<PAGE>   1
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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                    FORM 10-Q

           (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                     For the quarter ended December 31, 1998

                         Commission File number 0-21727


                               SeaMED Corporation
--------------------------------------------------------------------------------
             (Exact Name of Registrant as specified in its charter)

                   Washington                         91-1002092
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            (State of Incorporation)               (Federal I.R.S. No.)

14500 Northeast 87th Street, Redmond, Washington      98052-3431
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(Address of principal executive offices)               Zip Code)

                   Registrant's Telephone Number 425-867-1818
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     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes (X) No ( )

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     As of February 10, 1999, the Registrant had 5,538,610 shares of Common
Stock outstanding.

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                    DOCUMENTS INCORPORATED BY REFERENCE: None

<PAGE>   2

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS



                               SeaMED CORPORATION

                              FINANCIAL STATEMENTS


INDEX

<TABLE>
<S>                                                                           <C>
Balance Sheets as of December 31, 1998 and June 30, 1998.......................3

Statements of Income for the Quarters and the Six Months 
    Ended December 31, 1998 and 1997...........................................4

Statements of Cash Flows for the Six Months 
    Ended December 31, 1998 and 1997...........................................5

Notes to Financial Statements..................................................6
</TABLE>



                                      -2-
<PAGE>   3

                               SeaMED CORPORATION
                                 BALANCE SHEETS
                                   (Unaudited)

ASSETS
<TABLE>
<CAPTION>
                                                     December 31,            June 30,
                                                         1998                  1998
                                                     ------------          ------------
<S>                                                  <C>                   <C>
Current assets:
   Cash and cash equivalents.....................    $  8,543,721          $  6,428,718
   Accounts receivable, net......................      14,435,473            13,189,092
   Inventories...................................      11,781,713            15,185,517
   Deferred income taxes.........................       1,733,348             1,733,348
   Prepaid expenses..............................         390,481               223,370
                                                     ------------          ------------
Total current assets.............................      36,884,736            36,760,045

Property and equipment, net......................       6,118,800             5,162,172
Deposits and other assets........................         292,921               934,337
                                                     ------------          ------------
Total assets.....................................    $ 43,296,457          $ 42,856,554
                                                     ============          ============

LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities:
   Accounts payable..............................    $  2,564,848          $  4,323,740
   Accrued expenses and reserves.................       4,233,929             5,029,410
   Customer deposits on inventory................       1,814,109             2,576,916
   Current portion of long-term debt.............       1,012,743               558,144
                                                     ------------          ------------
Total current liabilities........................       9,625,629            12,488,210

Long-term debt, less current portion.............       3,275,847             2,435,021


Shareholders' equity:
   Common stock..................................      21,166,685            20,723,960
   Note receivable from officer..................         (75,000)              (75,000)
   Retained earnings.............................       9,303,296             7,284,363
                                                     ------------          ------------
Total shareholders' equity.......................      30,394,981            27,933,323
                                                     ------------          ------------
Total liabilities and shareholders' equity.......    $ 43,296,457          $ 42,856,554
                                                     ============          ============
</TABLE>


                See accompanying notes to financial statements.



                                      -3-
<PAGE>   4

                               SeaMED CORPORATION
                              STATEMENTS OF INCOME
                                   (Unaudited)


<TABLE>
<CAPTION>
                                            Quarter Ended                    Six Months Ended
                                   ----------------------------       ---------------------------
                                   December 31,    December 31,       December 31,   December 31,
                                      1998             1997              1998            1997
                                   ------------    ------------       ------------   ------------
<S>                                <C>             <C>                <C>            <C>
Revenues:
  Manufacturing..................  $12,957,214     $ 9,651,572        $25,447,424    $20,014,210
  Engineering....................    5,928,306       6,607,856         12,814,516     12,275,009
                                   -----------     -----------        -----------    -----------
                                    18,885,520      16,259,428         38,261,940     32,289,219

Costs of revenues:
  Manufacturing..................   11,148,125       7,797,185         21,372,526     16,175,257
  Engineering....................    5,315,924       5,691,724         11,430,115     10,611,888
                                   -----------     -----------        -----------    -----------
                                    16,464,049      13,488,909         32,802,641     26,787,145
                                   -----------     -----------        -----------    -----------
Gross margin.....................    2,421,471       2,770,519          5,459,299      5,502,074

Marketing, general and
  administrative expenses........    1,078,191       1,373,340          2,410,594      2,750,322
                                   -----------     -----------        -----------    -----------
Operating income.................    1,343,280       1,397,179          3,048,705      2,751,752

Other income (expense):
  Interest expense...............      (83,291)         (8,154)          (146,856)       (24,264)
  Interest and other income, net.       87,819          45,290            157,141         80,837
                                   -----------     -----------        -----------    -----------
                                         4,528          37,136             10,285         56,573
                                   -----------     -----------        -----------    -----------
Income before income taxes.......    1,347,808       1,434,315          3,058,705      2,808,325

Income tax provision.............      458,255         487,667          1,040,057        954,831
                                   -----------     -----------        -----------    -----------
Net income.......................  $   889,553     $   946,648        $ 2,018,933    $ 1,853,494
                                   ===========     ===========        ===========    ===========

Net income per share data:
  Basic..........................  $      0.16    $       0.18       $       0.37   $       0.35
                                   ===========     ===========        ===========    ===========
  Diluted........................  $      0.16    $       0.17       $       0.36   $       0.33
                                   ===========     ===========        ===========    ===========
</TABLE>


                See accompanying notes to financial statements.


                                      -4-
<PAGE>   5

                               SeaMED CORPORATION
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                            Six Months Ended
                                                              December 31,
                                                     ---------------------------
                                                         1998            1997
                                                     -----------     -----------
<S>                                                  <C>             <C>
OPERATING ACTIVITIES
Net income.........................................  $ 2,018,933     $ 1,853,494
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
  Depreciation.....................................    1,168,405         805,414
  Provision for bad debts..........................       29,482          72,344
  Deferred tax benefit.............................           --        (363,480)
  Changes in operating assets and liabilities:
    Increase in accounts receivable................   (1,275,863)     (2,461,725)
    Decrease (Increase) in inventories.............    3,403,804      (2,194,967)
    Increase (Decrease) in accounts payable,
      accrued expenses, and customer deposits......   (3,317,180)      1,586,634
    Decrease (Increase) in other assets and        
      prepaid expenses.............................      474,303        (279,134)
                                                     -----------     -----------
Net cash provided by (used in) operating activities    2,501,884        (981,420)

INVESTING ACTIVITIES
Purchases of equipment and leasehold improvements..   (2,125,032)     (1,624,839)
Maturity of short-term investments.................           --       2,226,843
                                                     -----------     -----------
Net cash provided by (used in) investing activities   (2,125,032)        602,004

FINANCING ACTIVITIES
Proceeds from stock options exercised..............       44,826          34,105
Proceeds from sale of common stock under employee                     
  stock purchase plan..............................      397,900         374,226
Net (payments of) borrowings under  credit line....           --        (525,297)
Proceeds from notes payable........................    1,500,000         625,000
Principal payments on notes payable................     (204,575)       (128,416)
                                                     -----------     -----------
Net cash provided by financing activities..........    1,738,151         379,618
                                                     -----------     -----------
Net increase in cash...............................    2,115,003             202
Cash and cash equivalents at beginning of period...    6,428,718           9,092
                                                     -----------     -----------
Cash and cash equivalents at end of period.........  $ 8,543,721     $     9,294
                                                     ===========     ===========
</TABLE>


                See accompanying notes to financial statements.


                                      -5-
<PAGE>   6

ITEM 1. NOTES TO FINANCIAL STATEMENTS

     1.   ACCOUNTING POLICIES

     Basis of Presentation

     The accompanying unaudited financial statements have been prepared by
SeaMED Corporation (the Company) in accordance with generally accepted
accounting principles for interim financial information and in accordance with
the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (which include only normal
recurring adjustments) considered necessary for a fair presentation have been
included. The balance sheet at June 30, 1998 has been derived from audited
financial statements at that date, but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. The results of operations for the six-month period ended
December 31, 1998, are not necessarily indicative of results to be expected for
the entire year ending June 30, 1999 or for any other fiscal period. For further
information, refer to the financial statements and footnotes included in the
Company's Form 10-K for the year ended June 30, 1998.

     2.   REVENUE RECOGNITION

     The Company recognizes revenues from contracts to perform engineering
design and product development as the related engineering service is performed.
When estimates indicate a probable loss on a contract, the full amount of such
loss is accrued at that time. The Company generally recognizes revenue from
manufacturing services when the related products are shipped.

     3.   RECENTLY ISSUED ACCOUNTING STANDARDS

     As of July 1, 1998, the Company adopted Statement of Financial Accounting
Standard (SFAS) No. 130, "Reporting Comprehensive Income." The adoption of SFAS
No. 130 had no impact on the Company's operating results or shareholders'
equity. For the six months ended December 31, 1998, net income and comprehensive
income were the same.

     In 1997, the Financial Standards Accounting Standards Board (FASB) issued
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," which is required to be adopted for periods beginning after
December 15, 1997. SFAS No. 131 supersedes SFAS No. 14, "Financial Reporting for
Segments of a Business Enterprise." Companies will be required to report each
operating segment and related information, as defined in SFAS No. 131, in the
notes to financial statements. The Company does not expect SFAS No. 131 
to have a significant impact on financial reporting.

     In 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which is required to be adopted for periods
beginning after June 15, 1999. 



                                      -6-
<PAGE>   7

Due to the minimal use of derivative instruments and hedging activities, the
Company does not expect the impact of SFAS No. 133 to be material.

     4.   INVENTORIES

<TABLE>
<CAPTION>
Inventories consist of the following:                December 31,      June 30,
                                                        1998             1998
                                                     -----------    -----------
<S>                                                  <C>            <C>        
Work in process                                      $ 3,102,803    $ 3,685,594
Purchased and manufactured parts                       9,789,514     12,366,257
                                                     -----------     ----------
                                                      12,892,317     16,051,851

Less inventory reserve                                 1,110,604        866,334
                                                     -----------     ----------
                                                     $11,781,713    $15,185,517
                                                     ===========    ===========
</TABLE>


     5.   NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted net income
per share.

<TABLE>
<CAPTION>
                                                        Quarter Ended         Six Months Ended
                                                         December 31,           December 31,
                                                       1998        1997       1998        1997
                                                   ---------   ---------  ---------   ---------
<S>                                                  <C>         <C>      <C>         <C>      
Numerator:
  Numerator for basic and diluted net income
  per share
   Net income as reported                            889,553     946,648  2,018,933   1,853,494
                                                   ==========  =========  =========   =========
Denominator:
  Denominator for basic net income per share--
   weighted average common shares                  5,492,586   5,283,689  5,478,927   5,276,294
                                                   ---------   ---------  ---------   ---------
  Effect of dilutive securities:
  Net effect of dilutive stock options based
   on the treasury stock method using average
   market price                                      166,628     313,532    182,725     321,369
  Net effect of dilutive stock warrants based
   on the treasury stock method using average
   market price                                            0      28,277          0      28,494
                                                   ---------   ---------  ---------   ---------
  Dilutive potential common shares                   166,628     341,809    182,725     349,863
                                                   ---------   ---------  ---------   ---------

  Denominator for diluted net income per share     5,659,214   5,625,498  5,661,652   5,626,156
                                                   ==========  =========  =========   =========
Basic net income per share                              $.16        $.18       $.37        $.35
                                                   ==========  =========  =========   =========
Diluted net income per share                            $.16        $.17       $.36        $.33
                                                   ==========  =========  =========   =========
</TABLE>



                                      -7-
<PAGE>   8

     6.   NOTES PAYABLE

     Variable Rate Note

     The Company borrowed $2.5 million during fiscal year 1998 and an additional
$1.5 million in September 1998 against an existing equipment credit facility.
Borrowings under this agreement bear interest at LIBOR plus 1.4% (6.65% at
December 31, 1998).

     Equipment Line of Credit Agreement

     In July of 1998, the Company's Board of Directors approved an equipment
line of credit up to $5.0 million. Borrowings under this facility bear interest
at LIBOR plus 1.4%. This agreement expires October 1, 2001.

     Working-Capital Line of Credit Agreement

     In July of 1998, the Company's Board of Directors approved an increase to
its existing working capital line of credit. Under this agreement the Company
can borrow up to 85% of eligible accounts receivable and 50% of eligible
inventory up to a maximum of $20.0 million. Borrowings under this agreement and
the equipment line of credit agreement are payable on demand if certain
covenants are not met. These covenants include a maximum debt-to-equity ratio of
1.25-to-1, minimum ratio of earnings before income taxes and interest of
2.0-to-1 and dividend restrictions. Borrowings under this agreement bear
interest at the bank's prime rate minus .25% or LIBOR plus 1.2%. This agreement
expires October 1, 2001. There were no borrowings outstanding under this line of
credit at December 31, 1998.

     Interest Rate Contract

     At December 31, 1998, the Company had an interest rate contract with a
notional principal amount of $4.0 million that effectively converts the $4.0
million variable rate note to a fixed rate of 7.5%.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
the Company's Financial Statements and Notes thereto included elsewhere in this
Form 10-Q. This Form 10-Q contains, in addition to historical information,
forward-looking statements, including statements regarding the Company's future
manufacturing and engineering revenues and gross margins, that involve risks and
uncertainties. The Company's actual results could differ materially from the
results discussed in the forward-looking statements. Factors that could cause
such a difference include, but are not limited to, risks that customers may
terminate or delay engineering or manufacturing contracts, customers are not
successful in marketing and selling their products, and engineering projects do
not become products that are manufactured by 



                                      -8-
<PAGE>   9

SeaMED in any significant volume. These and other factors are more fully
described in the Company's Form 10-K filed for the year ended June 30, 1998. The
Company's fiscal year consists of the 52/53-week period that ends on the
Thursday nearest to June 30. For convenience of presentation, all fiscal periods
in this report are shown as ending on a calendar month-end.

OVERVIEW

     SeaMED is a manufacturer of advanced medical instruments for medical
technology companies. SeaMED was incorporated in 1976, and since 1988 has
focused its business primarily on manufacturing medical instruments for medical
technology companies. To assist its customers in developing and commercializing
their products for manufacture by SeaMED, the Company provides a wide range of
engineering services and regulatory expertise.

     SeaMED's manufacturing contracts with its customers are usually exclusive
contracts for a fixed period of time, generally ranging from three to five
years. SeaMED negotiates each manufacturing contract independently, and each
varies as to profitability. SeaMED negotiates the price of each manufactured
instrument on a cost and margin formula. SeaMED's contracts with its customers
generally permit annual manufacturing cost audits and price renegotiations.
During the contract term, customers have broad discretion to control the volume
and timing of instrument deliveries. Consequently, SeaMED's revenues with
respect to each instrument may vary substantially from period to period, and an
instrument that generates revenues in one quarter may not necessarily generate
revenues in each quarter of a fiscal year. In addition, for a variety of reasons
such as a customer's inventory levels, sales mix and timing of product launches,
SeaMED's revenues for an instrument do not necessarily correspond to the
customer's sales.

     Manufacturing revenue growth depends primarily on two factors: increased
demand for instruments manufactured by SeaMED and SeaMED's ability to attract
additional manufacturing contracts from emerging and established medical
technology companies. SeaMED has no ability to increase demand for the
instruments it manufactures because SeaMED's customers control all product
marketing and sales. SeaMED markets its manufacturing capabilities and usually
procures additional manufacturing contracts as a result of its engineering
projects, but the volume and timing of future manufacturing revenues that relate
to any specific engineering project are highly variable, and certain engineering
projects may not lead to future manufacturing revenues. The manufacturing gross
margin percentage from year to year depends primarily on the product mix, as
gross margins vary by instrument and as a result of negotiated volume discounts.
Management may negotiate volume discounts if the larger volume results in
smaller per unit overhead allocation, thereby improving operating margin. For
manufacturing revenues from instruments not yet approved for commercial use
(known as "preproduction revenues"), the gross margin percentage is generally
lower because a smaller number of units limits opportunities to achieve
economies of scale, and the instrument and its manufacturing process are being
refined.

     SeaMED provides its customers with engineering services at any stage of an
instrument's development, as part of its strategy to obtain exclusive
manufacturing rights for an instrument. SeaMED generally provides engineering
services under a project plan that identifies the 



                                      -9-
<PAGE>   10

engineering tasks, deliverables and schedule. SeaMED negotiates each engineering
project plan independently, and, as a business strategy, generally prices
engineering contracts to cover direct project expenses (i.e., nonrecurring
engineering expenses) plus a share of marketing, general and administrative
expenses. SeaMED's objective in providing engineering services is to obtain, for
a specific time period (usually three to five years), exclusive manufacturing
rights to the instrument resulting from the engineering project. The customer
can typically cancel the engineering project at any time upon short notice.

     Engineering revenues are derived primarily from professional services
provided by SeaMED's engineers. The balance of engineering revenues is sales of
materials to customers at cost. Engineering revenue growth depends primarily on
three factors: (i) the number and scope of existing engineering projects, (ii)
whether existing projects are in time-intensive phases, and (iii) whether new
engineering projects of sufficient scope replace engineering projects that are
completed or otherwise terminated. Engineering gross margins are low due to
SeaMED's strategy of pricing engineering services as part of an exclusive
manufacturing contract for the resulting instrument. Since demand for
engineering services is based on the number and scope of engineering projects,
if customers cancel one or more projects on short notice, SeaMED may experience
from time to time excess engineering capacity. Engineering margins may fluctuate
depending on the rates that customers pay under engineering project plans and
the utilization rates of engineers.

     From time-to-time SeaMED selectively designs and manufactures nonmedical
commercial products that benefit from SeaMED's engineering and manufacturing
capabilities. SeaMED intends to maintain as its primary focus the design and
manufacturing of advanced medical instruments for medical technology companies.

     Marketing, general and administrative expenses include the costs of
SeaMED's marketing, finance, and management information systems departments and
other administrative costs. In addition, marketing, general and administrative
expenses include the cost of a Company-wide bonus tied to operating performance
and return on operating assets based on an operating plan approved by the Board
of Directors. Future payments will vary based on the Company's performance
relative to plan objectives.

YEAR 2000 TECHNOLOGY ISSUES

     The Company has analyzed its Year 2000 technology issues in its information
technology systems and has implemented corrective measures. Internal testing of
the corrective measures is underway and is scheduled for completion by March 31,
1999. The Company identified Year 2000 issues primarily in the Company's
financial information software programs. The Company has not analyzed Year 2000
issues in its noninformation technology assets nor has it formulated contingency
plans in the event its technology systems are adversely affected by Year 2000
issues despite corrective measures.

     The Company recognizes that its operations and manufacturing revenues may
be adversely impacted if its customers or suppliers do not address Year 2000
issues on a timely basis. The 



                                      -10-
<PAGE>   11

Food and Drug Administration ("FDA") has issued regulations requiring all
medical device companies (which includes almost all SeaMED customers) to
disclose whether they will be Year 2000 compliant. Accordingly, the Company has
been monitoring FDA Year 2000 compliance filings of its manufacturing customers
and has been in contact with several key customers in order to determine their
state of Year 2000 readiness.

     The Company has also contacted over 60 of its most significant suppliers in
order to assess their Year 2000 readiness. Responses have been received from all
suppliers contacted, with 32 indicating that they are currently Year 2000
compliant. The remainder have indicated that they continue to evaluate Year 2000
issues and expect to attain compliance before the end of the calendar year. In
addition, the Company recognizes that its service providers, such as freight
companies, mail and other delivery services, financial services companies and
others, may adversely effect SeaMED if they do not address Year 2000 issues. The
Company has no plans to evaluate the Year 2000 readiness of such providers. The
Company does not expect the costs associated with Year 2000 upgrades to exceed
$100,000.


                                      -11-
<PAGE>   12

RESULTS OF OPERATIONS

The following table sets forth statement of income data as a percentage of
revenues for the periods indicated.

<TABLE>
<CAPTION>
                                                   Quarter Ended          Six Months Ended
                                                    December 31,             December 31,
                                                 ------------------      ------------------
                                                  1998        1997        1998        1997
                                                 ------      ------      ------      ------
<S>                                              <C>         <C>         <C>         <C>   
Revenues                                         100.0%      100.0%      100.0%      100.0%
Cost of sales                                     87.2        83.0        85.7        83.0
                                                 -----       -----       -----       -----
Gross margin                                      12.8        17.0        14.3        17.0
Marketing, general and administrative              5.7         8.4         6.3         8.5
                                                 -----       -----       -----       -----
Operating income                                   7.1         8.6         8.0         8.5
Other income, net                                  0.0         0.2         0.0         0.2
                                                 -----       -----       -----       -----
Income before income taxes                         7.1         8.8         8.0         8.7
Income tax provision                               2.4         3.0         2.7         3.0
                                                 -----       -----       -----       -----
Net income                                         4.7%        5.8%        5.3%        5.7%
                                                 =====       =====       =====       =====
</TABLE>

     Revenues

     The following table sets forth revenues with the corresponding percentage
of total revenues and the percentage increase for the periods indicated.

<TABLE>
<CAPTION>
                           Quarter Ended December 31,                                Six Months Ended December 31,
                  ----------------------------------------------               -----------------------------------------
                    1998                          1997                                1998                 1997
                  ---------------------   ----------------------               -------------------- --------------------
                             % of Total               % of Total      %                  % of Total           % of Total
                  Revenues    Revenues    Revenues     Revenues   Inc/(Dec)    Revenues   Revenues  Revenues   Revenues    %Increase
                  --------    --------    --------     --------   ---------    --------   --------  --------  ----------   ---------
                                                                  (dollars
                                                                     in
                                                                  thousands)
                                                                  
<S>               <C>        <C>          <C>         <C>         <C>          <C>       <C>        <C>       <C>          <C>  
Manufacturing      $12,957       68.6%     $ 9,652       59.4%      34.2 %      $25,447      66.5%    $20,014      62.0%      26.5%
Engineering          5,928       31.4        6,608       40.6      (10.3)%       12,815      33.5      12,275      38.0        4.4%
                   -------      -----      -------      -----                   -------     -----     -------     -----            
  Total Revenues   $18,886      100.0%     $16,259      100.0%      16.2 %      $38,262     100.0%    $32,289     100.0%      18.5%
                   =======      =====      =======      =====                   =======     =====     =======     =====            
</TABLE>


     Manufacturing revenues increased by approximately $3.3 million in the
second quarter of fiscal year 1999 from the second quarter of fiscal year 1998
and by approximately $5.4 million in the first six months of fiscal year 1999
from the first six months of fiscal year 1998. The increase in manufacturing
revenues in the second quarter of fiscal year 1999 was due primarily to four
medical instruments adding approximately $3.7 million in revenues and increased
revenues from the manufacture of the Coinstar coin-counting machine adding
approximately $315,000 in nonmedical manufacturing revenues. The increase in
manufacturing revenues for the first six months of fiscal year 1999 was due
primarily to new medical instruments and increased revenues from existing
medical instruments adding approximately $11.1 million and increased revenues
from the manufacture of the Coinstar coin-counting machine adding approximately
$1.8 million in nonmedical manufacturing revenues. Increases in manufacturing
revenues were offset by decreased volume of certain existing instruments and the
phase-out of others, as well as delays in certain anticipated customer orders
due to the inability of certain early-stage customers to obtain necessary
financing. SeaMED management anticipates that the phase-out of certain existing
instruments in the second quarter of fiscal year 1999 will result in
manufacturing revenues for the third and fourth quarters of fiscal year 1999
being sequentially lower than in the first and second 



                                      -12-
<PAGE>   13

quarters of fiscal year 1999.

     Sales to Coinstar in the second quarter of fiscal year 1999 represented
approximately 18% of total revenue and approximately 23% of manufacturing
revenue, compared to 20% of total revenue and 28% of manufacturing revenue in
the second quarter of fiscal year 1998. For the first six months of fiscal year
1999, Coinstar represented approximately 21% of total revenue and 29% of
manufacturing revenue compared to 20% of total revenue and 28% of manufacturing
revenue in the first six months of fiscal year 1998. SeaMED management expects
that sales to Coinstar may increase as a percentage of total sales for the
remainder of fiscal year 1999, but that the percentage will decrease in future
years.

     Significant manufacturing revenues were generated by 21 medical instruments
in the first six months of fiscal year 1999 compared to 19 medical instruments
in the first six months of fiscal year 1998. The only nonmedical commercial
product that generated significant manufacturing revenues during the first six
months of fiscal year 1999 and fiscal year 1998 was the Coinstar coin-counting
machine.

     Engineering revenues decreased by approximately $680,000 in the second
quarter of fiscal year 1999 from the second quarter of fiscal year 1998, due
primarily to the delay of certain projects and the cancellation of other
projects, the transition of certain projects from engineering to manufacturing,
and delays in certain anticipated customer orders due to the inability of
certain early-stage customers to obtain necessary financing. These factors in
the second quarter of fiscal year 1999 were partially offset by increased time
and, to a lessor extent, increased hourly rates being billed on existing
projects of approximately $2.7 million compared to the second quarter of fiscal
year 1998. For the first six months of fiscal year 1999 engineering revenues
increased approximately $540,000 compared to the first six months of fiscal year
1998. The increase in engineering revenues in the first six months of fiscal
year 1999 was due primarily to new projects and to increased time and, to a
lesser extent, increased hourly rates being billed on existing projects adding
approximately $6.4 million in revenues. Increases in engineering revenues were
offset by the transition of certain projects from engineering to manufacturing
and other projects and orders being delayed or cancelled.

     While future engineering revenues are difficult to forecast, SeaMED
management believes engineering revenues for the remainder of fiscal year 1999
will be comparable to the second quarter of fiscal year 1999.

     Approximately $1.3 million (22%) of the engineering revenue in the second
quarter of fiscal year 1999 came from Bridge Medical Inc., compared to
approximately $588,000 (9%) in the second quarter of fiscal year 1998.
Engineering revenue for Bridge Medical Inc. totaled approximately $3.1 million
(24% of total engineering revenue) for the first six months of fiscal year 1999
compared to $883,000 (7% of total engineering revenue) in the first six months
of fiscal year 1998. SeaMED management expects sales to Bridge Medical Inc. to
fluctuate in future periods.

     Approximately $2.8 (11%) million of total manufacturing revenue came from
United 



                                      -13-
<PAGE>   14

States Surgical in the first six months of fiscal year 1999 compared to
approximately $2.2 million (11%) in the first six months of fiscal year 1998. As
a result of the recent merger of United States Surgical with Tyco International,
Inc., SeaMED management expects that the Company's manufacturing projects with
United States Surgical will be delayed and possibly terminated as early as the
third quarter of the current fiscal year.

     Approximately $3.1 million (17%) of total revenue in the second quarter and
$5.1 million (13%) for the first six months of fiscal year 1999 came from
Johnson & Johnson, compared to $696,000 (4%) of total revenue in the second
quarter and $1.2 million (4%) of total revenue for the first six months of
fiscal year 1998. Engineering revenue for Johnson & Johnson in the first six
months of fiscal year 1999 represented approximately 2.0% of total engineering
revenue. Manufacturing revenue for Johnson & Johnson in the first six months of
fiscal year 1999 represented approximately 19% of total manufacturing revenue.
SeaMED management expects sales to Johnson & Johnson as a percentage of total
sales to fluctuate in future years.

     As of the end of fiscal year 1998 SeaMED had in its engineering project
pipeline 22 new medical instruments or systems, and six projects that enhance or
are intended to extend the life cycle of existing medical instruments or
systems. At the end of the second quarter of fiscal year 1999, SeaMED had 11 new
medical instruments or systems and 12 projects that enhance or are intended to
extend the life cycle of existing medical instruments or systems. The 23 medical
projects in the pipeline at the end of second quarter of fiscal year 1999 were
being performed for 19 different customers. Although management believes that
many of the 23 medical projects in the pipeline have a good chance of some day
resulting in manufacturing contracts from which SeaMED will derive substantial
manufacturing revenues, the volume and timing of future manufacturing revenues
that relate to any specific engineering project are highly variable, and certain
engineering projects in the pipeline may not lead to future manufacturing
revenues.

     All projects in SeaMED's engineering pipeline at December 31, 1998 were for
medical instruments.

     Price adjustments under existing manufacturing contracts have not been
significant. Increases in revenues have not been significantly influenced by
inflation.



                                      -14-
<PAGE>   15

     Gross Margin

     The following table sets forth gross margin, both in dollar amounts and as
a percentage of the corresponding revenue figure for the periods indicated.

<TABLE>
<CAPTION>
                         Quarter Ended December 31,            Six Months Ended December 31,
                   --------------------------------------- ---------------------------------------
                          1998               1997                1998                1997
                   ------------------- ------------------- ------------------- -------------------
                    Gross     Gross     Gross     Gross     Gross     Gross     Gross     Gross
                   Margin($) Margin(%) Margin($) Margin(%) Margin($) Margin(%) Margin($) Margin(%)
                   --------- --------- --------- --------- --------- --------- --------- ---------
                                                (dollars in thousands)
<S>                <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>  
Manufacturing      $ 1,809     14.0%    $ 1,854    19.2%     $4,075     16.0%    $3,839     19.2%
Engineering            612     10.3%        916    13.8%      1,384     10.8%     1,663     13.5%
                   -------              -------              ------              ------          
  Total gross
    margin         $ 2,421     12.8%    $ 2,770    17.0%     $5,459     14.3%    $5,502     17.0%
                   =======              =======              ======              ======          
</TABLE>


     Manufacturing gross margin decreased to 14.0% of manufacturing revenues in
the second quarter of fiscal year 1999 from 19.2% in the second quarter of
fiscal year 1998, due primarily to excess capacity in the Company's material
procurement in light of decreases in the volume of materials purchased for the
quarter. Manufacturing gross margin for the first six months of fiscal year 1999
decreased to 16.0% from 19.2% for the first six months of fiscal year 1998 due
to excess capacity in material procurement and changes in product mix to lower
gross margin products. SeaMED has reduced headcount approximately 6% in an
effort to improve manufacturing gross margins in future periods. SeaMED
management expects manufacturing gross margins as a percentage of revenue to
remain lower than historic levels for the remainder of fiscal year 1999 but to
improve in future years.

     Engineering gross margin as a percentage of engineering revenues decreased
to 10.3% in the second quarter of fiscal year 1999 from 13.8% in the second
quarter of fiscal year 1998, and to 10.8% in the first six months of fiscal year
1999 from 13.5% in the first six months of fiscal year 1998. The decreases are
attributable to costs associated with the addition of the Company's new
development facility being spread over almost the same engineering revenue base
and a lower rate of utilization of the Company's engineers. Management expects
that engineering gross margins as a percentage of sales will also fluctuate from
quarter to quarter but should approximate 11%.

     Marketing, General and Administrative Expenses

     Marketing, general and administrative expenses decreased slightly to $1.1
million in the second quarter and $2.4 million for the first six months of
fiscal year 1999 compared to $1.4 million for the second quarter and $2.8
million for the first six months of fiscal year 1998. The dollar decrease was
due primarily to lower expenses associated with the company-wide plan attainment
bonus. These savings were offset by the increase in costs associated with
disseminating information to shareholders and the public, increased headcount
and management information systems costs associated with the Company's growth.
The decrease in marketing, general and administrative expenses as a percentage
of revenue is primarily due to the lower spreading of fixed costs over a higher
revenue base. SeaMED management expects marketing, general and administrative
expenses as a percentage of revenues to remain approximately the same in the
near 



                                      -15-
<PAGE>   16

term.

     Operating Income

     Operating income decreased 3.9% to $1.3 million (7.1% of revenues) in the
second quarter of fiscal year 1999 from $1.4 million (8.6% of revenues) in the
second quarter of fiscal year 1998. The decrease in operating income is
primarily the result of lower manufacturing and engineering gross margins during
the second quarter of fiscal year 1999. Operating income increased slightly to
$3.1 million (8.0% of revenues) for the first six months of fiscal year 1999
compared to $2.8 million (8.5% of revenues) for the first six months of fiscal
year 1998. Increases in operating income for the first six months of fiscal year
1999 are due primarily to an increase in sales volume and a decrease in
marketing, general and administrative expenses as a percent of sales. These
improvements were offset by the decrease in manufacturing and engineering
margins from the first six months of fiscal year 1999.

LIQUIDITY AND CAPITAL RESOURCES

     SeaMED has historically financed its operations through earnings, debt and
sales of securities. As part of its strategy to finance its growth, on November
19, 1996, SeaMED completed its initial public offering of securities, selling
1,529,720 shares of common stock at $11 per share, resulting in net proceeds to
the Company of approximately $14.8 million. Of the net proceeds, the Company
used approximately $1.8 million to pay a cumulative preferred dividend on its
convertible redeemable preferred stock, approximately $1.8 million to pay down a
line of credit to zero and approximately $1.3 million to pay off three notes
payable. SeaMED has used a portion of the remaining net proceeds to continue
funding working capital needs resulting from its growth and for general
corporate purposes, including leasehold improvements and purchases of equipment.

     In the first six months of fiscal year 1999 SeaMED's operating activities
provided $2.5 million to the Company due primarily to decreases in inventory.
During the first quarter of fiscal year 1999, the Company borrowed an additional
$1.5 million against an existing equipment credit facility, bringing total
borrowings against existing equipment to $4.0 million. Borrowings under this
agreement bear interest at LIBOR plus 1.4% (6.65% at December 31, 1998). This
agreement expires October 1, 2001.

     In July, 1998, the Company's Board of Directors approved an increase to its
existing working capital line of credit. Under this agreement the Company can
borrow up to 85% of eligible accounts receivable and 50% of eligible inventory
up to a maximum of $20.0 million. Borrowings under this agreement (and the
equipment loan agreement) require compliance with certain covenants, including a
maximum debt-to-equity ratio of 1.25-to-1, minimum ratio of earnings before
income taxes and interest of 2.0-to-1 and dividend restrictions. Borrowings
under this agreement bear interest at the bank's prime rate minus .25% or LIBOR
plus 1.2%. This agreement expires October 1, 2001. There were no borrowings
outstanding under this line of credit at December 31, 1998.



                                      -16-
<PAGE>   17

     The Company is subject to interest rate risk resulting from amounts
outstanding under one of its borrowings. At December 31, 1998, the Company had
an interest rate contract with a notional principal amount of $4.0 million that
effectively converts the $4.0 million variable rate note to a fixed rate of
7.5%.

     SeaMED believes that its existing capital resources and amounts available
under its existing working capital facility will satisfy the Company's
anticipated capital needs for the next 18 to 36 months (depending primarily on
SeaMED's growth rate and its results of operations). To accommodate anticipated
future growth, SeaMED will need additional sources of capital to fund working
capital needs for inventory and accounts receivable, to lease and acquire
furniture and equipment for additional plant facilities, fund leasehold
improvements and make other capital expenditures.

     Since June, 1998, SeaMED has occupied 61,500 new square feet of office
space to support its growth. SeaMED now leases approximately 213,500 total
square feet of space. The Company will lease an additional 20,500 square feet in
June, 1999, bringing total square footage to 234,000 by the end of fiscal year
1999. The 82,000 total square feet leased from July, 1998 through June, 1999 are
located in a single new building adjacent to an existing leased building. Due in
large part to preparing the new facilities for occupancy, SeaMED spent $2.1
million on capital expenditures during the six months of fiscal year 1999
compared to $1.6 million during the first six months of fiscal year 1998. The
Company anticipates spending $3.5 million on capital expenditures in fiscal year
1999, compared to $2.6 million in fiscal year 1998.



                                      -17-
<PAGE>   18

                           PART II - OTHER INFORMATION


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     The Company held its annual meeting of shareholders on November 5, 1998.
The following matters were voted upon at the meeting:

     Proposal 1: The following directors were elected: 

<TABLE>
<CAPTION>
                                                                            Votes
                                                                   ------------------------
                                                                     For           Withheld
                                                                   ---------       --------
<S>                                                                <C>             <C>  
     Edgar F. Rampy                                                4,275,787         9,682
     Richard Wohns, M.D.                                           4,274,569        10,900
</TABLE>


     The terms of office of the following directors continued after the meeting:

     William H. Gates, Sr.
     Richard O. Martin, Ph.D.
     R. Scott Asen
     W. Robert Berg
     Stephen J. Clearman

     Proposal 2: The appointment of Ernst & Young as the independent auditors of
the Company for fiscal year 1999 was approved, with 4,278,339 votes for, 130
votes against and 7,000 abstentions.

ITEM 5. OTHER INFORMATION.

     In an amended Schedule 13G filed on January 22, 1999, Gilder, Gagnon, Howe
& Co., a general partnership and broker-dealer operating in New York, NY,
reported beneficial ownership of 8.1% of the outstanding shares of the Company's
common stock. Except for shares owned by or for partners of the firm, the shares
are held in discretionary accounts of approximately 250 customers, over which
Gilder, Gagnon, Howe & Co. has no voting rights. In a separate amended Schedule
13G filed on January 22, 1999, Neil Gagnon and certain persons related to him
reported beneficial ownership of an aggregate of 1.9% of the outstanding shares
of the Company's common stock.

ITEM 6(a). EXHIBITS.

                                      -18-
<PAGE>   19

<TABLE>
<S>             <C>
Exhibit 3.1+    Amended and Restated Articles of Incorporation of the Registrant

Exhibit 3.2++   Bylaws of the Registrant

Exhibit 27.1    Financial Data Schedule
</TABLE>

----------

+    Filed previously with the Company's quarterly report on Form 10-Q for the
     quarter ended October 2, 1997, filed with the Securities and Exchange
     Commission.

++   Filed previously with the Company's Registration Statement on Form S-1 (No.
     333-13455) filed with the Securities and Exchange Commission.



                                      -19-
<PAGE>   20

                                   SIGNATURES

     The unaudited interim financial statements furnished by management reflect
all adjustments which are, in the opinion of management, necessary for a fair
presentation of financial position and results of operation.

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


By       /s/ W. Robert Berg                        February 8, 1999
   -----------------------------------             -----------------------------
             W. Robert Berg                        Date
       Principal Executive Officer


By       /s/ Edgar F. Rampy                        February 8, 1999 
   -----------------------------------             -----------------------------
             Edgar F. Rampy                        Date
       Principal Financial Officer



                                      -20-
<PAGE>   21

                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit
Number                              Description                                           Page
-------                             -----------                                           ----
<S>             <C>                                                                       <C>
Exhibit 3.1+    Amended and Restated Articles of Incorporation of the Registrant.........

Exhibit 3.2++   Bylaws of the Registrant.................................................

Exhibit 27.1    Financial Data Schedule..................................................
</TABLE>
----------

+    Filed previously with the Company's quarterly report on Form 10-Q for the
     quarter ended October 2, 1997, filed with the Securities and Exchange
     Commission.

++   Filed previously with the Company's Registration Statement on Form S-1 (No.
     333-13455) filed with the Securities and Exchange Commission.