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ENHANCED IMAGING TECHNOLOGIES ENTERS INTO NEW CREDIT FACILITY & RESTRUCTURES DEBT; FOURTH QUARTER OUTLOOK PROVIDED

 IRVINE, Calif., Jan. 7 /PRNewswire/ -- Enhanced Imaging Technologies Inc. (NASDAQ: EITI) today announced that it has entered into a new credit facility with Bank of America. The $9-million facility replaces a $5-million secured credit line and includes a $4-million unsecured term loan.
 According to Jack Worley, chief financial officer of Enhanced Imaging, the company intends to use the unsecured portion of the new facility to prepay $3,625,000 of its term obligation to the State of Wisconsin Investment Board (SWIB). The SWIB notes bear interest at 11 percent, whereas the new bank facility has a fixed rate of 6.75 percent. Because the SWIB notes include an original issue discount, the prepayment is expected to result in a nonoperating, noncash charge to fourth quarter earnings of 8 cents per share, while significantly lowering overall interest costs in 1993 and 1994. In a related transaction, the company accelerated payment to Daniel T. Reiner of approximately $1.8 million in 10-percent indebtedness that arose from the acquisition of the company's Optical Devices Inc. subsidiary (ODI) from Reiner in July 1991. The Reiner prepayment was financed out of working capital. Worley commented, "The net effect of this debt restructuring is expected to result in a total savings of approximately $1,111,000 in interest costs over 1993 and 1994."
 Worley also provided an outlook on fourth quarter results. "Fourth quarter net revenue will be up from both the same quarter of 1991 and the third quarter of 1992. However, fourth quarter operating results will be negatively impacted primarily by lower operating income at ODI, reflecting soft sales and lower margins and, to a lesser extent, by higher than expected costs of integrating the two businesses acquired by Vari-X druing the quarter," said Worley. "As we look ahead to 1993, we believe that the Vari-X subsidiary will continue to make positive progress. However, the short term outlook for ODI will be affected by the decision of a significant customer not to renew its purchase agreement with ODI. The customer plans to begin production of its own line of optical filter products," he added. The agreement expires in March 1993. Sales to this customer accounted for approximately $3.9 million, or an estimated 28 percent of ODI's net revenue in 1992.
 Concurrently, Enhanced Imaging's board of directors has appointed Andrew G. Hofmann, 44, chief operating officer of Enhanced Imaging, to assume the responsibilities of Daniel T. Reiner, 40. Reiner, who was president and chief executive officer of ODI, will continue as a member of Enhanced Imaging's board of directors and will be available as a consultant to the company through 1994. In addition, Hofmann has announced the appointment of Donald L. Keehn, 59, as vice president, market development of ODI. Keehn, formerly product line manager of Optical Coating Laboratories' anti-glare filter product line, is considered a leading executive in the emerging optical filter industry.
 "We feel very fortunate to have been able to attract Don Keehn to our company," said Hofmann. "Under his direction, we are embarking on an aggressive program to build ODI's optical filter business and to develop new optical filter products and compatible product lines."
 Enhanced Imaging Technologies Inc. operates through two wholly owned subsidiaries Vari-X Inc. and Optical Devices Inc. As a result of the recent acquisitions of Cine-Cath Imaging and Cine Film Systems, Vari-X is now the leading supplier of specialized films and film-related imaging products and services designed to optimize the quality of cardiac images produced in cardiac catheterization laboratories. Its products include cine angiography film manufactured by AGFA, Ilford and duPont, digital imaging products and numerous related accessories. Optical Devices develops, manufactures and markets optical filters that enhance the image quality and safety of electronic visual displays. Many of Optical Devices' products are distributed under the Vu-Tek(R) or Vu-Pro-Tek(R) name.
 -0- 1/7/93
 /CONTACT: David Walke or Miriam Adler, 212-986-5900, or Doug Sherk or Ken Dennard, 415-296-7383, all of Morgen-Walke for Enhanced Imaging/
 (EITI)


CO: Enhanced Imaging Technologies Inc.; Bank of America;
 State of Wisconsin Investment Board; Optical Devices Inc.;
 Vari-X Inc. ST: California, Wisconsin IN: SU: RCN ERP


GT-TB -- SF008 -- 2778 01/07/93 16:05 EST
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Date:Jan 7, 1993
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