Argonaut Announces Further Progress on Resource Prioritization and Cost Savings.

Business Editors/High-Tech Writers

FOSTER CITY, Calif.--(BUSINESS WIRE)--Aug. 8, 2002

Argonaut Technologies, Inc. (Nasdaq:AGNT) today announced the progress of its ongoing effort to prioritize projects and resources, streamline processes and take action on cost savings programs worldwide. Argonaut is further reducing sales, general and administrative expenses, while continuing its investment in research and development. Actions being taken by Argonaut include a focused approach to improving productivity, reducing operational expenses in remote offices, and reducing personnel based on these improved efficiencies. Argonaut anticipates the reduction in force will total approximately 10% of Argonaut's workforce. Argonaut expects that these actions collectively will result in additional expense reductions of approximately $3 million on an annualized basis. The company expects to take restructuring charges associated with these actions of between $1.8 to $2.2 million in the third quarter ending September 30, 2002.

"We expect to close 2002 with greater than $36 million in cash, cash equivalents and short-term investments, including restricted cash," stated Lissa A. Goldenstein, Argonaut's president and chief executive officer. "We remain focused on achieving cash flow break-even as our primary financial goal."

Goldenstein continued, "We are investing in research and development to improve current chemical development techniques and find others that effectively integrate and accelerate some of the steps required for chemical synthesis and purification. Our future depends on our customers continued success with our instruments and consumables and our continued ability to efficiently develop new and innovative solutions to accelerate chemical development."

Late in 2001, Argonaut instituted a cost savings initiative, which has delivered a reduction in expenses of approximately $4 million on an annualized basis. Based on cost initiatives taken during the integration of the Jones Group in the second quarter ended June 30, 2002, Argonaut further reduced its expenses by about $1 million on an annualized basis. Along with the Jones Group acquisition, these cumulative efforts resulted in Q2 revenue growing by over 100% while operating expenses grew by less than 1% over the prior year period. Based on today's announced efforts and those actions taken over the past eight months, Argonaut's management team has continuously improved operational efficiencies, yet has maintained its ability to deliver quality products to its worldwide customer base and has continued investment in the development of new, novel instruments and consumables.

Goldenstein commented, "We are not standing still and waiting for the capital spending environment to improve. We are aggressively managing our resources to create, over the long-term, a profitable, growing business."

About Argonaut Technologies, Inc.

Argonaut Technologies, Inc. is a leading provider of instruments, chemistry consumables, software, and services designed to accelerate and improve chemical development processes. The company's products are designed to enable chemists to increase productivity, reduce operating costs through automation and process simplification, achieve faster time-to-market, and explore the increasing number of targets and chemical compounds available for drug and chemical development. Argonaut's products are used in more than 1,000 pharmaceutical, chemical, and academic laboratories worldwide. For more information, visit www.argotech.com.

Forward Looking Statements

Statements included in this press release that are not historical in nature may be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of such forward-looking statements include, without limitation, statements regarding anticipated improvements in productivity and expense reductions, expected restructuring charges during third quarter 2002, our cash position at the end of 2002, our plans to invest in research and development, the success of our customers, future demand for our instruments and consumables, anticipated growth in the market for our products and our ability to grow our business and achieve profitability. Any such forward-looking statements reflect the judgment of our management as of the date of this release, and involve risks and uncertainties, including the risk that increasing revenues and decreasing expenses may not be realized as quickly as anticipated or at all and the risk that the current slow period in our industry continues for longer than we expect or deteriorates further, with a reduction in demand for instruments and consumables, each of which could significantly impact our business and results of operations. These and other risk factors are discussed in Argonaut's Annual Report on Form 10-K for the year ended December 31, 2001 filed on April 1, 2002, in its most recent quarterly report on Form 10-Q for the quarter ended March 31, 2002 filed on May 15, 2002, and its other filings with the Securities and Exchange Commission. Argonaut disclaims any intent or obligation to update these forward-looking statements. The Company claims the protection of the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.