PLC Systems Reports Profitable Fourth Quarter

PLC Systems Reports Profitable Fourth Quarter
-- Fourth Quarter Revenues of $2.3 Million the Highest in 2004 -- 


FRANKLIN, Mass., March 3  /PRNewswire-FirstCall/ -- PLC Systems Inc. (AMEX:
PLC), a worldwide leader in cardiac laser technologies, today reported
financial results for the three months and year ended December 31, 2004.  The
Company also announced that it earned a quarterly profit for the first time
since the fourth quarter of 2003.

Total revenues for the fourth quarter of 2004 were $2,262,000 compared with
$2,335,000 for the fourth quarter of 2003.  Fourth quarter net income for the
quarter ended December 31, 2004 increased by $130,000 to $204,000, or $0.01 per
share, compared to net income of $74,000, or $0.00 per share, for the quarter
ended December 31, 2003.  Fourth quarter results were positively impacted by
the initial shipments of the Optiwave 980 Cardiac Laser Ablation Systems to
Edwards Lifesciences (NYSE:EW) as well as a $56,000 reduction in accrued
liabilities for past clinical trial obligations no longer deemed necessary. 
The fourth quarter of 2003 included a non-recurring charge of $257,000 related
to the liquidation of the Company's Swiss subsidiary.

Total revenues for the year ended December 31, 2004 were $7,573,000 compared to
total revenues of $8,334,000 for the year ended December 31, 2003. The net loss
for 2004 was $833,000, or $.03 per share, compared to net income of $517,000,
or $.02 per share, for the year ended December 31, 2003.  During the year, PLC
improved its cash position by approximately $3.3 million and ended 2004 with
cash and cash equivalents totaling approximately $9.7 million. The improved
cash position resulted from a payment of $4.5 million from Edwards in February
2004.

"Throughout 2004 we continued to execute our strategic plan to invest in new
products that will address unmet clinical needs in select cardiac and vascular
related markets," stated Mark R. Tauscher, president and chief executive
officer of PLC Systems.  "Our research and development initiatives serve as the
foundation to diversify and grow the Company's revenues beyond TMR.  The
exclusive manufacturing rights to the Optiwave 980, PLC's first strategic move
to expand its product portfolio, were obtained through a second partnership
with Edwards in the first quarter of this year.  We are pleased to report that
PLC's fourth quarter results benefited from revenue generated from the initial
shipments of the Optiwave 980 lasers."

  PLC 2004 highlights include:
   * In the first quarter, the Society of Thoracic Surgeons (STS) issued TMR
     practice guidelines.
   * In the first quarter, PLC and Edwards entered into an exclusive, multi
     year agreement to develop and manufacture the Optiwave 980 Cardiac
     Laser Ablation System.
   * In the first quarter, PLC and Edwards modified their existing TMR
     relationship, which included lengthening the term of the distribution
     agreement and adjusting the domestic TMR disposable kit revenue sharing
     arrangement, in exchange for an upfront payment of $4.5 million from
     Edwards to PLC.
   * In the third quarter, Medicare Coverage Advisory Committee (MCAC)
     reviewed the clinical data that supports the use of TMR.  The agency
     has indicated that it has no plans to alter the coverage policy.
   * In the fourth quarter, PLC started manufacturing and shipping Optiwave
     980 lasers to Edwards to be used in clinical evaluations.
   * In the fourth quarter, PLC generated a profit for the quarter.



In the first quarter of 2004, PLC and Edwards entered into an exclusive,
multi-year agreement to develop and manufacture the Optiwave 980 system.
Edwards will market and distribute the Optiwave 980 worldwide.  Currently,
Edwards is performing ongoing clinical evaluations of the Optiwave 980 system,
which includes both lasers and handpieces.  During the initial evaluation phase
Edwards identified performance enhancement opportunities.  Edwards and PLC will
implement and complete these enhancements before Edwards initiates the full
marketing launch for the Optiwave 980.  During 2004 Edwards built an inventory
of Optiwave 980 disposable handpieces.  Edwards believes that this inventory
will be sufficient to conduct the clinical evaluations.  As a result, PLC now
expects to begin manufacturing Optiwave disposable handpieces in the second
half of 2005.

Tauscher concluded, "Expanding our product portfolio, growing our revenues,
achieving sustainable profitability, and increasing shareholder value are PLC's
primary goals.  During 2005 we will continue to invest in our new growth
initiatives and we expect these investments will keep us in a net loss position
for the year.  We do believe these new initiatives will serve as the catalyst
for future revenue growth and profitability for PLC."

During the fourth quarter of 2004, six next-generation CO2 Heart Lasers (HL2)
were delivered to United States hospitals through Edwards.  PLC ended the
fourth quarter of 2004 with 171 CO2 Heart Lasers located at heart centers
throughout the U.S., comprised of 124 HL2 customers and 47 HL1 customers.

During the fourth quarter of 2004, a total of 483 disposable kits were shipped
to hospitals worldwide.  Edwards Lifesciences delivered 457 of these disposable
kits to United States hospitals and PLC shipped an additional 26 disposable
kits to international hospitals.  A total of 476 disposable kits were delivered
worldwide during the fourth quarter of 2003.

In conjunction with announcing its fourth quarter results, PLC Systems will be
hosting a conference call today, March 3, at 11:00 a.m. Eastern Time. The call
may be joined via telephone by dialing [phone] at least five minutes
prior to the start of the call.  The passcode is: 20899622.  A live Webcast of
the call will be available and accessible at the investor relations section of
the Company's website at http://www.plcmed.com/.  A recording of the conference
call will be available for the next month on PLC's website.

This press release contains "forward-looking" statements.  For this purpose,
any statements contained in this press release that relate to prospective
events or developments are deemed to be forward-looking statements.  Words such
as "believes," "anticipates," "plans," "expects," "will" and similar
expressions are intended to identify forward-looking statements.  While we may
elect to update forward-looking statements in the future, we specifically
disclaim any obligation to do so, even if our estimates change, and you should
not rely on these forward-looking statements as representing our views as of
any date subsequent to the date of this press release.  Actual results could
differ materially from those indicated by such forward-looking statements as a
result of a variety of important factors, including we may be unable to
successfully develop new products in our efforts to diversify beyond TMR, we
may be unsuccessful in our efforts to develop products under our new agreement
with Edwards and Edwards may be unsuccessful in distributing these products,
operational changes, competitive developments may affect the market for our
products, regulatory approval requirements may affect the market for our
products, we may be unable to convince health care professionals and third
party payers of the medical and economic benefits of the CO2 Heart Lasers and
the Optiwave 980 System, and there can be no assurance that all payers will
reimburse health care providers who perform TMR procedures or that
reimbursement, if provided, will be adequate, and additional risk factors
described in our Quarterly Report on Form 10-Q for the quarter ended September
30, 2004, and our other SEC reports.

                             PLC SYSTEMS INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)


                         Three Months Ended              Year Ended
                            December 31, *              December 31, *
                           2004         2003         2004         2003
  Revenues:
      Product sales       $1,876       $2,015       $5,982       $6,899
      Placement and service
        fees                 386          320        1,591        1,435
          Total revenues   2,262        2,335        7,573        8,334

  Cost of revenues:
      Product sales          802          927        2,346        2,824
      Placement and service
        fees                 204          144          723          519
          Total cost of
            revenues       1,006        1,071        3,069        3,343

  Gross profit             1,256        1,264        4,504        4,991

  Operating expenses:
      Selling, general and
        administrative       587          719        3,329        3,297
      Research and
        development          469          236        2,130          980
      Total operating
        expenses           1,056          955        5,459        4,277

  Income from operations     200          309        (955)          714

  Other income (expense):
      Liquidation of
        subsidiary: Foreign
        currency loss          -        (257)            -        (257)
      Other income, net       37           22          175           60

  Income (loss) before
    income taxes             237           74        (780)          517
  Provision for income
    taxes                     33            -           53            -
  Net income (loss)         $204          $74       $(833)         $517

  Basic and diluted
    earnings
    (loss) per share       $0.01        $0.00     $ (0.03)        $0.02

  Average shares
    outstanding:
      Basic               30,062       29,860       30,025       29,826
      Diluted             30,802       31,294       30,025       30,414


                         CONDENSED BALANCE SHEET
                                                 December 31,  December 31,
                                                    2003 *         2004 *
  Cash and cash equivalents                         $9,678         $6,377
  Total current assets                              12,787          9,367
  Total assets                                      13,327          9,849
  Total current liabilities                          2,129          1,962
  Shareholders' equity                               6,829          7,556

  Contact:
   John Jordan
   Director of Investor Relations
   508-541-8800, ext. 145


DATASOURCE: PLC Systems Inc.



CONTACT:  John Jordan, Director of Investor Relations, [phone],

ext. 145



Web site:  http://www.plcmed.com/

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