Birtcher Medical, IRVINE

Nature of Business: Manufactures and markets advanced surgical products.

Total employees: 203

In Orange County: 143

Stock listing in The Times: On NASDAQ as “Birtchr”

Ticker Symbol: “BIRT”

Friday’s Close: $6

One-week Change: Down $0.13

Analyst Review: “Birtcher Medical is one of the top companies in electrosurgery. Its Argon Beam Coagulator is probably the best on the market. It coterizes or coagulagulates blood in surgical procedures and reduces blood loss. Birtcher has well over 1,000 ABCs in the field, and ships hundreds every year. Valleylab sued Birtcher over alleged patent infringments in March, and that hurt its earnings. The suit was resolved last month. Valleylab agreed to pay Birtcher a one-time license fee of $2.5 million and a 5% royalty on all present and future sales of argon gas products sold by Valleylab though 2005. We think the stock is undervalued. We estimate earnings of 53 cents per share in 1993 and have a buy on the stock.”

--John Girton, analyst, Van Kasper & Co., San Francisco

Revenue and Profits

Dollar amounts in millions

Fiscal year ending June 30 June 30 June 30 June 30 June 30 1988 1989 1990 1991* 1992 Net Sales $6.0 $6.9 $18.3 $50.2 $52.4 Net Profit (Loss) $.701 $.946 $.031 $6.3 ($1.2)

Corporate Outlook: “With the settlement of the Valleylab lawsuit, Birtcher’s argon gas technology has once again been endorsed. An analyst estimates our agreement with Valleylab--including the $2.5 million license fee and the 5% royalties--to be worth between $15 and $20 million to our stockholders over the life of the license. The most important thing to Birtcher is our Argon Beam Coagulator technology. It not only has broad applications in open surgery, but also in minimally-invasive surgery.”

--William E. Maya, president/CEO

5-YEAR SUMMARY: RETURN ON STOCKHOLDER INVESTMENT

Fiscal year ending June 30 June 30 June 30 June 30 1988 1989 1990 1991 2-Week High $3.38 $3.38 $5.25 $15.00 52-Week Low $2.13 $2.63 $2.25 $4.25 Book Value $2.33 $2.76 $2.71 $3.18 Price Per Share $3.25 $2.69 $5.25 $11.00 Net Earnings (Loss) Per Share $0.16 $0.20 ($0.11) $0.81 Price-to-Earnings Ratio 20:1 13:1 N/A 14:1 Avg. Return to Investor 14% 16% N/A 25%

Fiscal year ending June 30 1992 2-Week High $22.25 52-Week Low $4.63 Book Value $2.46 Price Per Share $7.25 Net Earnings (Loss) Per Share ($0.14) Price-to-Earnings Ratio N/A Avg. Return to Investor N/A

* Restated figures. A significant portion of the sales gain was due to the acquisition of Solos Endoscopy late last year.

Source: Birtcher Medical Systems

For more information call or write, Birtcher Medical Systems: 50 Technology Drive, Irvine, Calif. 92718. (714) 753-9400