ADAC Announces Third Quarter Results.

MILPITAS, Calif.--(BUSINESS WIRE)--July 19, 1995--ADAC Laboratories (ADAC/NASDAQ), today announced results from operations for its third fiscal quarter ended July 2, 1995.

For the three month period ended July 2, 1995, the company reported revenues of $45.6 million compared to $40.1 million in the third quarter of fiscal 1994. Net income of $3.1 million or 18 cents per share was achieved, compared with net income of $269,000 or 2 cents per share in the third quarter of fiscal 1994. Bookings for the quarter were $47.8 million compared to $43.1 million in the third quarter of fiscal 1994.

For the nine month period ended July 2, 1995, ADAC reported revenues of $134.6 million, which compares to revenues of $133.9 million reported for the same period a year ago. Net income of $8.2 million or 49 cents per share was achieved, compared to net income of $8.0 million or 48 cents per share as adjusted to reflect a comparable tax rate of 35 percent.

In making this announcement, David L. Lowe, Chief Executive Officer, stated, "We are pleased to report our fourth consecutive quarterly increase in revenues and operating profits. Our domestic nuclear medicine business shows strong indications of growth with a 33 percent increase in revenues, a 267 percent increase in operating profits and a 22 percent increase in bookings. The international markets continue to expand with strong European demand and growing Asian and Latin American markets."

"We are even more excited about the prospects for the three new products introduced in June 1995 at the annual Society of Nuclear Medicine meeting: Molecular Coincidence Detection (MCD), the SOLUS EPIC(TM) for the oncology market and CARDIO EPIC(TM) for the cardiology market. ADAC's breakthrough in technology with MCD received the `Image of the Year Award' at this meeting. MCD will provide improved diagnostic outcomes at lower costs giving ADAC a significant competitive advantage and an estimated two year lead over the competition. MCD is pending FDA 510k approval."

Mr. Lowe continued, "On July 12, following the close of the third quarter, ADAC completed its $16.5 million acquisition of Community Health Computing (CHC). In addition to acquiring all rights to CHC's product portfolios for the laboratory information systems and radiology information systems markets, ADAC gained a large installed customer base and $12 million in recurring annual revenue. ADAC now has the broadest product offering in radiology information systems and gains entrance to the $400 million laboratory information systems market."

In conclusion Mr. Lowe stated, "We believe ADAC's expansion in healthcare information systems, the increasing strong performance in nuclear medicine and continued expansion in international markets will continue to move ADAC forward to achieve our strategic goals."

ADAC Laboratories is recognized as the world market share leader in nuclear medicine and the leading supplier of radiology and laboratory information systems in North America. ADAC was one of only six manufacturing companies nationwide to receive a site visit for the Malcolm Baldrige National Quality Award in 1994. The company headquarters are in Milpitas, California. -0-

ADAC LABORATORIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)

                               Three                Nine
                            Months Ended        Months Ended

                           July 2,  July 3,    July 2,  July 3,
                            1995    1994        1995    1994

Revenues:
 Product sales, net       $34,868  $30,444    $103,906 $105,663
 Field service             10,757    9,637      30,678   28,262

                           45,625   40,081     134,584  133,925

Cost of revenues:
 Product sales             21,394   17,925      62,682   58,500
 Field service              7,036    6,686      21,194   20,206

                           28,430   24,611      83,876   78,706

Gross profit               17,195   15,470      50,708   55,219

Operating expenses:
 Marketing and sales        7,565    7,342      23,171   24,481
 Research and development   2,548    2,872       8,133    8,822
 General and
  administrative            2,287    1,765       6,230    5,305
 Restructuring charges               2,453                2,453

                           12,400   14,432      37,534   41,061

Operating income            4,795    1,038      13,174   14,158

Other income (expense):
 Litigation defense costs            (700)               (1,700)
 Interest and other income
      (expense), net         (158)    (40)        (566)    (136)

                             (158)   (740)        (566)  (1,836)

Income before provision
  for income taxes          4,637     298       12,608   12,322

Provision for income
  taxes                     1,583      29        4,370    1,231

Net income                 $3,054   $ 269       $8,238  $11,091

Net income per share       $ 0.18  $ 0.02       $ 0.49   $ 0.67

Weighted average shares
 used in share
 calculation               17,439  16,475       16,928   16,674

Dividends per share        $ 0.12  $ 0.12       $ 0.36   $ 0.36

ADAC LABORATORIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)

                                        July 2,     October 2,
                                        1995          1994
                                      (Unaudited)

Assets
Current assets:
  Cash and cash equivalents         $   5,529        $ 7,203
  Accounts receivable, net
    of allowance for returns
    and doubtful accounts              50,645         45,173
  Notes receivable                      6,408
  Inventories                          28,178         22,600
  Current portion of
    deferred income tax                11,195         14,877
  Prepaid expenses and other
    current assets                      5,730          2,243

          Total current assets      $ 107,685        $92,096

Service parts, net                     13,651         13,300
Fixed assets, net                       5,882          5,515
Other assets                           10,750         10,692

Total Assets                        $ 137,968       $121,603

Liabilities and shareholders' equity
Current liabilities:
  Notes payable                     $   7,600        $   -
  Accounts payable                     21,394         18,260
  Dividends payable                     1,967          1,904
  Deferred revenues                     7,793          6,447
  Other accrued liabilities            15,092         16,947

          Total current liabilities    53,846         43,558

Non-current liabilities and
  deferred credits                      4,274          3,379

Total Liabilities                      58,120         46,937

Shareholders' equity
Common stock, no par value:
  Authorized:  25,000,000 shares
  Issued and outstanding:
    16,403,983 shares
     at July 2, 1995 and
      16,046,579 shares
      at October 2, 1994               98,641         97,086
  Accumulated deficit                 (19,796)       (22,174)
  Translation adjustment                1,003           (246)

Shareholders' Equity                   79,848         74,666

Total Liabilities and
  Shareholders' Equity             $  137,968      $ 121,603

CONTACT: ADAC Laboratories, Milpitas

Kathleen Call, 408/321-9100