AMERICAN WHITE CROSS, INC. ANNOUNCES THIRD QUARTER OPERATING RESULTS.

DAYVILLE, Conn.--(BUSINESS WIRE)--Nov. 11, 1994--American White Cross, Inc. (Nasdaq:AWCI) today reported operating results for the third quarter ended October 2, 1994.

Sales for the 1994 third quarter of $23,427,000 were relatively unchanged when compared to sales of $23,482,000 for the same period in 1993. Third quarter income from operations was $721,000, compared to $1,276,000 for the 1993 third quarter. Third quarter net income was $196,000, or $0.03 per share, on weighted average shares outstanding of 6,676,000, compared with net income of $605,000, or $0.15 per share, on weighted average shares outstanding of 4,067,000 for the 1993 third quarter.

The decline in third quarter operating income was primarily attributable to three factors: increased promotional discounting; a significant change in product mix from children's character adhesive bandages to generally lower margin cotton products; and cost increases for purchased raw materials. The Company is taking actions to address these issues, including revisions to its pricing strategies, renewed efforts for new product introduction and lowering its manufacturing costs through facility consolidation.

For the three quarters ended October 2, 1994, sales increased 29% to $70,480,000 from $54,734,000 for the comparable period in 1993. Prior to giving effect to a non-recurring restructuring charge of $5,328,000, income from operations for the first three quarters of 1994 increased 21% to $3,335,000 from $2,761,000 for the first three quarters of 1993. Including the restructuring charge, the net loss for the first three quarters of 1994 was $2,256,000, or $0.41 per share, on weighted average shares outstanding of 5,570,000, compared with net income of $1,568,000, or $0.39 per share, on weighted average shares outstanding of 4,056,000 for the comparable period in the prior year.

The year-to-date increase in sales was primarily attributable to the May 25, 1993 acquisition of The American White Cross Laboratories, Inc., which significantly increased the Company's share of the private label segment of the adhesive bandage market. The increase in year-to-date income from operations prior to the restructuring charge was due to such volume increases. This improvement was partially offset by the promotional discounting, product mix changes and raw material cost increases cited above.

Howard Koenig, Chairman and Chief Executive Officer, stated, "Our Company is well positioned today to achieve our long term goals of growth, superior market position and low cost production. While we are weathering many of the same short term issues as other companies in our industry, we are making significant progress towards our goals.

We have strengthened our management team considerably with the addition of Gary Avalone, Executive Vice President - Marketing & Sales, and John Patnovic, Senior Vice President - Operations, as well as other important members of our team, while at the same time holding selling, general and administrative costs below 1993 rates. These and other changes have allowed us to revise our market pricing strategies, to reinvigorate our new product development pipeline, especially in the children's market, to enhance our facility consolidation efforts and to further focus on improvements in our manufacturing process.

Our facility restructuring appears to be on track, and, as we previously stated we expect to realize the operating savings of approximately $2.2 million annually, with partial savings to be realized as early as the first quarter of 1995. We have also initiated actions designed to recover the cost of raw material price increases, which also should begin to take effect in the first quarter of 1995. Also, during the third quarter we completed the refinancing of our machinery and equipment at a fixed rate, which today is one-half of a percentage point less than our previous variable rate would have been given recent prime rate increases. This refinancing significantly increased our available borrowings under our revolving credit facility and provides us with the flexibility to take advantage of any market opportunities."

American White Cross, Inc. also announced today, that it has signed a letter of intent to acquire the operations of Mi-Lor Corporation, a manufacturer and marketer of consumer store brand oral care products.

Mr. Koenig, also stated, "We are confident that the actions we have taken to strengthen our team, lay the groundwork for sales growth, ensure progress toward lower cost production and enhance our liquidity will bode well for 1995."

American White Cross, Inc. is a leading manufacturer and marketer of private label adhesive and cotton-based health and personal care products. Its principal products include adhesive bandages, cotton swabs, cosmetic puffs, rounds and squares, waterproof tape, sterile cotton balls, first aid kits and cotton coil used in the packaging of drugs and vitamins in bottles. The Company also sells adhesive bandages under its own national brands, including Aladdin and Beauty and the Beast (each marketed under license from The Walt Disney Company) and STAT-STRIP (easy opening bandages). -0-

                AMERICAN WHITE CROSS, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
          For the Fiscal Quarters and Three Fiscal Quarters Ended
                    October 2, 1994 and October 3, 1993
                 (In thousands, except per share amounts)

                          Fiscal Quarters   Three Fiscal Quarters
                               Ended              Ended
                        10/02/94  10/03/93  10/02/94  10/03/93
                            (Unaudited)          (Unaudited)

Sales                    $23,427   $23,482   $70,480   $54,734

Cost of sales             18,013    17,506    53,530    40,963

     Gross profit          5,414     5,976    16,950    13,771

Operating expenses:
  Selling                  3,511     3,374    10,352     8,115
  General and
  administrative           1,182     1,326     3,263     2,895
                           4,693     4,700    13,615    11,010


Income from operations
 before restructuring
 charge                      721     1,276     3,335     2,761

Non-recurring restructuring
 charge                      ---       ---    (5,328)(1)   ---

Income (loss) from
 operations                  721     1,276    (1,993)    2,761

Interest expense            (442)     (407)   (1,535)     (811)

Other income (expense)        20       (16)       27       (24)

Income (loss) before
 provision for (benefit from)
 income taxes                299       853    (3,501)    1,926

Provision for (benefit from)
 income taxes                103       248    (1,245)      358

Net income (loss)        $   196   $   605   $(2,256)  $ 1,568

Net income (loss)
 per share               $  0.03   $  0.15   $ (0.41)  $  0.39

Weighted average shares
 outstanding               6,676     4,067     5,570     4,056
-0-

(1) The Company's second quarter of 1994 results include a one-time

charge of $5,328,000 related to the restructuring of its facilities,

which the Company expects will result in operating savings of

approximately $2.2 million annually. Partial savings will begin to

be realized as early as the first quarter of 1995 and gradually build

to a fully realized savings rate by the end of the eighteen month

restructuring period.

CONTACT: AMERICAN WHITE CROSS, INC., Dayville

             Scott Vertrees, 714/248-8900
             or Tom Rallo, 203/779-4114
                          or
             Morgen-Walke Associates, New York
             IR CONTACT: Amy Weisman/Melissa Garelick
             PRESS: Stacy Berns
             212/850-5600