American Science and Engineering, Inc.; Operating Profits Up 84% and Pretax Profits Up 73% During Fiscal Year 2001.

Business/Technology Editors

BILLERICA, Mass.--(BUSINESS WIRE)--July 16, 2001

American Science and Engineering, Inc. (AMEX: ASE) today reported its financial performance for the year and quarter ended March 31, 2001.

For the full year, revenues increased 10.6% to $67,111,000 compared with revenues of $60,674,000 for the fiscal year 2000. Operating income increased 84.3% during fiscal year 2001 to $1,471,000. This compares with operating income of $798,000 during the prior fiscal year. Pretax profits increased 72.7% to $805,000 versus pretax profits of $466,000 for the year ended March 31, 2000.

"AS&E continues to invest in building its global competitive capacity" stated Ralph Sheridan, CEO and President. "Over the last year we achieved ISO 9001 certification to demonstrate compliance with international quality standards. We added HSBC as our trade bank to broaden our international financial capability. We expanded overseas field service and support with the addition of offices in Asia, Europe and the Middle East. We announced the new Shaped Energy(TM) family of high-energy systems that will improve penetration of complex cargoes in seaports with a revolutionary reduction in X-ray exposure. These accomplishments position AS&E as the leader in cargo and vehicle X-ray inspection."

The fiscal year 2001 tax provision was 18.0% of pretax profits. Net income after-tax was $660,000, which represented earnings per share of $0.13 on a diluted basis. During fiscal year 2000, the Company reported a tax credit for the year, which included a non-recurring benefit for R&D tax credits that dated back to prior years. Reflecting the tax benefit, the Company reported after-tax profits of $1,459,000 for the fiscal year ended March 31, 2000, or $0.29 per share on a diluted basis.

During the fourth quarter of fiscal year 2001, which ended March 31, 2001, revenues increased 35.7% to $18,564,000 as compared with the same period a year earlier, when revenues were $13,682,000. Operating income for the quarter was $441,000 versus an operating loss of $1,316,000 during the quarter ended March 31, 2000.

During the fourth quarter of fiscal year 2001, the Company earned after-tax profits of $267,000, which represented $0.05 per share on a diluted basis. While the Company had an operating loss during the three months ended March 31, 2000, due to the reported tax benefits of $1,675,000, the Company reported an after-tax profit of $276,000, or $0.05 per share on a diluted basis.

AS&E develops and manufactures sophisticated X-ray inspection products for critical detection and security applications. These systems are solving an expanding range of inspection problems, including detecting car and truck bombs, combating weapons smuggling, and imaging cargo to expose trade fraud and illegal immigration. AS&E's patented Z(R)Backscatter technology detects plastic explosives, illegal drugs, and other contraband, even when artfully concealed in complex backgrounds by terrorists and smugglers. AS&E's High Energy Systems Division manufactures linear accelerators for a variety of applications including medical, scientific, security, electron beam curing and non-destructional testing. For more information on AS&E products and technologies, please visit the Company's web site at http://www.as-e.com.

                AMERICAN SCIENCE AND ENGINEERING, INC.
                    CONSOLIDATED FINANCIAL SUMMARY
      (Dollars and shares in thousands, except per share amounts)


                     Three Months Ended           Twelve Months Ended
                                                      (audited)
                        Mar. 31,    Mar. 31,     Mar. 31,     Mar. 31,
                          2001        2000        2001          2000

Net sales and
 contract revenue       $ 18,564    $ 13,682    $ 67,111    $ 60,674

Gross profit               4,248       3,256      16,219      17,180

Sales, general, and
 administrative expenses   2,512       2,646       9,688      10,480

Research and
 development expenses      1,295       1,926       5,060       5,902

Operating income             441      (1,316)      1,471         798

Other expense               (167)        (83)       (666)       (332)

Income before provision
 for (benefit from)
 income taxes                274      (1,399)        805         466

Provision for
 (benefit from)
 income taxes                  7      (1,675)        145        (993)

Net income              $    267    $    276    $    660    $  1,459

Income per common
 share - Diluted        $   0.05    $   0.05    $   0.13    $   0.29

Shares used in income
 per share calculation -   5,005       5,042       5,006       5,021
 Diluted

The results of operations reported herein may not be indicative of future financial conditions or results of future operations.

Safe Harbor Statement

The foregoing press release contains statements concerning the Company's financial performance and business operations, which may be considered "forward-looking" under applicable securities laws. The Company wishes to caution readers of this press release that actual results might differ materially from those projected in any forward-looking statements.

Factors which might cause actual results to differ materially from those projected in the forward-looking statements contained herein include the following: significant reductions or delays in procurements of the Company's systems by the United States and other governments; disruption in the supply of any sole-source component incorporated into the Company's products (of which there are several); litigation seeking to restrict the use of intellectual property used by the Company; potential product liability claims against the Company; global political trends and events which affect public perception of the threat presented by drugs, explosives and other contraband; global economic developments and the ability of governments and private organizations to fund purchases of the Company's products to address such threats; and the potential insufficiency of Company resources, including human resources, capital, plant and equipment and management systems, to accommodate any future growth. These and certain other factors which might cause actual results to differ materially from those projected are more fully set forth under the caption "Forward-Looking Information and Factors Affecting Future Performance" in the Company's Registration Statement on Form 10-K.