American Bio Medica Reports Record Fiscal 1999 Sales With Significant Top and Bottom Line Improvements.

HUDSON, N.Y.--(BUSINESS WIRE)--July 29, 1999--

American Bio Medica Corp. (NASDAQ:ABMC) Thursday announced the audited results for the year ended April 30, 1999. Fiscal 1999 net sales more than tripled to $7,038,000 from $2,154,000 last year as a result of the company's continued success in expanding its sales efforts and targeting additional sectors of the on-site drug testing industry.

Gross profit rose in the year ended April 30, 1999 to $3,682,000, or 52 percent of net sales, as compared to $1,103,000 in fiscal 1998. Net income improved to $(1,691,000), or $(0.15) per share, in fiscal 1999 from $(4,390,000), or $(0.35) per share, for the year ended April 30, 1998.

The company managed growing expenses related to its fiscal 1999 business expansion by reducing SG&A expenditures 57 percentage points relative to net sales. Due to an extensive cost reduction program that was undertaken to reduce cost of sales and operating expenses, ABMC anticipates further improvements in both profit margins and earnings during fiscal 2000.

The bottom line was also positively impacted in fiscal 1999 by the implementation of a strong credit review program, which reduced the company's bad debt expenses to 0.2 percent of sales as compared to 17.6 percent of sales in fiscal 1998.

Inventory levels nearly doubled to $1,834,000 for fiscal 1999 to prepare for the interruption in production that will be caused by ABMC's scheduled move next month into a larger facility, which will enable the consolidation of marketing operations and facilitate continued growth.

The use of funds to provide for the inventory build-up was also the primary reason for a decrease in both cash and equivalents and working capital as of April 30, 1999 to $131,000 and $2,387,000, respectively.

The company's primary short-term needs are to increase its manufacturing facilities, decrease current inventory levels and continue to support its research and development programs aimed at introducing new products and improving methods to reduce the costs of the existing drug testing delivery system.

ABMC currently plans to expend approximately $300,000 for the expansion and development of its manufacturing facilities as well as its marketing and general administrative activities. "During fiscal 1999, we capitalized upon our marketing strengths and product advantages to capture a greater portion of the on-site drug testing industry," said ABMC president and chief executive officer Stan Cipkowski.

"We achieved this goal by obtaining a design patent to protect our intellectual property, solidifying our presence in key segments such as the workplace arena, gaining a solid foothold in the corrections market, increasing our international sales channels and entering the emerging educational sector."

Cipkowski also commented on the factors expected to drive future sales growth through fiscal 2000. He noted that one key element of such expansion is anticipated sales volume from Abbott Laboratories (NYSE:ABT), which is forecast to accelerate as a result of the FDA clinical marketing clearance obtained by ABMC in fiscal 1999 for the 9 Panel Rapid Drug Screen(TM).

Cipkowski said the national accounts program the company established in the first quarter fiscal 2000 should be another component of rising sales, and also mentioned the over-the-counter sales, indicating that ABMC is preparing an FDA submission and hopes to enter the market by the end of calendar 1999.

American Bio Medica Corp. develops, manufactures and markets inexpensive, accurate, on-site drugs of abuse diagnostic kits and support services worldwide. The company's global distributors target the workplace, clinical, rehabilitation, physicians, corrections and educational markets. ABMC's Rapid Drug Screen is proven to correlate 100 percent 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.

                       Condensed Balance Sheet

                                      As of                 As of
                                  April 30, 1999        April 30, 1998

Assets
 Cash & equivalents                    $131,000            $3,239,000
 Total current assets                $3,802,000            $4,966,000
 Total assets                        $4,435,000            $5,356,000

Liabilities & Stockholders' Equity
 Total current liabilities           $1,415,000              $486,000
 Total liabilities                   $1,462,000              $486,000
 Total stockholders' equity          $2,973,000            $4,870,000


                  Condensed Statement of Operations

                             For the Year Ended     For the Year Ended
                               April 30, 1999         April 30, 1998

Net sales                           $7,038,000            $2,154,000
Cost of goods sold                  $3,356,000            $1,051,000
Gross profit                        $3,682,000            $1,103,000
Total operating expenses            $5,401,000            $5,584,000
Net income (loss)                  $(1,691,000)          $(4,390,000)
Basic and diluted net
 income (loss) per common share         $(0.15)               $(0.35)
Weighted average shares
 outstanding - basic and diluted    14,557,000            13,768,000