SANTA CLARA, Calif., Nov. 9 /PRNewswire/ -- Applied Imaging Corp.
(Nasdaq: AICX) announced that it had achieved record third quarter revenues of
$4.0 million, an increase of $0.9 million (29 percent) compared to the 1999
third quarter.  These results were achieved despite the unfavorable impact of
the strong U.S. dollar during the period.  On a comparable exchange rate
basis, sales growth was 32 percent versus last year's quarter.  The net loss
for the quarter was cut to $0.9 million ($0.07 per share) from the
$2.0 million loss recorded in last year's third quarter, a reduction of
$1.0 million (52 percent).
    The company's sales for the nine months ending in September 2000 were at a
record level of $12.0 million, up $3.1 million (35 percent) from the same
period of 1999.  In addition, the net loss for nine months narrowed to
$2.8 million, down from the year ago net loss of $4.9 million, a decrease of
$2.1 million (43 percent).  The company is on track to profitability in 2001.
    The improving net loss trend has been achieved through increased sales and
a focus on improving operational effectiveness.  Gross profit as a percent of
sales increased by approximately four percentage points in both the quarter
and the nine-month period this year versus last year.  Operating expenses were
9 percent below last year in the quarter and flat compared to last year's
first nine months.
    "We are very pleased by the company's continued strong performance in the
third quarter and first nine months of this year," commented Jack Goldstein,
PhD, Chairman and CEO.  "We continue to see favorable results from our
strategy of developing sales of the new Genus and MDS(TM) products while
leading consolidation within our core genetic testing market.  New product
sales totaled 14 percent of our instrument revenues during the first nine
months of the year."
    "We further strengthened our market position in the third quarter with the
previously-announced acquisition of the US-based genetic imaging business of
Perceptive Scientific Instruments, LLC.  The integration of this Texas-based
operation into our business was completed in September, ahead of schedule,"
added Goldstein.
    "The company achieved another important milestone in the third quarter
when it received clearance from the U.S. Food and Drug Administration (FDA) to
market the MDS(TM) system for detecting micrometastatic cells associated with
the spread of cancer.  The MDS(TM), a scanning microscopy platform, has been
cleared for in vitro diagnostic use as an aid to pathologists in the detection
and classification of specific rare cancer cells in bone marrow specimens.  We
believe that we are extending our lead in the identification and genetic
characterization of clinically-significant cancer cells, such as
micrometastases," concluded Goldstein.

    Applied Imaging Third Quarter Earnings Conference Call
    Senior management of Applied Imaging will present an overview of results
for the quarter during a conference call that will follow this release at
2:00 p.m. PST.  Interested parties have the opportunity to listen to the
conference call live on the Internet through http://www.vcall.com .  A replay
of the webcast on Vcall will be available for 90 days.  A replay of the call
will be available through November 16 by dialing 888-266-2086 or 703-925-2435,
code #4651482.

    About Applied Imaging
    Applied Imaging Corp., based in Santa Clara, California, is the leading
supplier of automated imaging systems utilized in genetics and pathology
laboratories for the analysis of chromosomes in cancer and prenatal disorders.
The Company is expanding its efforts in scanning and imaging applications in
the cancer pathology field.  Applied Imaging has installed over 2000 systems
in 1000 laboratories in more than 35 countries.

    This press release contains forward looking statements as defined in the
Private Securities Litigation Reform Act of 1995, regarding, among other
matters, the Company's future financial performance as well as its research
and development and product development efforts.  Forward looking statements
address matters that are subject to a number of risks and uncertainties,
including the uncertainty of clinical studies and regulatory approvals.
Actual results could differ materially from those projected in the forward-
looking statement as a result of a number of factors including the failure of
the Company to successfully develop and commercialize its micrometastasis or
genetic instrument business, and other such factors as set forth in the
Company's form 10-K for the year ended December 31, 1999 as filed with the
Securities and Exchange Commission.

    For additional information on Applied Imaging via fax, please dial
1-800-PRO-INFO, (732-544-2850 outside of the U.S.), code AICX.


                      Applied Imaging Corp. and Subsidiaries
                 Condensed Consolidated Statements of Operations
                 (Unaudited, in Thousands, Except per Share Data)

                             Three months ended          Nine months ended
                               September 30,               September 30,
                             2000          1999          2000          1999

    Revenues                $3,982        $3,098      $11,984        $8,904
    Cost of revenues         1,756         1,506        5,172         4,209
      Gross profit           2,226         1,592        6,812         4,695

    Operating expenses
      Research and
       development             743         1,211        2,599         3,432
      Sales and marketing    1,568         1,500        4,556         3,695
      General and
       administrative          777           706        2,145         2,123
      Amortization of
       intangibles              77            61          203             -
      Restructuring costs        -             -            -           285
       Total cost and
        expenses             3,165         3,478        9,503         9,535

    Operating Loss            (939)       (1,886)      (2,691)       (4,840)

    Other income (expense),
      net                       (7)         (93)          (80)          (36)

    Net loss                 $(946)     $(1,979)      $(2,771)      $(4,876)

    Net loss per share--
      basic and diluted     $(0.07)      $(0.17)       $(0.21)       $(0.40)

    Weighted average
      shares outstanding    13,762        11,952       13,428        12,040


                      Condensed Consolidated Balance Sheets
                                  (In Thousands)

                                                   September 30, December 31,
                                                      2000           1999
                                                   (Unaudited)

    ASSETS
    Cash and marketable securities                    $4,785         $8,406
    Other current assets                               8,446          7,886
    Property and equipment, net                        1,154          1,014
    Other assets, net                                  2,792          2,438
    Total Assets                                     $17,177        $19,744

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities                               $8,450         $9,160
    Other liabilities                                  1,072          1,972
    Stockholders' equity                               7,655          8,612
    Total Liabilities and Stockholders' Equity       $17,177        $19,744

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