the first
half of last year, the majority of orders placed were actually shipped in the
first quarter, substantially reducing the amount of sales recorded for last
year's second quarter.  Therefore, the increase in international sales
quarter-over-quarter is related to a timing issue rather than any notable
improvement in conditions overseas.
    For the six months ended August 31, 1998, Bio-logic reported net sales of
$8.1 million compared with $8.8 million last year.  Net loss was $128,276, or
$0.03 per diluted share, compared with net income of $433,459, or $0.10 per
diluted share, for the six months a year earlier.  The primary reasons for
this decrease were a decline in international sales of 33 percent from a
year ago, and the increase in SG&A expenses attributed to ISO 9000 compliance.
Also, research and development expenses increased 21 percent related to new
product development and the conversion of all product software to the Windows
95/NT operating system.
    As recently announced, the company received ISO 9001 and European
Medical Device Directive (MDD) certifications for its full Quality Management
System.  The European Communities require certification to the MDD if a
company wants to sell in those countries.  As a result of this certification,
Bio-logic is now positioned to ramp-up sales in Europe.
    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.  In addition to the audiology specialist market, the
company is focused on expanding its distribution network for AuDX to penetrate
the general practitioner and pediatric markets.  A distribution agreement with
McKesson General Medical (NYSE: MCK), one of North America's largest
distributors of healthcare products, was announced in late September.
McKesson has already begun offering AuDX to the U.S. physicians market through
its 750 field representatives.
    Bio-logic is dedicated to educating physicians about the importance
of early hearing screening as well as providing them with the most innovative
tools to diagnose impairment.  On average, most children go undetected for
hearing disorders until they are almost three years old, according to a recent
study by the Centers for Disease Control and Prevention.  At this late stage,
these problems can be irreversible.  With AuDX, hearing loss can be detected
at birth, improving patients' chances for normal speech and learning function.
    This topic is generating increasing amounts of awareness nationally with
the "Today" Show airing a segment outlining the benefits of screening and the
consequences of delayed diagnosis.  Additionally, prime time's hit television
drama, "ER," is running an ongoing story line about a child with hearing loss,
the screening process and prognosis.  Also in support of early detection,
Massachusetts, California, Virginia and West Virginia have recently adopted
legislation requiring universal hearing testing for newborns.  Utah, Colorado,
Mississippi, Connecticut, Hawaii, and Rhode Island already have mandatory
newborn screening in place.  Similar legislation is pending in 17 other states
and the trend is gaining momentum.  This growing awareness is creating
increasing sales opportunities for Bio-logic's hearing screening products.
    Bio-logic financial position remains strong.  The company's cash and
marketable securities increased to $5.8 million as of August 31, 1998,
compared with $5.1 million as of February 28, 1998.  Debt was a modest 3
percent of capitalization, and the current ratio was 5.5.
    "Our long-term outlook for growth remains optimistic.  While the Asian
economic crisis will continue to affect our ability to successfully market
products overseas, we have had strong indications from several countries that
demand for our products has not weakened.  Many international customers are
taking a wait and see attitude before placing orders, but we see significant
opportunities to expand our global position once that environment stabilizes,"
said Raviv.
    "Domestically, with the release of Ceegraph 4, our neurological diagnostic
module, we now are offering the first Windows 95 digital EEG system, which can
be seamlessly expanded to integrate all EEG needs, including routine tests,
ambulatory recordings and epilepsy monitoring.  We expect to rollout our
Windows-based Sleepscan system, for diagnosis of sleep disorders, in the
fiscal 1999 fourth quarter.  These developments should shorten the sales cycle
of pending business and increase sales of both product lines in the coming
months."
    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 SIX MONTHS ENDED

                           August 31,   August 31,   August 31,   August 31,
                              1998       1997          1998         1997

    NET SALES           $4,361,167   $ 4,346,349   $8,068,481    $8,755,030

    COST OF SALES        1,364,980     1,404,592    2,592,134     2,867,522

      Gross Profit       2,996,187     2,941,757    5,476,347     5,887,508

    OPERATING EXPENSES:
      Selling, general
       & administrative  2,288,705     2,047,330    4,328,366     4,126,570
      Research
       & development       628,019       629,122    1,450,222     1,201,085

        Total Operating
          Expenses       2,916,724     2,676,452    5,778,588     5,327,655

    OPERATING INCOME (LOSS) 79,463       265,305     (302,241)      559,853


    OTHER INCOME (EXPENSE):
     Interest Income        63,705        51,643      128,357       100,287
     Interest expense       (8,839)       (9,440)     (18,189)      (21,605)
     Miscellaneous             458           (15)        (403)          787

       Total Other Income   55,324        42,188      109,765        79,469

    INCOME (LOSS) BEFORE
     INCOME TAXES          134,787       307,493     (192,476)      639,322

    PROVISION (BENEFIT)
     FOR INCOME TAXES       45,100        99,013      (64,200)      205,863

    NET INCOME (LOSS)      $89,687      $208,480    $(128,276)     $433,459

    EARNINGS (LOSS) PER SHARE:
     Primary and Fully
      Diluted                $0.02         $0.05       $(0.03)        $0.10

    BASIC SHARES
     OUTSTANDING         4,023,184     3,944,712    4,005,888     3,943,968

    DILUTED SHARES
     OUTSTANDING         4,115,047     4,110,197    4,144,381     4,063,010

                           SELECTED BALANCE SHEET DATA

                                  As of                  As of
                                 August 31,           February 28,
                                   1998                   1998

    Cash and marketable
     securities                 5,777,767               5,124,467
    Current Assets             12,451,694              12,882,143
    Total Assets               15,264,778              15,801,237
    Current liabilities         2,265,619               2,645,722
    Long-term obligations         355,871                 427,174
    Shareholders' equity       12,349,740              12,434,793

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