North American Scientific Reports Fourth Quarter and Year End Financial Results.

Business Editors

CHATSWORTH, Calif.--(BUSINESS WIRE)--Dec. 17, 2002

North American Scientific, Inc. (NASDAQ:NASI) today announced financial results for its fourth quarter and fiscal year ended October 31, 2002.

For the fourth quarter ended October 31, 2002, the Company reported record net sales of $5.6 million, a 10% increase over the $5.1 million reported for the fourth quarter of 2001. Net loss for the fourth quarter was $142,000, or $0.01 per share, compared with net income of $93,000, or $0.01 per share, for the prior year quarter.

For the year ended October 31, 2002, net sales were a record $20.8 million, a 7% increase compared to net sales of $19.3 million for fiscal year 2001. Net loss for fiscal year 2002 was $5.2 million, or $0.51 per share, versus a net loss of $2.0 million, or $0.20 per share, for fiscal year 2001.

Pro forma net loss for fiscal year 2002 was $0.5 million, or $0.05 per share, compared with pro forma net income of $0.4 million, or $0.04 per share, for fiscal year 2001. These pro forma amounts exclude one-time charges of $2.7 million for the write-off of certain first-generation Apomate(TM) technology costs associated with the adoption of the improved Hynic linking agent technology and $2.0 million for the write-down of net deferred tax assets in the second quarter of fiscal 2002, and also exclude a one-time charge of $2.4 million, net of the income tax benefit, for the write-off of linear accelerators in the third quarter of fiscal 2001.

At October 31, 2002, the Company's cash and marketable securities totaled $55.9 million.

The Company's brachytherapy products have been primarily marketed by Mentor Corporation pursuant to an agreement which expires on January 31, 2003. However, as a result of Mentor's failure to achieve the required market share as outlined in the contract for Palladium-103 seeds, North American Scientific recently exercised its right to directly market those seeds. Beginning February 1, 2003, the Company will begin to market Iodine-125 seeds as well. Products previously sold pursuant to the Mentor agreement under the trade names IoGold(R) and Pd-Gold(R) will be made available by the Company under its own trade names Prospera(R)I-125 and Prospera(R)Pd-103, respectively. The Company has developed a sales and marketing plan for this post-contractual period intended to capture higher-margin direct sales of its brachytherapy products and to expand the use of its high quality seed designs in the brachytherapy market.

In support of these goals, North American Scientific previously announced two key appointments to its sales and marketing management team during the fiscal fourth quarter. George Jones was named Executive Vice President, Sales and Marketing, and David Stiles, who joined the Company from Medtronic and previously served as Brachytherapy Marketing Manager at Mentor, will assume the newly created position of Vice President, Brachytherapy Sales and Marketing.

L. Michael Cutrer, President and Chief Executive Officer of North American Scientific, stated, "We have continued to move forward toward our goal of creating a vertically integrated brachytherapy organization that can provide quality products and services directly to health care practitioners. I am particularly pleased with our recent success in recruiting a growing and talented direct sales and marketing force that will assure the continued availability of our high-quality brachytherapy products. We are confident that our in-house resources and field sales force will provide the highest level of service and technical support for medical specialists in the brachytherapy market. In the coming fiscal year, we will strive to expand direct sales of our brachytherapy products beyond historical levels and at higher margins, and will vigorously pursue the Hynic-Annexin development process both in the United States and in the European Union."

The Company has continued to make progress with the clinical development program for its Hynic-Annexin V product candidate. The Company submitted an Investigational New Drug application to the FDA on December 13, 2002 for studies intended to develop additional data on the use of the agent for the early detection of patient response to chemotherapy treatment with initial studies being conducted in non-small cell and small cell lung cancer.

The Company also reported that patient enrollment has begun in its previously announced clinical trials in the European Union in subjects with lung cancer. In addition, a physician-sponsored study of Hynic-Annexin V imaging to determine early therapeutic response of patients with metastatic ovarian cancer has begun in a major European study center. This is the first time the agent has been evaluated in women with this serious disease and the data is expected to be useful in the design of future formal Company-sponsored studies for this indication.

Also during the quarter, at a meeting of the European Association of Nuclear Medicine (EANM), researchers presented data supporting abdominal imaging with Hynic-Annexin V. Two other annexin-related presentations by independent researchers were nominated for the Marie Curie Award of the EANM. These presentations focused on other potential clinical applications for Technetium Tc-99m labeled Annexin V, including evaluation of the cardiac toxicity associated with the anticancer drug, doxorubicin and assessment of intervention in acute myocardial infarction. Clinical studies for the use of Annexin imaging to evaluate interventions intended to limit the damage caused by acute blockage of a coronary blood vessel have been proposed by several investigators. The recognition of the importance of in vivo imaging of cell death in several potentially important research and clinical settings continues to support the belief that Hynic-Annexin V imaging may be an important new clinical technique in the diagnosis and therapeutic management of cancer and heart disease.

A live webcast to discuss North American Scientific's fourth quarter and fiscal year end financial results will be available over the Internet through the Company's Web site at www.nasi.net in the Investor Center beginning at 10:00 a.m. PST on Tuesday, December 17, 2002. For those who cannot listen to the live webcast, a replay of the call will be available at the same site shortly after the call.

Event archives are normally available one to two hours after the event ends. For the live event, listeners should go to the Web site at least fifteen minutes before the event starts to download and install any necessary audio software.

About North American Scientific

North American Scientific designs, develops and produces innovative radioisotopic products, including brachytherapy seeds and radiopharmaceuticals, principally for the treatment and diagnosis of disease. Its lead radiopharmaceutical product candidate is Hynic-Annexin V which is based upon the Apomate(TM) technology platform and is a kit for the preparation of Technetium Tc-99m labeled Annexin V. It is administered intravenously and is intended for the in vivo imaging of apoptosis and necrosis, two common forms of cell death. For more information, please visit the Company's Web site at www.nasi.net.

Statements included in this release that are not historical facts may be considered forward-looking statements that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by the Company including, but not limited to, uncertainties relating to drug discovery and clinical development processes, the impact of competitive products and technological changes, changes in relationships with strategic partners and dependence upon strategic partners for the performance of critical activities under collaborative agreements, uncertainties relating to patent protection and regulatory approval, the stable supply of appropriate isotopes, the impact of competitive products and pricing, research and development estimates, market opportunities, risks associated with strategic opportunities or acquisitions the Company may pursue and the risk factors included in the Company's filings with the Securities and Exchange Commission. Any forward-looking statements contained in this news release speak only as of the date of this release, and the Company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future results or otherwise.

                    NORTH AMERICAN SCIENTIFIC, INC.
                 Consolidated Statements of Operations

                       Three Months Ended           Year Ended
                           October 31,              October 31,
                     ----------------------  ------------------------
                         2002        2001        2002         2001
                     ----------  ----------  -----------  -----------
                           (Unaudited)

Net sales            $5,620,000  $5,117,000  $20,780,000  $19,343,000

Cost of goods sold    2,027,000   1,854,000    7,581,000    6,862,000
                     ----------  ----------  -----------  -----------

     Gross profit     3,593,000   3,263,000   13,199,000   12,481,000

Selling, general and
 administrative
 expenses             2,093,000   1,514,000    6,525,000    6,097,000

Research and
 development          1,958,000   2,154,000    8,951,000    7,602,000

Write-off of licenses
 and equipment               --          --    2,714,000    3,743,000
                     ----------  ----------  -----------  -----------

Loss from operations   (458,000)   (405,000)  (4,991,000) (4,961,000)

Interest and other
 income, net            390,000     551,000    1,834,000    1,886,000
                     ----------  ----------  -----------  -----------

Income (loss) before
 provision (benefit)
 for income taxes       (68,000)    146,000   (3,157,000) (3,075,000)

Provision (benefit)
 for income taxes        74,000      53,000    2,087,000   (1,090,000)
                     ----------  ----------  -----------  -----------

Net income (loss)     $(142,000)    $93,000  $(5,244,000) $(1,985,000)
                     ==========  ==========  ===========  ===========
Earnings (loss) per share:

     Basic                $(.01)       $.01        $(.51)       $(.20)
                     ==========  ==========  ===========  ===========
     Diluted              $(.01)       $.01        $(.51)       $(.20)
                     ==========  ==========  ===========  ===========
Shares used in per
 share calculations:

     Basic           10,249,984  10,156,559   10,209,584    9,782,562
                     ==========  ==========  ===========  ===========
     Diluted         10,249,984  10,688,043   10,209,584    9,782,562
                     ==========  ==========  ===========  ===========


                    NORTH AMERICAN SCIENTIFIC, INC.
                Reconciliation of Pro Forma Adjustments
                              (unaudited)

The following represents a reconciliation (unaudited) of GAAP net
income (loss) to pro forma net income (loss):

                         Three Months Ended          Year Ended
                            October 31,              October 31,
                      ---------------------  ------------------------
                         2002         2001        2002         2001
                      ---------     -------  -----------  -----------
Net income (loss), as
 reported             $(142,000)    $93,000  $(5,244,000) $(1,985,000)

Adjustments to reconcile
 net income (loss), as
 reported, to pro forma
 net income (loss):

    Write-off of licenses
     and equipment, net
     of $1.3 million
     income tax benefit
     in 2001                 --          --    2,714,000    2,433,000
    Write-down of deferred
     tax assets              --          --    2,013,000           --
                      ---------     -------  -----------  -----------

Pro forma net income
 (loss)               $(142,000)    $93,000    $(517,000)    $448,000
                      =========     =======  ===========  ===========
Net income (loss) per share:

     Basic                $(.01)       $.01        $(.05)        $.05
                      =========     =======  ===========  ===========
     Diluted              $(.01)       $.01        $(.05)        $.04
                      =========     =======  ===========  ===========
Shares used in per
 share calculations:

     Basic           10,249,984  10,156,559   10,209,584    9,782,562
                     ==========  ==========   ==========   ==========
     Diluted         10,249,984  10,688,043   10,209,584   10,398,876
                     ==========  ==========   ==========   ==========


                    NORTH AMERICAN SCIENTIFIC, INC.
                 Condensed Consolidated Balance Sheets

                                            October 31,  October 31,
                                                2002         2001
                                            -----------  -----------
Assets

Current assets
     Cash and marketable securities         $55,945,000  $54,342,000
     Trade accounts receivable, net           2,416,000    1,785,000
     Inventories                                596,000      609,000
     Other current assets                     1,839,000    1,739,000
                                            -----------  -----------

          Total current assets               60,796,000   58,475,000

Equipment and leasehold improvements, net     3,264,000    3,606,000

Goodwill                                      3,659,000    3,659,000

Other assets                                  1,416,000    6,941,000
                                            -----------  -----------

          Total assets                      $69,135,000  $72,681,000
                                            ===========  ===========
Liabilities and Stockholders' Equity

Current liabilities
     Accounts payable and accrued expenses   $4,234,000   $2,808,000

Stockholders' equity                         64,901,000   69,873,000
                                            -----------  -----------
          Total liabilities and
           stockholders' equity             $69,135,000  $72,681,000
                                            ===========  ===========