WAYNE, Pa., Oct. 12 /PRNewswire/ -- Escalon Medical Corp. (Nasdaq: ESMC)
today announced record revenue for its fiscal first quarter, which ended
September 31, 2000.  Revenue for the first quarter was $2.6 million, a 17%
increase over fourth quarter revenue of $2.3 million and an 85% increase from
revenue of $1.4 million in the first quarter of fiscal 2000.  The increase in
revenue is expected to lead to a narrowing of the Company's net loss per share
in the first quarter from a net loss of $0.112 per share reported in the
fourth quarter of fiscal 2000.
    With the first stage of Escalon's strategic repositioning complete, the
Company is now focused on niche products that it owns, having sold its
portfolio of previously distributed products.  Revenue is now comprised of
three separate product categories, Sonomed ophthalmic ultrasound diagnostic
devices, vascular access products and the Company's original ophthalmic
equipment business.  In addition, Escalon remains committed to the strategy of
enhancing its current product portfolio by adding unique niche products.  A
joint venture with MegaVision, Inc. was created to develop a high-end digital
camera system for ophthalmologists.  Marketing for the camera is expected to
begin at the Annual Meeting of the American Academy of Ophthalmology on
October 22-25 in Dallas, Texas.
    "We are off to an excellent start in fiscal 2001," said Richard J.
DePiano, Chairman and Chief Executive Officer.  "We believe our current
portfolio of businesses is capable of supporting the Company's infrastructure,
and will serve as a foundation from which to grow.  Based on our early
indications, we currently expect the Company to return to profitability during
fiscal 2001."
    The following is an update on Escalon's divisions:

    Sonomed
    Acquired in January 2000, Sonomed has been fully integrated and is now
poised to realize its full potential.  Revenue in the first quarter was
$1,622,000.  This was an increase of 18% over fiscal fourth quarter 2000
revenue and is the third sequential quarter of revenue improvement.
Additional opportunities exist to expand Sonomed's reach into Europe and the
Far East.

    Vascular Access
    The Company's vascular access business contributed $515,000 to revenue in
the quarter compared to $625,000 in the fourth fiscal quarter of 2000.  The
decline is due to increased inventory levels in the pipeline.  Management is
currently addressing this issue and is also looking to expand the product's
reach beyond cardiac catherization into hematology, oncology and I.V.
therapies.

    Ophthalmic Equipment Business
    Revenue for the Company's original ophthalmic equipment business was
$510,000 in the quarter, a significant improvement over revenue of $223,000 in
the fourth fiscal quarter, which had been impacted by a recent shortage of
ISPAN(TM) gas product supplies.

    Founded in 1987, Escalon develops, markets and distributes ophthalmic
diagnostic, surgical and pharmaceutical products as well as vascular access
devices.  The Company utilizes strategic partnerships to help finance its
development programs and is also seeking acquisitions to further diversify its
product line to achieve critical mass in sales and take better advantage of
the Company's distribution capabilities.  Escalon has headquarters in Wayne,
Pennsylvania and manufacturing operations in Long Island, New York and New
Berlin, Wisconsin.

    Note:  This press release contains statements that are forward-looking,
including statements about the Company's future prospects and its return to
profitability.  They are based on the Company's current expectations and are
subject to a number of uncertainties and risks, and actual results may differ
materially.  The uncertainties and risks include whether the Company is able
to improve upon the operations of Sonomed, the vascular access business and
medical imaging as well as general economic conditions.  Further information
about these and other relevant risks and uncertainties may be found in the
Company's report on Form 10-K, and its other filings with the Securities and
Exchange Commission, all of which are available from the Commission as well as
other sources.

    To receive additional information on Escalon Medical Corp., via fax, at no
charge, dial 1-800-PRO-INFO and enter code ESMC.

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