AFP Imaging reports profitable results for first quarter fiscal 1995.

ELMSFORD, N.Y.--(BUSINESS WIRE)--Nov. 15, 1994--AFP Imaging Corp. (NASDAQ:AFPC) today reported record results for its first quarter ended Sept. 30, 1994.

The company recorded net income of $116,893 or $.02 per share on sales of $6,343,185 in the first quarter as compared to a net loss of ($16,642) or ($-) per share on sales of $8,539,911 in the comparable quarter in the prior year. This is the company's first First Quarter profit in five years. AFP was able to earn a profit on a 26% lower revenue base due to the extensive restructuring plan implemented in the previous fiscal years, which is now essentially complete. Management anticipates even further expense reductions in future years with the sale of the Springfield, Va. plant and the sublease of a portion of its Elmsford, N.Y. facility as previously reported on Oct. 10, 1994. Corporate debt continues to be reduced to its lowest level in seven years, and is presently under $4.0 million. The company generated $497,405 of cash from operations in the first quarter and working capital increased by $353,000, due to internally generated funds.

The company's lender has waived the loan ratios and convenants and will reset them to reflect the significant non-cash, non-operating write-offs taken in the prior fiscal year as part of their comprehensive restructuring program. The company is also in full compliance with its subordinated debentures, and all debt has been properly reclassified.

The entire line of medical diagnostic imaging equipment will be exhibited in late November at the Radiological Society of North America (RSNA) in Chicago, the major clinical meeting of the year. The company will demonstrate its products at the RSNA in a joint marketing and sales display with an unrelated medical diagnostic digital imaging equipment manufacturer. This will provide a broad array of products while containing costs. At the same time, the company will also exhibit its own line of dental imaging products at the Greater NY Dental Meeting which is held in the Jacob Javits Convention Center. This is one of the largest dental shows in the USA.

AFP Imaging designs, manufactures and markets equipment and systems to hospitals, radiologists, cardiologists, dentists and other medical specialists used to generate, record, process and view hard copy diagnostic images under the AFP and DENT-X trademarks. The company also provides a broad line of pre-press image making equipment to the international printing and graphic arts industry under the LOGETRONICS and KENRO brands. AFP products are distributed worldwide by three different dealer networks. -0-

                                      Three months ended
                              Sept. 30, 1994      Sept. 30, 1993


Net sales                      $6,343,185           $8,539,911
Income (loss) before
 taxes                            166,893             (120,931)
Provision (benefit) for
 taxes                             50,000             (104,289)
Net income (loss)                $116,893             ($16,642)
Net income (loss) per share          $.02              $  -
Weighted average no. of
 shares and share equivalents
 outstanding, (common,
 preferred, and common
 stock equivalents)             6,916,005            5,830,200

CONTACT: AFP Imaging Corp.

David Vozick, 914/592-6100