MENLO PARK, Calif., Oct. 22 /PRNewswire/ -- Perclose, Inc. (Nasdaq: PERC)
reported record results for the second fiscal quarter and six months ended
September 30, 1998.  For the September quarter, revenues were $9.1 million, up
from $8.4 million in the June 1998 quarter and up over seven-fold from the
$1.2 million reported in the same quarter a year ago.  The sequential increase
in revenues is a result of higher sales volume primarily in the United States,
with Food and Drug Administration (FDA) approvals in late 1997 accounting for
the higher sales performance in the year over year period.
    Net income in the September quarter was $755,000, an increase of 167
percent over net income of $283,000 in the previous quarter and compared with
a net loss of $4.4 million for the September 1997 quarter.  Diluted earnings
per common share were $0.07 in the September 1998 quarter versus diluted
earnings of $0.02 per common share in the June 1998 quarter and a loss of
$0.45 per common share in the September 1997 quarter.  Shares used in
calculating diluted earnings/loss per share were 11.3 million in the September
1998 quarter, 11.4 million in the June 1998 quarter and 9.6 million in the
year ago quarter.
    For the six months ended September 30, 1998, revenues were $17.5 million,
up from $2.4 million reported in the same period a year ago.  Net income in
the six month period was $1.0 million compared with a net loss of $8.4 million
for the September 1997 six month period.  Diluted earnings per common share
were $0.09 for the six month period ended September 30, 1998 versus a loss of
$0.87 per common share in the September 1997 six month period.  Shares used in
calculating diluted earnings/loss per share were 11.4 million in the September
1998 six month period versus 9.6 million in the year ago six month period.
    Hank Plain, Perclose's president and chief executive officer, commented,
"Our Prostar(R) and Techstar(R) product lines continue to be well received by
cardiologists and radiologists, fueling the record sales growth in the
quarter.  The annualized size of the closure market is now well over
$100 million, growing rapidly and still in the early stages of product
adoption.  Recent clinical studies and hospital cost analyses have shown that
our products deliver significant clinical, economic and patient care benefits.
This independent verification of Perclose's product benefits is very
encouraging."
    Mr. Plain continued, "We are pleased with the continuing improvement of
our financial performance.  In addition to more than doubling net income from
the June quarter, we increased revenue and gross margin for the fifth straight
quarter.  Over the five full quarters that the Prostar, Prostar XL and
Techstar XL products have been on the market in the United States, revenue has
grown at a compounded rate of 50 percent per quarter.  In addition, our
balance sheet is strong with just under $30 million in cash and investments,
no long term debt and modest cash needs for the foreseeable future."
    Also during the quarter, the company successfully completed initial human
clinical testing of its Heartflo(TM) distal anastomosic device in coronary
artery bypass graft (CABG) procedures.  The Heartflo device automates the
surgical connection (anastomosis) of blood vessels during CABG procedures.
    Perclose, based in Menlo Park, Calif., designs, manufactures and markets
less invasive medical devices that automate the surgical closure or connection
of blood vessels.  The Prostar and Techstar products, marketed in the U.S. and
internationally, surgically close the arterial access site in the femoral
artery following catheterization procedures such as angioplasty, stenting,
atherectomy and diagnostic angiography.  These patented, proprietary products
offer superior clinical treatment, more rapid recovery and a more
cost-effective alternative to the standard method of closing arterial access
sites.  The Heartflo(TM) System, which automates the surgical connection of
blood vessels during conventional and minimally invasive coronary artery
bypass surgery, is in human clinical testing.  Perclose common stock is traded
on the Nasdaq National Market under the symbol PERC.
    Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements that involve
risk and uncertainties, including the risk that new products may not prove to
be safe or effective in clinical trials, risks associated with receipt and
timing of regulatory approvals, including approvals to conduct clinical trials
and to commercially market products, market acceptance of new products, risks
of adverse determinations in litigation relating to patents and intellectual
property rights, risks associated with manufacturing scale-up and increases in
production volumes, risks associated with product recalls and the management
of growth.  For further information, refer to the risk factors in the most
recent periodic filings with the Securities and Exchange Commission.

                                  PERCLOSE, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands except per share amounts)
                                   (Unaudited)

                                     Three Months Ended     Six Months Ended
                                        September 30,        September 30,
                                         1998      1997      1998      1997

    Net revenues                       $9,123    $1,210   $17,487    $2,380
    Cost of goods sold                  3,270     1,797     6,460     3,250
    Gross margin                        5,853      (587)   11,027      (870)

    Operating expenses:
    Research and development            1,883     1,291     3,512     2,525
    Selling, general and administrative 3,629     2,735     7,262     5,581

    Total operating expenses            5,512     4,026    10,774     8,106

    Income (loss) from operations         341    (4,613)      253    (8,976)

    Interest income, net                  453       257       839       613

    Income (loss) before income taxes     794    (4,356)    1,092    (8,363)
    Provision for income taxes             39         -        54         -

    Net income (loss)                    $755   ($4,356)   $1,038   ($8,363)

    Basic earnings (loss) per
     common share                       $0.07    ($0.45)    $0.10    ($0.87)

    Diluted earnings (loss) per
     common share                       $0.07    ($0.45)    $0.09    ($0.87)

    Shares used in computing basic
     earnings (loss) per share         10,817     9,617    10,785     9,598

    Shares used in computing diluted
     earnings (loss) per share         11,271     9,617    11,339     9,598

                           CONSOLIDATED BALANCE SHEETS
                                  (In thousands)

                                September 30, March 31,
                                         1998     1998*
                                  (unaudited)
                     ASSETS
    Current assets:
      Cash, cash equivalents and
       short-term investments         $29,863   $31,581
      Accounts receivable, net          4,361     3,455
      Inventories                       1,907     1,619
      Prepaid expenses                    511       628
        Total current assets           36,642    37,283

      Equipment and leasehold
       improvements, net                2,781     2,277
    Other assets                        2,461       891
    Total assets                      $41,884   $40,451

        LIABILITIES AND STOCKHOLDERS' EQUITY

    Total current liabilities          $3,312    $3,509

    Total stockholders' equity         38,572    36,942

    Total liabilities and
     stockholders' equity             $41,884   $40,451

    *Derived from audited financial statements.

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