Serologicals Reports Second-Quarter Earnings.

ATLANTA--(BUSINESS WIRE)--July 27, 1999--

Serologicals Corporation (Nasdaq/NM:SERO) today reported revenues and earnings for the second quarter and six months ended June 27, 1999.

Revenues for the second quarter of 1999 totaled $32.7 million compared with $30.2 million in the year-earlier period. Net income for the second quarter amounted to $2.8 million, or $0.11 per diluted share, versus $4.1 million, or $0.16 per diluted share, a year ago. Revenues for the six months totaled $72.3 million compared with $59.7 million in the year-earlier period. Net income for the six months amounted to $7.4 million, or $0.29 per diluted share, versus $7.9 million, or $0.31 per diluted share, a year ago.

The weighted average shares outstanding and per share results for the year-earlier periods have been adjusted to reflect the 3-for-2 stock split that was distributed to stockholders on August 14, 1998.

Tenoso said, "The decline in profitability for the quarter was due primarily to factors we have previously discussed. These include lower-than-expected shipments of anti-D and increasing production costs per unit incurred in the collection of non-specialty antibodies, which are used primarily to manufacture Intravenous Immune Globulin (IVIG). We additionally believe that due principally to these developments, earnings in both the third and fourth quarters will also be lower than in the comparable periods of 1998."

Tenoso said, "Our assessment of market trends indicates that end-use demand remains strong for the therapeutic and diagnostic products for which our antibodies are essential components. These dynamics reinforce our confidence about the longer term potential for our specialty antibodies including anti-D, which has a number of uses including preventing Rh incompatibility in newborns. However, our shipments of anti-D for 1999 are expected to be approximately 25-30% lower than last year, due primarily to the previously disclosed cancellation of orders by two international customers. We also believe that inventories of anti-D and Rh Immune Globulin in the manufacturing and distribution channels are currently higher than recent historical levels, and the available supply of anti-D from other collectors has also increased. Although we are seeking to mitigate the effects of this situation by capitalizing on our leadership position in product quality in this market, we currently are not anticipating any significant recovery in our shipments of anti-D over the remainder of this year or into the first half of 2000."

Tenoso added, "For the non-specialty antibodies we collect, we believe end-market demand also remains strong, and we are experiencing increasing demand by our customers. However, we are continuing to incur higher costs per liter due primarily to a relatively static level of collections and rising operating costs. Major reasons for these higher costs are complying with and managing the increasingly stringent regulatory and customer requirements that are prevalent today throughout the worldwide blood products and services industry. The rise in these costs has more than offset the price increases we have been able to obtain in recent years, resulting in a decline in the profitability of this portion of our business. While we anticipate that some enhanced pricing flexibility is likely over the near term, and there may be a longer term opportunity to achieve additional improvement in non-specialty antibody margins, overall market trends suggest that a structural decline has occurred in the profitability of this portion of our business. Therefore, we continue to work together with our customers and advisors on a strategic review of our non-specialty operations and to assess the current dynamics of the market.

"Aside from these near-term challenges in certain of our product lines, we are experiencing gratifying growth in other portions of our business. Our other specialty therapeutic antibodies continue to experience rising demand. Further, the Pentex Blood Proteins operating unit that we acquired last December is making a solid contribution to our results. The Company's Pentex brand of purified proteins is experiencing increased demand. We are especially pleased with the success of the EX-CYTE(R) Growth Enhancement Media Supplement and expect to complete a significant capacity expansion for this product during the fourth quarter, as planned. Our monoclonal antibody operation also continues to grow, primarily as a result of the additional custom and value-added manufacturing services we are providing customers who are increasingly outsourcing these functions."

Tenoso concluded, "While the convergence of industry-wide political, regulatory and economic issues has resulted in some near-term challenges, we are enthusiastic about the long-term prospects for Serologicals, which remains a highly profitable corporation. Supported by our strong financial position, we intend to continue repurchasing our shares as market conditions permit. Since April 1999, when the board of directors approved up to $20.0 million for share repurchases, we have invested $7.1 million to repurchase 945,000 shares. The timing and size of any future purchases will be subject to market conditions. We currently have approximately 23.9 million shares of common stock outstanding. We are also close to finalizing an increased credit facility with a syndicate of banks that will more than double our available borrowings from $35.0 million to $75.0 million.

These funds will be available for general corporate purposes, including share repurchases, acquisitions and other expansion opportunities."

Serologicals Corporation, headquartered in Atlanta, is a leading worldwide provider of biological materials and services to major healthcare companies. The Company provides value-added antibody-based products that are used as the active ingredients in therapeutic products for the treatment and management of diseases such as Rh incompatibility in newborns, rabies and hepatitis and in diagnostic products such as blood typing reagents and diagnostic test kits. Additionally, the Company, through its protein fractionation facility, provides a variety of proteins used in the manufacturing of diagnostic reagents and tissue culture media components for use as additives in biotech products.

This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding the level of earnings the Company may generate in the third and fourth quarters of 1999; the growth of and the longer term potential for the Company's product lines; expected levels of shipments of the Company's anti-D product line through 2000; the Company's position in the specialty antibody marketplace and its plans to capitalize on its leadership position in anti-D; potentially higher prices for non-specialty antibodies in the future and its ability to improve margins on its non-specialty antibody product line; the likely impact of the regulatory environment on the increasing cost of collecting non-specialty antibodies; the expected timing of the completion of the Company's plant expansion; the long-term prospects of the Company; plans to repurchase a portion of the Company's shares; and the amount and timing of the Company expanding its current line of credit facility. These forward-looking statements are subject to certain risks, uncertainties and other factors, including the Company's ability to continue to attract and retain qualified donors; the impact of competition; the available supply of anti-D in the market; the timely completion of the Company's capacity expansion; changes in government and industry mandated regulations or customer specifications; the market for senior debt; and changes in the markets for the Company's products and services, which could cause actual results to differ materially. Additional information on factors that could potentially affect the Company or its financial results may be found in the Company's filings with the Securities and Exchange Commission.

Serologicals and Pentex are registered trademarks of Serologicals Royalty Company. -0-

                       SEROLOGICALS CORPORATION
                         Financial Highlights
               (In thousands, except per share amounts)
                              (Unaudited)

             CONDENSED CONSOLIDATED INCOME STATEMENT DATA
     Quarter and Six Months Ended June 27, 1999 and June 28, 1998

                                                     Quarter Ended
      Six Months Ended
                                  June 27,  June 28,  June 27, June 28,
                                    1999      1998      1999     1998
                                  --------  -------- -------- --------
  Net sales                        $32,730  $30,236   $72,260  $59,670
                                  ========  ======== ======== ========
  Costs & expenses:
    Cost of sales                  $22,906  $19,389   $49,912  $38,528
    Selling, general
       & administrative expenses     4,346    3,516     8,850    7,023
    Product development expenses       185      411       348      745
       Interest expense
         (income), net                  41      (99)       (9)    (372)
    Other expense                      921      774     1,817    1,460

  Net income                        $2,809   $4,094    $7,361   $7,923
                                  ======== ========  ======== ========

 Net income per common share:
    Basic                            $0.12    $0.17     $0.30    $0.33
                                  ======== ========  ======== ========
    Diluted                          $0.11    $0.16     $0.29    $0.31
                                  -------- --------  -------- --------

Weighted average shares
  outstanding:
    Basic                           24,289   23,901    24,436   23,745
                                  ======== ========  ======== ========
    Diluted                         25,122   25,851    25,689   25,746
                                  ======== ========  ======== ========


               CONDENSED CONSOLIDATED BALANCE SHEET DATA

                             June 27,   Dec. 27,
                              1999        1998
                             -------    --------
Cash and cash equivalents       $917    $34,940
Total assets                 150,611    147,331
Total liabilities             17,422     18,322
Stockholders' equity         133,189    129,009