Applied Microbiology reports second quarter results.

TARRYTOWN, N.Y.--(HealthWire)--Jan. 17, 1996--Applied Microbiology Inc. (NASDAQ: AMBI) announced results for the second quarter of fiscal 1996 that ended Dec. 31, 1995.

Sales increased 24% to $3,042,000 compared to $2,451,000 for the second quarter of the previous year. The company reported a net loss of $748,000 for the second quarter of fiscal 1996 ($.05 per share) compared to a net loss of $38,000, or less than $.01 per share in the same period in fiscal 1995.

For the six months ended Dec. 31, 1995, sales increased by 4% to $5,243,000 as compared to $5,059,000 for the first six months of the previous year. The company reported a net loss of $1,844,000 ($.11 per share), for the six months ended Dec. 31, 1995, compared to net income of $393,000, or $.02 per share in the same period in fiscal 1995.

In commenting on second quarter performance, Fredric D. Price, the company's president and chief executive officer, said, "Sales of both food preservatives and dairy starter cultures increased over the prior period. Net losses for the quarter and the first six months are due to a greater proportion of sales of lower margin dairy products, a planned increase in research and development expenses for pharmaceutical products, and pre-launch investment spending necessary for the introduction of the company's two new products: Wipe Out(TM) Dairy Wipes and Cardia(TM) Salt Alternative, which are expected to be launched in February and March, respectively."

The company also noted that the $8.3 million in net proceeds from a private placement of convertible preferred stock, which occurred in October, 1995 is now included in the second quarter financial statements.

Applied Microbiology Inc. sells Food Ingredients in more than 40 countries and is developing Special Dietary Foods and Pharmaceuticals. Its headquarters and pharmaceutical research activities are located in New York and it has food research as well as pharmaceutical and food manufacturing facilities in the United Kingdom. -0-

                      Applied Microbiology Inc.
           Condensed Consolidated Statements of Operations
                 (in thousands except per share data)

                                Three Months Ended      Six Months Ended
                                       Dec. 31               Dec. 31
                                 1995          1994      1995       1994

Sales                           $3,042        $2,451   $5,243     $5,059
Other operating revenue             55            73      105        142
Total revenues                   3,097         2,524    5,348      5,201
Cost of sales                   (1,341)         (833)  (2,490)    (1,618)
Gross profit                     1,756         1,691    2,858      3,583
Selling, general &
 administrative expenses        (1,696)       (1,130)  (3,219)    (2,156)
Research costs                    (626)         (303)  (1,098)      (599)
Depreciation & amortization       (209)         (158)    (395)      (308)
Operating (loss)/income           (775)          100   (1,854)       520
Interest income                     98            28      118         76
Interest expense                   (23)           (3)     (49)        (5)
(Loss)/income before
 tax expense                      (700)          125   (1,785)       591
Tax expense                        (48)         (163)     (59)      (198)
(Net loss)/income                 (748)          (38)  (1,844)       393
(Loss)/earnings per share       ($0.05)          --     (0.11)   $  0.02
Average outstanding shares      18,277        18,164   18,229     18,161
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                        Applied Microbiology Inc.
               Condensed Consolidated Balance Sheets
                          (in thousands)

                                      12/31/95         6/30/95
                                    (Unaudited)         (Note)
Assets
Current assets
 Cash                                   $8,548            $3,337
 Accounts Receivable                     2,508             2,463
 Inventories                             2,944             2,865
 Other assets                            1,045               694
Total current assets                    15,045             9,359

Property and equipment net               3,843             3,446
Patent Costs                             1,168               881
Other assets                                60               102
                                       $20,116           $13,788

Liabilities, Redeemable Preferred Stock and
 Stockholders' Equity
Current liabilities
 Current Portion of
  Notes Payable and Lease Obligation      $227              $149
Accounts Payable and
  Accrued Expenses                         772             1,306
Other Current Liabilities                  765               571
Total Current Liabilities                1,764             2,026
Note Payable and Lease Obligation        1,033               770
Deferred Taxes                             355               367
Total Liabilities                        3,152             3,163
Redeemable Preferred Stock               1,500             1,500
Stockholders' Equity                    15,464             9,125
Total Liabilities, Redeemable Preferred
 Stock, & Stockholders' Equity         $20,116           $13,788

Note: The Balance Sheet as of June 30, 1995 has been derived from
audited consolidated financial statements at that date.
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CONTACT: AMBI

Peter E. Herring, 914/345-6819

or

Emer Leahy, 914/345-6809