WAYNE, Pa., Nov. 14 /PRNewswire-FirstCall/ -- Escalon Medical Corp.
(Nasdaq: ESMC) today announced results for its fiscal first quarter ended
September 30, 2002.  For the first quarter of fiscal 2003, Escalon Medical
reported net income of $259,159, or $0.077 per diluted share.  This compares
to net income of $204,315, or $0.062 per diluted share, in the first quarter
of fiscal 2002.
    Revenues for the first quarter of fiscal 2003 increased 3.2% to $3,008,340
compared to $2,915,715 in the first quarter of fiscal 2002.  For the first
quarter, revenue from Sonomed was down 9.0% to $1,389,000 compared to
$1,497,000 in the prior year period.  The softness at Sonomed was related
primarily to weakness in the domestic market and Europe, offset by strength in
Asia.  Product revenue in the Vascular business increased 1.2% to $666,000 in
the first quarter of fiscal 2003 compared to $658,000 in the year ago period.
Revenue in the Company's Medical / Trek business increased by 14.9% to
$840,000 in the quarter from $731,000 in the first quarter of fiscal 2002.
The increase primarily relates to an increase in revenue from one OEM customer
in particular.  Revenue from Silicone Oil was $443,000 in the quarter compared
to $444,000 in the year ago period.  Additional consideration, which is based
upon future sales of Silicone Oil by Bausch & Lomb, is expected to continue
through fiscal 2005.  Revenue in the Digital business unit was $113,000 for
the quarter as a result of Escalon Digital taking over all the operations
related to the CFA Digital Imaging System.  Prior to January 1, 2002, all
revenues had been recognized by the joint venture between the Company and
Megavision.
    The gross margin as a percent of sales was 64.1% in the current quarter
compared to 57.9% in the year ago period.  Benefiting the gross margin was a
favorable product mix at Sonomed combined with higher realized prices due to a
decrease in sales to distributors, and favorable year-over-year component
costs in the Vascular business.  Marketing, general and administrative
expenses increased 12.4% over the first quarter of fiscal 2002 primarily due
to higher personnel related costs including added sales staff for Latin
America and Asia.
    "As we begin fiscal 2003, our business trends remain largely unchanged
from the prior quarter with continued domestic and European weakness,
partially offset by gains in Asia," commented Richard J. DePiano, Chairman and
Chief Executive Officer.
    "At Sonomed, we believe there continues to be opportunities for market
share gains in our international markets and we have been focused on expanding
our sales efforts abroad," continued Mr. DePiano.  "While sales outside of the
U.S. currently account for approximately 20% of our total sales, they make up
closer to 40% at Sonomed.  During the first quarter we brought our European
master distributorship in house and will continue to look for ways to maximize
our presence in the European market.  We also see significant opportunities in
the Far East, particularly in Japan and China.  We are working to expand our
product registrations in Japan and are also in the early stages of forming a
50/50 joint venture with one of our Asian distributors to help expand our
presence in this market."
    "Our targeted research and development program also adds support to our
sales efforts.  We continue to focus on innovation and product quality, and
have been streamlining our product offerings to meet the needs of growing
markets such as refractive and cataract surgery and intraocular lens
implants," added Mr. DePiano.
    Mr. DePiano concluded, "We also continue to build on our progress in the
Vascular business introducing our Doppler Guided IV Needle into new
institutions in the Philadelphia market.  Feedback continues to be positive on
its use in oncology."
    Founded in 1987, Escalon develops, markets and distributes ophthalmic
diagnostic, surgical and pharmaceutical products as well as vascular access
devices.  The Company seeks to utilize 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.  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 the Company's business units, generate cash and identify,
finance and enter into business relationships and acquisitions, uncertainties
and risks related to new product development, manufacturing and market
acceptance of new products, marketing acceptance of existing products in new
markets, research and development activities, including failure to demonstrate
clinical efficacy, delays by regulatory authorities, scientific and technical
advances by the Company or third parties, introduction of competitive
products, third party reimbursement and physician training 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.


                    ESCALON MEDICAL CORP. and SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                     First Quarter Ended
                                                        September 30,
                                                     2002           2001

    Product revenues, net                         $3,008,340     $2,915,715

    Costs and expenses:
      Cost of goods sold                           1,078,919      1,228,262
      Research and development                       190,318        122,786
      Marketing, general and administrative        1,288,128      1,145,598
        Total costs and expenses                   2,557,365      2,496,646
    Income from operations                           450,975        419,069

    Other income and (expenses):
      Equity in income (loss) of unconsolidated
       joint venture                                      --         (8,601)
      Interest income                                    650            889
      Interest expense                              (192,466)      (207,042)
        Total other income and (expense)            (191,816)      (214,754)

    Net income                                       259,159        204,315

    Basic net income per share                        $0.077         $0.062

    Diluted net income per share                      $0.076         $0.062

      Weighted average shares - basic              3,345,851      3,292,184
      Weighted average shares - diluted            3,403,863      3,302,379


    SELECTED BALANCE SHEET DATA:                September 30,      June 30,
                                                     2002            2002
                                                 (unaudited)      (audited)

    Cash, cash equivalents and investments          $164,842       $220,826
    Total current assets                           4,404,402      4,287,590
    Total assets                                  16,902,761     16,912,441
    Current liabilities                            4,974,091      4,527,697
    Long-term debt                                 4,476,160      5,191,393
    Total shareholders' equity                     7,452,510      7,193,351

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