American Bio Medica Announces Fiscal 2001 Results.

Business Editors

KINDERHOOK, N.Y.--(BUSINESS WIRE)--Aug. 13, 2001

American Bio Medica Corp. (NASDAQ: ABMC), today reported results for the year ended April 30, 2001.

Net sales of drug test kits were $7,484,000 for fiscal 2001, compared to $7,653,000 for the previous year, a decrease of $169,000 or 2.2%. The decrease in sales was attributed to a decrease in the Company's sales to third-party distributors although that decrease was offset in part by an increase in the Company's direct sales efforts. Net income improved from a loss of $2,136,000 for fiscal 2000 to a loss of $1,880,000 for fiscal 2001. The improvement on net loss was due primarily to a decrease in cost of goods, which was offset partially by an increase in operating expenses.

Gross profit continued to improve to $4,913,000, or 65.6%, in fiscal 2001 compared to gross profit of $4,051,000, or 52.9% in fiscal 2000. This is as a result of the Company manufacturing all of the test strips needed for its Rapid Drug Screen(TM) product line in its own facility.

Relative to sales, selling, general and administrative costs increased to 87.7% in Fiscal 2001 compared to 68.2% in Fiscal 2000. The Company attributes the increase in SG&A to increased salaries for additional employees in administration and sales and marketing and the severance costs of terminated employees, along with an increase in legal fees associated with the patent infringement lawsuits filed by the Company. The lawsuits were settled in April 2001 and the Company expects its legal fees to be significantly lower in fiscal 2002 as a result of this settlement.

Research and development expense decreased in Fiscal 2001 to $614,000 compared to $719,000 for the previous year. The decrease resulted from the Company's completing development and production of its test for tricyclic antidepressants (TCA). The test for TCA is included in the Company's 9 panel Rapid Drug Screen for use in the clinical point of care market.

"We were disappointed by the decrease in net sales in this fiscal year," said American Bio Medica chairman and chief executive officer Robert L. Aromando, Jr. "However, we are buoyed by the improvements in gross profit."

"There is reason to be optimistic that ABMC can capitalize on future market opportunities, as our restructuring process reaches completion. We have already begun to realize tangible positive benefits from our new three-year plan, including several important new business contracts in the current fiscal year."

                        Condensed Balance Sheet

                       As of April 30, 2001       As of April 30, 2000
                       --------------------       --------------------
ASSETS
Cash & equivalents              $   265,000              $1,207,000
Total current assets             $3,030,000              $3,809,000
Total assets                     $3,640,000              $5,038,000
LIABILITIES & STOCKHOLDERS'
 EQUITY
Total current liabilities        $2,406,000              $1,793,000
Total liabilities                $2,427,000              $1,827,000
Total stockholders' equity       $3,640,000              $5,038,000

                   Condensed Statement of Operations

                         For the Year Ended         For the Year Ended
                            April 30, 2001             April 30, 2000
                               --------------            --------------
  Net sales                      $7,484,000            $7,653,000
  Cost of goods sold             $2,571,000            $3,602,000
  Gross profit                   $4,913,000            $4,051,000
  Total operating expenses       $7,303,000            $6,128,000
  Net income (loss)             $(1,880,000)          $(2,136,000)
  Basic and diluted net income
   (loss) per common share           $(0.10)               $(0.15)
  Weighted average shares
   outstanding - basic and
    diluted                       18,034,000            15,481,000

American Bio Medica Corporation develops, manufactures and markets inexpensive, accurate on-site drugs-of-abuse diagnostic kits, sprays and support services worldwide. The company's global distributors target the workplace, physicians, corrections, clinical and educational markets. ABMC's Drug Detector(TM) identifies minute traces of illegal drugs on surfaces, while the company's Rapid Drug Screen tests individuals and is proven to correlate greater than 99% with the standard laboratory screening test.

Forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.

Investors are cautioned that such forward-looking statements involve risk and uncertainties, including without limitation, continued acceptance of the Company's products, increased levels of competition for the Company, new products and technological changes, the Company's dependence on third-party suppliers, intellectual property rights, and other risks detailed from time to time in the Company's periodic report filed with the Securities and Exchange Commission.