American Science and Engineering, Inc. Reports a 22% Increase in First Quarter FY'00 Revenues.

BILLERICA, Mass.--(BUSINESS WIRE)--July 29, 1999--

American Science & Engineering, Inc. (AMEX:ASE) today reported revenues of $14.3 million and operating profits of $346,000 in its first fiscal quarter ended June 30, 1999. Compared to the year ago quarter, revenues increased by 22% and operating profits declined by 62%, and compared to the fourth quarter of FY 1999, revenues declined by 5% and operating profits declined by 42%. These results are in line with our previous announcements.

The Company reported after tax profits of $192,000 and earnings per share of $.04 in the current quarter, compared to $348,000 and $.07 per share in the previous quarter.

Ralph Sheridan, President and CEO, stated, "This quarter's financial results reflect two factors previously cited: the catch up investment in operational infrastructure and heavy legal expense in defense of intellectual property. The company is investing aggressively in engineering methodology, manufacturing processes, quality and international support capability. All are necessary to advance equipment system performance, reliability and client support. First quarter profitability was further reduced by larger than planned legal spending to defend encroachment against our intellectual property. The two pillars of AS&E(R)'s technology position are our significant continuing investments in research and development and the proactive protection of our intellectual property.

"We accomplished major milestones during the quarter. In May, we achieved client acceptance on two critical projects: a fixed-site CargoSearch(tm) system on the Abu Dhabi land border with Saudi Arabia and our first relocatable ISOSearch(tm) system to inspect sea containers at the Port of Durban, South Africa. These successes position AS&E for further orders in these regions. Our ParcelSearch(tm) business was very strong as we shipped a record number of Model 66Z systems under a contract to protect high-threat government facilities throughout the world. We also continued on-schedule shipments under our $35 million Egyptian Customs contract for 10 CargoSearch systems.

"In summary, we continue to invest aggressively in operational infrastructure, intellectual property protection, technology, and international market development, thereby strengthening the foundation for the planned increase in revenue growth."

AS&E develops and manufactures sophisticated X-ray inspection products for critical detection and security applications. 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. For more information on AS&E products and technologies, please visit the Company's web site at http://www.as-e.com. -0-

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

                                                Three Months Ended

                                               June 30,       June 30,
                                                 1999           1998

Net sales and                                 $14,316         $11,692
contract revenue

Operating Income                                  346             914

Other Income (Expense)                           (37)            (38)

Income before provision for income taxes          309             876

Provision for income taxes                        117             350

Net income                                    $   192         $   526

Income per common share                       $   .04         $   .10

Shares used in income per share calculation     5,018           5,111

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 statement 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; 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 "Risk Factors" in the Company's Registration Statement on Form S-3 (SEC File No. 333-9151).