Gargiulo Group issues BUY on Laserscope stock.

NEW YORK--(BUSINESS WIRE)--Jan. 27, 1997--The Gargiulo Group, a subsidiary of Oscar Gruss & Son Inc., has initiated coverage of Laserscope(R)(a), San Jose, Calif., with a BUY recommendation

Justin Tang, analyst for Gargiulo, views Laserscope, one of the largest medical laser companies in the world, as a turnaround story. Laserscope is listed on the NASDAQ, symbol: LSCP.

After difficulties in 1995, Laserscope reorganized and became profitable in 1996. Tang believes the stock remains at depressed price levels. He forecasts robust revenue growth and 25%+ EPS increases over the next three years.

Laserscope stock's price has begun its recovery, rising from $2-1/8, in January 1996 to $6-5/8 in January 1997, and Tang believes it still has the momentum to double.

Laserscope's EPS has emerged from a loss of $0.51 in 1995 to a profit of $0.09 for the first three quarters of 1996. EPS for FY1996 are expected to grow to $0.15, which is expected to grow 153% to $0.38 in FY1997.

If current trends of 10% growth in revenues and significant decreases in the percentage of SG&A continue, Laserscope should reach his EPS estimates.

Successful reorganization and acquisitions are the basis of the story behind Laserscope. In 1996, Laserscope merged with Heraeus Surgical to form a major medical laser company. Tang views laser companies with size and breadth of product line as the ones best positioned to excel in the competitive, over-populated medical laser industry.

The company also has short-term, mid-term and long-term strategies in place. In the short-term, the company's focus is on the dermatology market's use of their Aura(TM) and Paragon Laser Systems. The Aura is used to treat spider veins, and costs $69,000 compared to the competitions' $130,000 technology.

The Paragon is a new CO2 laser for the skin resurfacing market, and in terms of cost, it has competitive advantages over the products of its rivals, Laser Industries Inc. and Coherent Corp. Also, Laserscope uses innovative marketing techniques to launch new products and services.

Laserscope has mid-term opportunities in the ceiling mounted equipment organizer and smoke evacuation system medical markets, where it holds prominent positions. Laserscope's long-term opportunity is to market medical lasers for use in the emerging cancer treatment therapies.

Laserscope is well positioned in alliance with QLT PhotoTherapeutics Inc., which is developing experimental techniques aimed at treating various forms of cancer. In this exciting area, the upside potential is from Laserscope's involvement, from their infancy, in these new methods for treating, and possibly curing, cancers.

Tang expects Laserscope stock's price to increase from $6-5/8 to the $12 to $15 range within the next 18 months. He gives a detailed account of Laserscope's markets, products, operations, marketing and management in this 16-page report. The report can be obtained at the Gargiulo Group headquarters, 212/952-1220. -0-

(a) Oscar Gruss & Son Inc. currently makes a market in this security and may have a long or short position in connection with this activity. The Gargiulo Group, a division of Oscar Gruss & Son Inc., has been retained by Laserscope to organize a series of investor presentations, and will be reimbursed by Laserscope for travel and other expenses related to these meetings. -0-

Investment Rating: STRONG BUY: expected total annual return of greater than 25% over the next 12-18 months; BUY: expected total annual return in the range of 15-25% over the next 12-18 months; HOLD: stock is fairly valued and should provide returns which approximate returns expected from the broad market over the next 12-18 months; UNATTRACTIVE: stock is overvalued based on current and projected E.P.S., cash flow and dividend rate, and should underperform the broad market and the company's peer group over the next 12-18 months; SELL: stock is significantly overvalued based on current and projected E.P.S., cash flow and dividend rate, and should materially underperform the broad market and the company's peer group over the next 12-18 months. Other factors considered in the Investment Rating include the company's risk profile, including earnings predictability, financial position, industry position, technology risk, product risk, and other factors. The required annual return for a specific investment rating will be increased for stocks with greater financial, business, and/or earnings risk.

Note: Oscar Gruss & Son Inc. makes a market in this security and may have a long or short position in this security in connection with this activity.

This report is based upon information which Oscar Gruss & Son Inc. believes to be reliable. However, neither we nor any individual acting on our behalf can guarantee the accuracy or completeness of its contents. It does not purport to contain a complete analysis of every material fact concerning any company, industry or security. We assume that it will be read in conjunction with other available reports and data. Opinions expresses herein are subject to change without notice. No investor can assume that reliance on the views, opinions or recommendations contained herein will produce profitable results. We and/or our employees and affiliates may have positions in securities which are referred to herein and may make purchases or sales thereof while this report is in circulation. Further information is available upon request. Foreign currency-denominated securities are subject to fluctuations in currency exchange rates that could have a positive or adverse effect on an investor's return upon the conversion into local currency of dividends or interest received, or proceeds from the sale of such securities. In addition, the value of U.S. dollar-denominated ADRs and the value of U.S. dollar-denominated ordinary shares, or common shares, of foreign issuers can be influenced by fluctuations in currency exchange rates.

CONTACT: The Gargiulo Group

Justin Tang, 212/952-1220