Advanced Machine Vision Corporation Reports Second-Quarter and First-Half Operating Results.

MEDFORD, Ore.--(BUSINESS WIRE)--Aug. 4, 1999--

Advanced Machine Vision Corporation (Nasdaq:AMVC) announced today operating results for its second quarter and six-month periods ended June 30, 1999.

For the quarter, the Company reported sales of $7,198,000, and net income of $210,000, or $0.02 per diluted share, compared to sales of $9,087,000 and net income of $1,016,000, or $0.08 per diluted share, for the second quarter a year ago.

For the six months ended June 30, 1999, AMV reported sales of $12,356,000, and a loss of $366,000, or $0.03 per diluted share. In the prior year's first half, sales were $16,190,000, and net income was $1,198,000, or $0.09 per diluted share.

Gross profit for the 1999 second quarter was 59%, compared to 55% in the 1998 second quarter. For the first six months, gross profit was 56%, compared to 52% in the comparable six-month period in 1998. Research and development expenses were $1,426,000 and $2,686,000 for the three- and six-month periods ended June 30, 1999, compared to $1,031,000 and $2,181,000 in the prior year.

On June 30, 1999, backlog was $5,277,000 compared to a June 30, 1998 backlog of $4,991,000.

William J. Young, the Company's Chairman, President and Chief Executive Officer, stated: "Results for the first half were as expected. The Company continues to devote significant effort implementing SRC's new generation of processor, which is being installed in a number of trial systems in a variety of applications. A number of these applications employ advanced capabilities such as shape recognition not previously available. While the rollout of the new processor has taken longer than anticipated, proving the technology in real production environments should accelerate its acceptance."

Young also stated: "During the second quarter, SRC delivered five machine vision systems into Russia, penetrating this market for the first time. The Company also received orders from customers in the Far East, most notably Indonesia, as those economies show signs of improvement. Ventek had a very good second quarter, and expects second-half sales levels to be higher than the first six months."

Advanced Machine Vision Corporation is a worldwide leader in the design, manufacture and sale of standard and CE-compliant vision systems used to control manufacturing processes through high-speed product inspection, and to identify and remove defects, resulting in production and quality yield rates superior to other process and control methods. AMV's operations are comprised of two wholly-owned subsidiaries, SRC VISION, Inc. and Ventek, Inc., both utilizing proprietary image processing technologies.

Safe Harbor Statement under the Private Securities Litigation Act of 1995: Statements in this news release that are forward-looking statements are subject to various risks and uncertainties, such as the Company's ability to sustain adequate customer order levels, the impact of economic conditions on our markets, the ability of the Company to successfully introduce new products, the possible negative impact of competitive products and/or pricing, the uncertainty as to whether the relationship with FMC will help contribute to revenues, the Company's ability to sustain a positive cash flow, the impact of the strengthening of U. S. currency on the Company's ability to compete effectively in the foreign markets and the effect of these factors on the market price of the Company's Class A Common Stock. Investors are encouraged to review a more comprehensive listing of cautionary statements and risk factors contained in the Company's Forms 10-K and 10-Q SEC filings. -0-

                       Summary Operating Results
                (in thousands except per-share amounts)

                            Three Months Ended     Six Months Ended
                                 June 30,              June 30,
                              1999       1998       1999       1998

Net sales                    $  7,198  $  9,087  $ 12,356  $ 16,190
Cost of sales                   2,965     4,052     5,469     7,822
                             --------  --------  --------  --------

Gross profit                    4,233     5,035     6,887     8,368
Operating expenses              3,942     3,849     7,123     6,886
                             --------  --------  --------  --------

Income (loss) before other
 income and expenses              291     1,186      (236)    1,482

Investment and
 other income                      64        49       131       111

Interest expense                 (137)     (177)     (277)     (345)
                             --------  --------  --------  --------

Income (loss) before
 income taxes                     218     1,058      (382)    1,248

Provision for (benefit from)
 income taxes                       8        42       (16)       50
                             --------  --------  --------  --------

Net income                   $    210  $  1,016  $   (366) $  1,198
                             ========  ========  ========  ========

Earnings per share:
 Basic                       $   0.02  $   0.10  $  (0.03) $   0.11
 Diluted                     $   0.02  $   0.08  $  (0.03) $   0.09
                             ========  ========  ========  ========

Average shares:
 Basic                         12,320    10,515    11,922    10,514
 Diluted                       13,729    14,677    11,922    14,676
                             ========  ========  ========  ========

                      Consolidated Balance Sheet
                 (in thousands, except per-share data)

                                       June 30,   Dec. 31,
                                        1999       1998
Assets
Current assets:
 Cash and cash equivalents             $ 2,886   $ 4,423
 Accounts receivable - net               5,336     4,073
 Inventories                             9,205     7,379
 Other current assets                    1,524     1,356
                                       -------   -------
Total current assets                    18,951    17,231

 Property, plant and
  equipment - net                        4,976     5,274
 Goodwill and other
  assets - net                           6,456     7,334
                                       -------   -------
                                       $30,383   $29,839
                                       =======   =======

Liabilities and Shareholders' Equity
Current liabilities                    $ 5,905   $ 5,131
Notes payable, less
 current portion                         6,314     7,862
Shareholders' equity                    18,164    16,846
                                       -------   -------
                                       $30,383   $29,839
                                       =======   =======
Shares outstanding                      12,870    10,720
                                       =======   =======
Book value per share                   $  1.41   $  1.57
                                       =======   =======

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