Advanced NMR Systems Inc. announces new strategic direction.

WILMINGTON, Mass.--(BUSINESS WIRE)--Aug. 6, 1996--Advanced NMR Systems Inc. (NASDAQ:ANMR) announced that its board of directors has approved a new strategic direction for the company that will leverage ANMR's strength in healthcare services and capitalize on the growing outsourcing trend among healthcare providers seeking to increase operating efficiencies while providing the highest quality patient care.

Through its wholly-owned subsidiary, Medical Diagnostics Inc. (MDI), ANMR will be focusing primarily on its growing diagnostic imaging and rehabilitation services business with the goal of becoming a leading diversified healthcare services company. In addition to diagnostic imaging and rehabilitation services, the company will also focus on areas to include, among others, breast imaging centers, imaging centers, and fixed and mobile MRI services.

As part of the company's new mission, ANMR will eliminate research, development and production of its Instascan and headcoil technologies, resulting in lower operating expenses. In conjunction with this effort, ANMR has recently concluded a reduction in workforce associated with the diminished R&D effort. However, the company will continue its exclusive contract with General Electric Medical Systems to serve as the exclusive integrator of 3T and 4T MRI systems through June of 1999.

ANMR will write off substantial expenses connected with ANMR Instascan and head coil technology, as well as write down inventory and the costs associated with reducing technology development, and will accelerate amortization and depreciation schedules at the end of the current fiscal year ending September 30, 1996.

"This new strategic direction allows ANMR to pursue promising growth opportunities in the healthcare services industry, which is a profitable segment of our business today," said Jack Nelson, chairman and chief executive officer of ANMR.

"Healthcare payors and providers are seeking alternatives that allow them to offer the highest quality diagnostic and rehabilitation services, without undertaking the capital expense associated with acquiring and operating high technology equipment and facilities.

"Through our history and experience in owning and operating mobile and fixed diagnostic imaging centers, and rehabilitation centers, we have an opportunity to fulfill a growing need in the healthcare sector. In addition, the highly fragmented mobile MRI market is undergoing consolidation, and we can enhance our growth through selective acquisitions in that area," Nelson added.

The company also announced that it will open wholly-owned and operated Aurora Breast Imaging centers that will utilize technology from its majority owned subsidiary, Advanced Mammography Systems, Inc. (AMS). The company expects to announce the location of the first Aurora Breast Imaging center within the next month.

The commitment to open ANMR-owned and operated Aurora Breast Imaging centers will allow the company to leverage its financial investment in the technology of AMS, while allowing AMS to establish the efficacy of MRI for mammography screening.

"By opening and managing Aurora Breast Imaging centers, ANMR will benefit from product sales as they are reflected in our equity interest in AMS and will also receive ongoing revenues from reimbursement for breast imaging procedures. In addition, we will be providing AMS an opportunity to establish core clinical sites that will contribute to product and market development," said Nelson.

ANMR announced that, subject to shareholder approval, it will change its name at its annual shareholders meeting to reflect the company's new focus and mission. ANMR will also recommend changing the makeup of the board of directors and add members with expertise consistent with the company direction. The date of the annual meeting will be set after year-end results are available.

Advanced NMR Systems, Inc., is a provider of diagnostic imaging and rehabilitation services through its wholly-owned subsidiary, Medical Diagnostics, Inc., and develops high field MRI technology. Its majority-owned subsidiary, Advanced Mammography Systems, Inc., (NASDAQ:MAMO) has developed the only dedicated Breast Imaging system based on magnetic resonance imaging technology. AMS received U.S. Food and Drug Administration (FDA) clearance to begin marketing activities for the product in February, 1996. -0-

Note to Editors: This release contains forward-looking statements based upon current expectations that include a number of business risks and uncertainties. The factors that could cause results to differ materially may include, but are not limited to, the following: delays in product development, lack of market acceptance of the technology and changes in health care regulations, including reimbursement programs.

CONTACT: Advanced NMR Systems, Inc.

Beverly Tkaczenko, 800/476-0569