Cytyc Corporation announces second quarter and six month financial results.

BOSTON--(BUSINESS WIRE)--July 16, 1996--Cytyc Corporation (NASDAQ:CYTC) today reported results of operations for the second quarter and six months ended June 30, 1996.

For the 1996 second quarter, Cytyc reported revenues of $1.7 million compared to $1.3 million in the same quarter of 1995. The net loss for the quarter ended June 30, 1996, was $2.8 million, or $0.20 per share, compared to a net loss of $1.2 million, or $0.11 per share for the second quarter of 1995.

For the six months ended June 30, 1996, revenues grew to $2.8 million, from $1.9 million reported for the comparable period of 1995. The net loss for the six-month period ended June 30, 1996, was $5.4 million, or $0.44 per share, compared to a net loss of $2.7 million, or $0.25 per share for the same period last year.

"Cytyc achieved several milestones during the second quarter," said Patrick J. Sullivan, President and Chief Executive Officer. The most significant event of the quarter was U.S. Food and Drug Administration clearance of the ThinPrep System as a replacement for the Pap smear in screening for cervical cancer. With FDA clearance, Cytyc began marketing the ThinPrep System to clinical laboratories and managed care organizations and we are very excited by the initial reaction of laboratories to the clinical and economic advantages of the ThinPrep Pap Test."

Commenting on market acceptance of the ThinPrep System, Mr. Sullivan continued "Since the beginning of the year, Cytyc has increased its installed base of ThinPrep instruments capable of preparing cervical samples by more than 50%. Our current installed base of instruments is capable of preparing more than ten million cervical samples annually."

"As a further indication of our growth and the first step in expanding our production capacity, Cytyc moved to a larger facility during the second quarter," said Mr. Sullivan. "Cytyc's new headquarters and manufacturing facility in Boxborough, Massachusetts, is 51,000 square feet, or about three times the size of our former facility. We also expanded our sales, marketing and customer training staff during this quarter in preparation for the market launch of the ThinPrep System for cervical cancer screening."

Commenting on the second quarter, Mr. Sullivan stated, "The results for the second quarter and the first half of 1996 are on target with our growth plan. Improved revenues are attributable to increased sales of ThinPrep instruments and disposable test kits. The increase in expenditures is directly related to our expanded sales and marketing efforts to launch the ThinPrep Pap Test and move to the larger facility."

Mr. Sullivan concluded, "The second quarter of 1996 was a very productive period for Cytyc. We are diligently implementing our plan for making the ThinPrep Pap Test the standard of care for cervical cancer screening and remain focused on growing our business during the remainder of 1996."

Cytyc Corporation develops, manufactures and markets the ThinPrep System for medical diagnostic applications. The ThinPrep System consists of the ThinPrep 2000 Processor and related reagents, filters and other suppliers. Cytyc Corporation has marketed ThinPrep since 1991 for use in the diagnosis of cancers including lung, bladder and gastrointestinal tract and in the preparation of fine needle aspiration of thyroid and breast. The Company commenced marketing the ThinPrep System for cervical cancer screening on May 20, 1996 following FDA clearance. Cytyc's headquarters, research, development and manufacturing facilities are located in Boxborough, Mass.

Securities and Exchange Commission Information:

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including, without limitation, risks associated with the Company's dependence on a single product, uncertainty of market acceptance, and limited number of customers, as well as risks of downturns in economic conditions generally, and in the health care industry specifically, risks associated with competition and competitive pricing pressures, and other risks detailed in the Company's filings with the Securities and Exchange Commission. -0-

                            Cytyc Corporation
                   Condensed Statements of Operations
                (In thousands, except per share amounts)
                               (Unaudited)

                              Three Months Ended     Six Months Ended
                                   June 30,              June 30,
                                 1996      1995       1996      1995

Net sales                     $ 1,680   $ 1,253      $ 2,794   $ 1,864
Cost of sales                   1,091       580        1,825     1,048
Gross profit                      589       673          969       816
Operating expenses:
 Research & development         1,311       893        2,177     1,679
 Sales & marketing              1,962       578        3,670     1,091
 General & administrative         795       326        1,439       660
Total operating expenses        4,068     1,797        7,286     3,430
Loss from operations           (3,479)   (1,124)      (6,317)   (2,614)
Other income                      715       (33)         885       (63)
Net income (Loss)            $ (2,764) $ (1,157)    $ (5,432) $ (2,677)
Loss per share                  $(.20)    $(.11)       $(.44)    $(.25)
Shares used in completion      13,612    10,868       12,246    10,808

                              Cytyc Corporation
                               Balance Sheets
                               (in thousands)

                                        June  30, 1996  December  31, 1995
Assets
 Current assets:
   Cash                                      $ 50,272        $ 7,902
   Accounts receivable                            956          1,323
    Prepaid expenses and other current assets     441             48

     Inventories                                  990            753

 Total current assets                          52,659         10,026

   Fixed assets                                 4,822          1,956
   Accumulated depreciation                    (1,038)       (1,016)
      Total fixed assets                        3,784            940

   Other assets                                   488             59

 Total assets                                $ 56,931       $ 11,025

Liabilities and Stockholders' Equity:
 Current liabilities:
   Accounts payable                            $1,703         $1,254
   Payroll payable                                478            204
   Accrued taxes                                  160            147
   Accrued expenses                             1,551          1,066
   Deferred income                                326            276

 Total current liabilities                      4,218          2,947

Stockholders' Equity:
   Capital stock                               93,333         43,266
   Accumulated deficit                        (40,620)      (35,188)
 Total stockholders' equity                    52,713          8,078

Total Liabilities and Stockholders' Equity   $ 56,931       $ 11,025

CONTACT: Cytyc Corporation

Investor Contact:

Joe Kelly 

Chief Financial Officer

508/263-8000