American Bio Medica Reports 2nd Quarter Results; Gross Margins Improve to 65.7%.

Business Editors

KINDERHOOK, N.Y.--(BUSINESS WIRE)--Dec. 15, 2000

American Bio Medica Corp. (Nasdaq: ABMC), which develops, manufactures and markets drugs of abuse diagnostic kits, sprays and support services, today announced its unaudited results for the three months ended October 31, 2000.

Sales for the three months ending October 31, 2000 were $2,021,000, representing a decrease of $101,000, or 4.8% for the same period last year. Gross margins increased to 65.7% or $1,327,000 in the second quarter fiscal 2001, from 51.3% or $1,089,000 for the same period last year, an improvement of $238,000 or 21.9%, this improvement is attributed to the Company's cost-reducing in-house manufacturing process. Operating expenses before interest, depreciation and other non-cash charges increased to $1,732,000 from $1,110,000 for the same period last year, up $622,000 or 56.0%, attributable to an increase in selling, general and administrative costs. The increase in SG&A in the second quarter fiscal 2001 compared to the same period last year, was due in part to increases in legal fees, research and development and in marketing and promotion costs.

Net loss from operations, including non-cash charges of $214,000, amounted to $(594,000) for the three months ended October 31, 2000 as compared to $(30,000) for the same period last year. As of October 31, 2000, the Company had working capital of $1,270,000, total assets of $4,706,000 and $2,693,000 in stockholder's equity.

In the first half of fiscal 2001, sales were $4,176,000 as compared to $4,249,000 in the comparable six months of last year. This slight decline was primarily in the sales of the Rapid Drug Screen(TM), the Company's on-site test for drugs of abuse, stemming from continued pressure from the sale of a "knock-off" product manufactured by a former supplier. Gross margin was $2,740,000, or 65.6%, during the six months ended October 31, 2000 as compared to $2,134,000, or 50.2%, for the first half of fiscal 2000, an improvement of $606,000, or 28.3%. Net loss from operations, including non-cash charges of $364,000, amounted to $(927,000) for the six months ended October 31, 2000, compared to $(136,000) for the same period last year.

"We've achieved a substantial increase in gross margins from the same period last year for the second quarter in a row," stated ABMC Chairman and CEO Stan Cipkowski. "Reaching this goal, while continuing to offer the most reliable on-site device in the market is a great accomplishment. The knock-offs have undoubtedly made it difficult for sales growth in our core markets where we continue to encounter these inferior copycat products being sold at a lower price. Legal fees incurred to defend our intellectual property rights are still affecting profitability however, our commitment to uphold these rights is stronger than ever and we feel confident that in the end, we will be successful in removing these copycat products from the market."

"As long as the knock-offs are in the market, we anticipate our growth in the near future to be in sectors where we do not expect to run into the knock-off products," Cipkowski added. "This includes the clinical market with our 9-panel Rapid Drug Screen, which offers detection of tricyclic antidepressants (TCA). We are one of very few companies that can truly offer this test in an on-site device and it is crucial to success in the clinical market. Another area of growth will be the over-the-counter market (OTC). Sales of the Drug Detector in the OTC market have begun with independent drug stores and consumers buying the product directly from ABMC. Over the current quarter and into the next expect to see further announcements relating to alliances with major partner in both clinical and OTC markets."

                      Consolidated Balance Sheet

                                 April 30, 2000   October 31, 2000
                                                      (Unaudited)
                                 --------------   ----------------
Total current assets                $3,809,000         $3,258,000
Total assets                        $5,038,000         $4,706,000
Total current liabilities           $1,793,000         $1,988,000
Total stockholders' equity          $3,211,000         $2,693,000


           Consolidated Statement of Operations (Unaudited)

                          For the three months     For the six months
                             ended Oct. 31,           ended Oct. 31,
                            2000        1999        2000        1999
                        ----------  ----------  ----------  ----------
Sales                   $2,021,000  $2,122,000  $4,176,000  $4,249,000
Gross profit            $1,327,000  $1,089,000  $2,740,000  $2,134,000
Total operating
 expenses               $1,946,000  $1,119,000  $3,667,000  $2,270,000
Net income (loss)        $(594,000)   $(30,000)  $(867,000)  $(234,000)
Basic and diluted net
 income (loss) per
 common share                $(.03)     $(0.00)     $(0.05)     $(0.02)
Weighted avg. shares
 outstanding
 - basic and diluted    18,045,548  14,923,341  18,045,548  14,923,341

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 identifies minute traces of illegal drugs on surfaces, while the company's Rapid Drug Screen tests individuals and is proven to correlate 100% 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 reports filed with the Securities and Exchange Commission.