American Science and Engineering, Inc. Receives $8.6 Million in Incremental Funding from DNDO for CAARS Program.

Next Generation Containerized Cargo Inspection System Program Moves Forward Under Existing ID/IQ 

BILLERICA, Mass. -- American Science and Engineering, Inc. (NASDAQ: ASEI) (AS&E([R])), a leader in X-ray detection technology, announced today that the U.S. Department of Homeland Security's Domestic Nuclear Detection Office (DNDO) has released $8.6 million in incremental funding to continue development for the CAARS Program (Cargo Advanced Automated Radiography System). Under the contract, AS&E with its partner, Passport Systems, Inc., will deliver a next-generation cargo inspection system designed to automatically detect shielded nuclear threats at the nation's points of entry. As previously announced, the two-year ID/IQ development phase of the contract is valued at $28.8 million. AS&E was awarded initial funding in September of 2006 at $4.3 million; this latest award brings CAARS funding to $12.9 million.

"The CAARS team is producing solid results to bring this advanced concept to fruition," said Anthony R. Fabiano, President and CEO of AS&E. "The $8.6 million will fund the next steps for research and development to deliver the best solution to secure our ports and borders from shielded nuclear threats. We look forward to our continued work with DNDO on this very significant project for Homeland Security."

After a highly competitive procurement process, DNDO selected AS&E, who with its partner, Passport Systems, Inc., adopted an advanced system concept that combines high-energy X-ray radiography with a unique 3-D X-ray interrogation technique. The system will combine 9 MeV transmission imaging radiography with automatic identification of high atomic number materials such as tungsten, lead, uranium, or plutonium. The system will be dual-use, in that it will meet both the needs of DNDO in detecting nuclear materials, as well as the traditional needs of U.S. Customs and Border Protection in detecting contraband such as illegal drugs.

About AS&E([R])

American Science and Engineering, Inc. (AS&E) is the leading worldwide supplier of innovative X-ray inspection and screening systems. With more than 45 years of experience in developing advanced X-ray security systems, the Company's product line utilizes a variety of technologies, including patented Z([R]) Backscatter([TM]), Shaped Energy([TM]) and Radioactive Threat Detection (RTD). These technologies offer superior detection of threats including plastic explosives, plastic weapons, illegal drugs, other contraband, dirty bombs and nuclear devices. AS&E offers a complete range of X-ray inspection products including Z([R]) Backscatter([TM]) screening systems, CargoSearch([TM]), and ParcelSearch[TM] inspection systems, used for critical detection and security applications to combat terrorism, drug and weapon smuggling, trade fraud, and illegal immigration. AS&E customers include leading governmental agencies, border authorities, military bases, airports and corporations worldwide, including the U.S. Department of Homeland Security, U.S. Department of Defense, U.S. Customs and Border Protection, Royal Thai Police, HM Customs & Excise (U.K.) and Hong Kong Customs. For more information on AS&E products and technologies, please visit www.as-e.com.

About Passport Systems, Inc.

Passport Systems, Inc., founded in 2002 and located in Acton, Massachusetts, is developing next generation scanner solutions to protect the nation's air and seaports, border crossings and key points in the supply chain, by rapidly, non-intrusively and accurately inspecting cargo without impeding the flow of commerce.

Safe Harbor Statement. The foregoing press release contains statements concerning AS&E's financial performance, markets and business operations that may be considered "forward-looking" under applicable securities laws. AS&E 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 source component incorporated into AS&E's products; 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, and future delays in federal funding. These and certain other factors which might cause actual results to differ materially from those projected are detailed from time to time in AS&E's periodic reports and registration statements filed with the Securities and Exchange Commission, which important factors are incorporated herein by reference. AS&E undertakes no obligation to update forward looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in future operating results, financial condition or business over time.