UNITED STATES
                       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 quarterly  period ended  December 27, 1997
         or

[ ]      Transition  report  pursuant to Section 13  or 15(d) of  the Securities
         Exchange  Act  of  1934  for  the  transition  period  from ________ to
         ________


                         Commission file number 0-17885
                        BEI MEDICAL SYSTEMS COMPANY, INC.
             (Exact name of Registrant as specified in its charter)



         Delaware                                        71-0455756
--------------------------                  ------------------------------------
 (State of incorporation)                   (I.R.S. Employer Identification No.)



                                83 Hobart Street
                          Hackensack, New Jersey 07601
                          ----------------------------
                    (Address of principal executive offices)

                                 (201) 488-4960
                                 --------------
                         (Registrant's telephone number)


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
                                            ---    ---

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

     Common Stock: $.001 Par Value, 7,556,534 shares as of January 20, 1998




                                                                    Page 1 of 12

<PAGE>





BEI MEDICAL SYSTEMS COMPANY, INC. AND SUBSIDIARIES

INDEX



PART 1.   FINANCIAL INFORMATION   (Unaudited)                               PAGE

Item 1.   Financial Statements

              Condensed Consolidated Balance Sheets--December 27, 1997 and
              September 27, 1997                                               3

              Condensed Consolidated Statements of Operations--Quarter
              ended December 27, 1997 and December 28, 1996                    4

              Condensed Consolidated Statements of Cash Flows--Quarter
              ended December 27, 1997 and December 28, 1996                    5

              Notes to Condensed Consolidated Financial Statements--
              December 27, 1997

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                                9

PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K                                    11

              (a)      Exhibits

                        27.1     Financial Data Schedule


              (b)      Reports on Form 8-K



          SIGNATURES                                                          12


                                                                    Page 2 of 12

<PAGE>



PART I.  FINANCIAL INFORMATION
Item 1.           Financial Statements
<TABLE>
BEI MEDICAL SYSTEMS COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                  December 27,             September 27,
                                                      1997                      1997
                                                  (Unaudited)             (See note below)
                                                          (dollars in thousands)
----------------------------------------------  ---------------------------------------------
<S>                                                        <C>                         <C>
ASSETS
Cash and cash equivalents                                   $8,363                     $9,271
Trade receivables, net                                       2,210                      1,958
Inventories, net -- Note 2                                   2,880                      2,939
Other current assets                                         1,018                        296
                                                ------------------       --------------------
      Total current assets                                  14,471                     14,464

Property, plant and equipment, net                             753                        811
Tradenames, patents and other                                3,459                      3,708
Goodwill                                                     3,535                      3,595
Other assets, net                                               --                          6
                                                ------------------       --------------------
                                                           $22,218                    $22,584
                                                ==================       ====================

LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable                                      $1,161                       $346
Accrued expenses and other liabilities                       2,891                      2,843
Current portion of long-term debt                              171                        190
                                                ------------------       --------------------
      Total current liabilities                              4,223                      3,379

Long-term debt, less current portion                             9                         22
Minority interest                                               --                      1,523
Stockholders' equity                                        17,986                     17,660
                                                ------------------       --------------------
                                                           $22,218                    $22,584
                                                ==================       ====================
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>



Note:  The balance sheet at September 27, 1997 has been derived from the audited
consolidated balance sheet at that date but does not include all the information
and footnotes required by generally accepted accounting  principles for complete
financial statements.


                                                                    Page 3 of 12

<PAGE>


<TABLE>
BEI MEDICAL SYSTEMS COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>

                                                                                    Quarter Ended
                                                                  -------------------------------------------------
                                                                       December 27,                    December 28,
                                                                        1997                            1996
                                                                   (dollars in thousands except per share amounts)
----------------------------------------------------------------  -------------------------------------------------
<S>                                                                          <C>                             <C>
Net sales                                                                    $2,418                          $2,584
Cost of sales                                                                 1,495                           1,432
                                                                  -----------------              ------------------
Gross profit                                                                    923                           1,152

Selling, general and administrative expenses                                  2,264                           1,909
Research, development and related expenses                                      478                             433
                                                                  -----------------              ------------------

Loss from operations                                                        (1,819)                         (1,190)

Interest expense                                                                 11                              20
Other income                                                                    120                              89
                                                                  -----------------              ------------------

Loss from continuing operations before
    income taxes                                                            (1,710)                         (1,121)

Provision (benefit) for income taxes                                          (514)                           (375)
                                                                  -----------------              ------------------

Loss from continuing operations                                             (1,196)                           (746)
Income from discontinued operations, net of income taxes                        --                              35
                                                                  -----------------              ------------------
Net loss                                                                   ($1,196)                          ($711)
                                                                  =================              ==================

                       Earnings (loss) per Common Share -- Note 4
                Basic and Diluted Earnings (loss) per Common Share

   
Loss from continuing operations                                             ($0.17)                         ($0.11)
Income from discontinued operations, net of income taxes                        --                            0.01
    
                                                                  -----------------              ------------------
Net loss per common share                                                   ($0.17)                         ($0.10)
                                                                  =================              ==================
Dividends per common share                                                       --                           $0.02
                                                                  =================              ==================
<FN>
See notes to condensed consolidated financial statements.
</FN>
                                                                                                       Page 4 of 12
</TABLE>

<PAGE>


<TABLE>
BEI MEDICAL SYSTEMS COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
                                                                                       Quarter Ended
                                                                     --------------------------------------------------
                                                                            December 27,                   December 28,
                                                                            1997                            1996
                                                                                   (dollars in thousands)
-------------------------------------------------------------------- --------------------------------------------------
<S>                                                                               <C>                              <C>
Net cash (used) provided by operating activities                                  ($851)                           $531

Cash flows from investing activities:
         Purchases of property, plant and equipment                                 (18)                           (31)
         Increase in other assets                                                    (4)                          (124)
                                                                     -------------------             ------------------

                 Net cash used in investing activities                              (22)                          (155)

Cash flows from financing activities:
         Payments on long-term debt                                                 (35)                        (5,606)
         Proceeds from issuance of common stock                                      --                            168
         Purchase of treasury stock                                                  --                           (748)
         Payment of cash dividends                                                   --                           (140)
                                                                     -------------------             ------------------

                 Net cash used in financing activities                              (35)                        (6,326)
                                                                     -------------------             ------------------

Net decrease in cash and cash equivalents                                          (908)                        (5,950)

Cash and cash equivalents at beginning of period                                   9,271                         17,329
                                                                     -------------------             ------------------

Cash and cash equivalents at end of period                                        $8,363                        $11,379
                                                                     ===================             ==================
<FN>
See notes to condensed consolidated financial statements.
</FN>
                                                                                                       Page 5 of 12
</TABLE>


<PAGE>


BEI MEDICAL SYSTEMS COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

December 27, 1997

NOTE 1 -- BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  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 (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  Operating  results for the interim  periods  presented  are not
necessarily  indicative  of the results that may be expected for the year ending
October 3, 1998. For further  information,  refer to the consolidated  financial
statements and footnotes thereto in the Company's annual report on Form 10-K for
the year ended September 27, 1997.

On September 27, 1997,  BEI  Electronics,  Inc.  ("Electronics")  distributed to
holders  of  Electronics   common  stock  one  share  of  common  stock  of  BEI
Technologies,  Inc. ("Technologies"),  a newly formed subsidiary, for each share
of  Electronics  common  stock held (the  "Distribution").  On November 4, 1997,
Electronics  merged with its  subsidiary,  BEI  Medical  Systems  Company,  Inc.
("Medical"),   and  became  one  company  with   Electronics  as  the  surviving
corporations (the "Merger").  After the Merger,  Electronics changed its name to
BEI Medical Systems Company, Inc. (the "Company").

In connection with the Distribution, Electronics transferred to Technologies all
of the assets,  liabilities and operations of its BEI Sensors & Systems Company,
Inc.  ("Sensors")  and  Defense  Systems  Company,   Inc.  ("Defense")  business
segments.  See  Note  3 --  Discontinued  Operations  for a  description  of the
Distribution.

NOTE 2--INVENTORIES

                                  December 27,                     September 27,
                                          1997                              1997
                                          (dollars in thousands)
--------------------------------------------------------------------------------

Finished products                       $1,753                            $1,843
Work in process                            137                               230
Materials                                  990                               866
                          --------------------              --------------------
Net inventories                         $2,880                            $2,939
                          ====================              ====================

NOTE 3 -- DISCONTINUED OPERATIONS

Technologies  was  incorporated on June 30, 1997 in the State of Delaware,  as a
wholly owned  subsidiary  of  Electronics.  On September  27, 1997,  Electronics
distributed to holders of Electronics  common stock one share of common stock of
Technologies  for each share of  Electronics  common stock held on September 24,
1997.  In  connection  with  the   Distribution,   Electronics   transferred  to
Technologies  all of the assets,  liabilities  and operations of its Sensors and
Defense business  segments.  Accordingly,  the financial position and results of
operations of Sensors and Defense are shown as  discontinued  operations for all
periods presented.



                                                                    Page 6 of 12

<PAGE>



NOTE 4--EARNINGS PER SHARE
<TABLE>
The following table sets forth the computation of basic and diluted earnings per
common share:
<CAPTION>
                                                                                       Quarter Ended
                                                                     --------------------------------------------------
                                                                            December 27,                   December 28,
                                                                                    1997                           1996
                                                                      (dollars in thousands except per share amounts)
-------------------------------------------------------------------  --------------------------------------------------
<S>                                                                             <C>                              <C>
                             Numerator
Income from continuing operations                                               ($1,196)                         ($746)
Income from discontinued operations, net of income taxes                             --                             35
                                                                     -------------------            -------------------
Net income (loss) available to common stockholders                              ($1,196)                         ($711)
                                                                     ===================            ===================

                            Denominator
Denominator for basic earnings per share --
   weighted average shares, net of unvested
   contingently issuable shares (FY 1998--268 shares;
   FY 1997--225 shares)                                                           7,185                          6,760


Basic and diluted earnings per share                                             ($0.17)                        ($0.11)
</TABLE>

Due to the loss  from  continuing  operations,  earnings  per  share is based on
weighted  average  common  shares only, as any  assumption of the  conversion of
equivalent shares would be anti-dilutive.

NOTE 5--CONTINGENCIES AND LITIGATION

CooperSurgical, Inc. vs. BEI Medical Systems Company, Inc. et al.

In October 1993,  CooperSurgical,  Inc., a subsidiary  of The Cooper  Companies,
filed a claim for unspecified damages alleging unfair competition due to actions
by Medical Systems and its president  Richard  Turner,  a former employee of The
Cooper  Companies,  and others.  On January 31, 1996,  the Court issued a ruling
which affirmed the legal basis for Medical Systems to assert a counterclaim  for
damages against CooperSurgical regarding the parties' electrosurgical  generator
contract.

CooperSurgical's original damage claims were for $11 million. In June 1996, more
than one year  after  expert  discovery  closed  in May  1995,  CooperSurgical's
counsel  sent  to the  Company's  counsel  a  letter  purporting  to  supplement
CooperSurgical's  previous  responses to  interrogatories.  The June 1996 letter
indicated that  CooperSurgical's  damages for one particular aspect of the claim
were   between  $24  and  $50  million   with  respect  to  a  claim  for  which
CooperSurgical's  experts had previously  estimated damages of $3.4 million. The
Company  will  vigorously  oppose  any  CooperSurgical   attempt  whatsoever  to
introduce  at trial any  evidence  of a damage  claim  based  upon its June 1996
purported supplement.

Management has vigorously  defended its rights in this action and believes after
discussion with legal counsel that the CooperSurgical claims are exaggerated. In
1995,  expert witnesses for the Company prepared a formal response to the damage
computations  CooperSurgical  previously submitted. The Company's experts stated
that if CooperSurgical were entitled to damages,  those damages would total less
than  $100,000,  and would be more than  offset by the  Company's  counterclaims
against CooperSurgical, if the Company were successful in its counterclaims.


                                                                    Page 7 of 12

<PAGE>


The trial  started in October  1997,  and is  currently  ongoing in the Superior
Court of New Jersey for Bergen County,  Chancery Division at a rate of about two
days per week, with  interruptions to the trial  schedule.  While the outcome of
this matter cannot be determined at this time, management believes, taking known
factors into account and after consultation with legal counsel, that this matter
will not result in a material  adverse  impact on the financial  position of the
Company.  However,  any  settlement  of this case on a basis that  results in an
unfavorable  outcome for the Company could have a material adverse effect on the
results of operations of any quarterly or annual reporting period.

Other

The Company has pending  various legal  actions  arising in the normal course of
business.  None of these legal actions is expected to have a material  effect on
the Company's operating results or financial condition.

                                                                    Page 8 of 12

<PAGE>



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

Except for the historical information contained herein, the following discussion
contains  forward-looking  statements that involve risks and uncertainties.  The
Company's  actual results could differ  materially  from those  discussed  here.
Factors that could cause or contribute to such differences  include, but are not
limited  to,  those  discussed  in this  section,  and  those  discussed  in the
Company's Form 10-K for the year ended September 27, 1997.
<TABLE>
The following table sets forth, for the fiscal periods indicated, the percentage
of  net  sales   represented  by  certain  items  in  the  Company's   Condensed
Consolidated Statements of Operations.
<CAPTION>
                                                                                       Quarter Ended
                                                                     -------------------------------------------------
                                                                              December 27,                December 28,
                                                                                      1997                        1996
-------------------------------------------------------------------  --------------------------  ---------------------
<S>                                                                              <C>                         <C>
Net sales                                                                        100.0%                      100.0%
Cost of sales                                                                     61.8                        55.4
                                                                     -----------------           -----------------
Gross profit                                                                      38.2                        44.6
Operating expenses
  Selling, general and administrative expenses                                    93.6                        73.9
  Research, development and related expenses                                      19.8                        16.8
                                                                     -----------------           -----------------
Income (loss) from operations                                                    (75.2)                      (46.1)
Interest expense                                                                   0.6                         0.8
Other income                                                                       5.0                         3.5
                                                                     -----------------           -----------------
Loss from continuing operations before income taxes                              (70.8)                      (43.4)
Provision (benefit) for income taxes                                             (21.3)                      (14.5)
                                                                     -----------------           -----------------
Loss from continuing operations                                                  (49.5)                      (28.9)
Income from discontinued operations                                                --                          1.4
                                                                     -----------------           -----------------
Net loss                                                                         (49.5)%                     (27.5)%
                                                                     =================           =================
</TABLE>

Quarters ended December 27, 1997 and December 28, 1996

Net sales for the quarter decreased $166,000 or 6.4% to $2,418,000 from the same
period in fiscal  1997.  The sales volume  decrease  was due  primarily to lower
domestic sales of surgical  instruments  resulting from a reorganization  in the
domestic sales force. The Company is transitioning from an inside  telemarketing
sales  force  to a  field  sales  force  of  independent  sales  representatives
supported by  telemarketing.  Sales of OEM and  gastro-intestinal  products also
declined,  reflecting  reduced  sales and  marketing  effort in this area as the
Company  concentrates  on  its  core  products  in  women's  health.   Partially
offsetting the decrease in domestic sales were increases in international sales,
primarily of the Company's new product for dysfunctional  uterine bleeding,  the
HydroThermAblator(R)  ("HTA(R)").  The HTA was not available for sale during the
first quarter of fiscal 1997.




                                                                    Page 9 of 12

<PAGE>



Cost of sales as a percentage  of net sales in the first  quarter of fiscal 1998
increased  to 61.8%  from 55.4% in the  comparable  period of fiscal  1997.  The
increase was due mainly to an  unfavorable  product mix with a higher portion of
lower margin  products  sold during the first quarter of fiscal 1998 as compared
to the same  period  in fiscal  1997.  In  addition,  production  and  marketing
start-up costs associated with the introduction

of the HTA in  international  markets had a negative impact on the cost of sales
in the first quarter of fiscal 1998.

Selling,  general  and  administrative  expenses  as a  percentage  of net sales
increased in the first  quarter of fiscal 1998 versus the  comparable  period in
fiscal 1997, due to increased  expenditures  associated  with the development of
the Company's  new field sales force.  The Company added a sales manager and two
sales representatives to support the field sales activities. Additionally, legal
expenses incurred as a result of the Company's ongoing  litigation plus expenses
associated with the change in corporate structure following  distribution of BEI
Technologies  on  September  27,  1997  contributed  to  higher   administrative
expenses. (See Note 5 -- Contingencies and Litigation)

Research,  development and related expenses as a percentage of net sales for the
first quarter of fiscal 1998 increased  versus the  comparable  period of fiscal
1997 due to costs  associated  with the Phase II clinical  trials for the HTA in
the United States and various international  clinical trials that the Company is
supporting.

Liquidity and Capital Resources

During the first quarter of fiscal 1998,  cash used by operations  was $851,000,
primarily  resulting from the net loss of $1,196,000,  an increase in refundable
income  taxes of  $514,000  and an  increase  in  current  assets  of  $402,000.
Partially  offsetting the above were  increases in accounts  payable and accrued
liabilities of $866,000,  non-cash  depreciation  and  amortization  expenses of
$395,000.

Cash used in  investing  activities  during the first  quarter of fiscal 1998 of
$22,000 was mainly for equipment expenditures.

Cash flows from financing  activities consisted of $35,000 in scheduled payments
made on long-term debt.

The  Company  had  capital  equipment  commitments  at  December  27,  1997,  of
approximately $100,000.

Year 2000 Compliance: Modification of Management Information Systems
 
The company is evaluating the potential  impact of what is commonly  referred to
as the "Year 2000" issue concerning the inability of certain information systems
to properly  recognize and process dates containing the Year 2000 and beyond. If
not corrected,  these  systems  could  fail or  create  erroneous  results.  The
Company's  management   information  systems  primarily  use  software  products
purchased  from   commercial   sources  without   significant   modification  or
customization.  Updates to these products are routinely installed by the Company
to upgrade the systems and correct known faults in the software. There have been
no  significant  incremental  costs  identified  with updates that  specifically
address  Year  2000  compliance.  Notwithstanding  Year 2000  compliance  of the
Company's  systems,  there  can be no  assurance  that the  Company  will not be
adversely affected by the failure of others to become Year 2000 compliant.

Based on the financial condition of the Company at December 27, 1997, management
believes that the existing cash balances  together with operating  revenues will
provide adequate funding to meet the Company's capital requirements for the near
term. In the event additional capital is required, the Company may seek to raise
the capital through public or private equity or debt financing.  There can be no
assurance that such capital will be available on favorable terms, if at all.

Effects of Inflation

Management  believes  that, for the periods  presented,  inflation has not had a
material effect on the Company's operations.



                                                                   Page 10 of 12

<PAGE>




BEI MEDICAL SYSTEMS COMPANY, INC. AND SUBSIDIARIES


PART II.  OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K

           (a)        Exhibits


                      27.1     Financial Data Schedule

           (b)        Reports on Form 8-K


           The  Company  filed a  report  on Form 8-K as an Item 2
           Acquisition  or  Disposition  of Assets  reporting  the
           completion  of the spin-off of BEI  Technologies,  Inc.
           from the Company.  The Form 8-K included the  Company's
           pro forma  condensed  consolidated  balance sheet as of
           June 28, 1997, and its pro forma condensed consolidated
           statements  of operation for the nine months ended June
           28, 1997 and the year ended September 28, 1996.


                                                                   Page 11 of 12

<PAGE>


SIGNATURES


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 on February 9, 1998.




                          BEI Medical Systems Company, Inc.


                          By:       /s/ Thomas W. Fry
                                   ---------------------------
                                   Thomas W. Fry
                                   Vice President of Finance and Administration,
                                   Secretary and Treasurer
                                   (Chief Accounting Officer)


                                                                   Page 12 of 12