SANTA CLARA, Calif., Aug. 6 /PRNewswire/ -- Applied Imaging Corporation
(Nasdaq: AICX) today announced results for the quarter and six months ended
June 30, 1997. Revenues were $3.2 million for the quarter, resulting from
sales of cytogenetic products and services, compared with $3.0 million for the
same quarter in 1996. For the first six months of 1997, revenues were
$6.9 million, an increase of 15 percent compared to $6.0 million for the same
period in 1996. Gross margins increased to 54.3 percent for the first six
months of 1997 from 47.9 percent for the same period in 1996.
    Net loss for the second quarter was $1.9 million or $0.26 per share,
compared to a net loss of $0.6 million or $0.10 pro forma net loss per share
in the second quarter of 1996. Net loss for the first six months of 1997 was
$2.8 million or $0.41 per share, compared to a net loss of $1.2 million or
$0.22 pro forma net loss per share for the first half of 1996. The increased
loss was due primarily to planned increases in development, regulatory and
clinical trial costs associated with the Company's fetal cell screening
program.
    During the second quarter, the Company announced a $4 million private
placement from an affiliate of New Enterprise Associates, an investor in
Applied Imaging with Board representation. In addition, a 510(k) notification
was filed with the FDA for its Fetal Hemoglobin Identification kit on June 30,
1997.
    Jack Goldstein, President and Chief Executive Officer, said, "We are
pleased with our results for the first half of the year. We continue to make
progress in the development of our fetal cell screening product. Nine clinical
sites have been contracted and two of these sites have completed training. We
intend to continue these efforts during the third quarter, including the
training of the remaining clinical sites and the continued improvement of our
test components in an effort to transition our test into a commercial product.
Our system is intended to provide an accurate, non-invasive method for
screening genetic abnormalities by isolating fetal cells from a routine
maternal blood sample. Our established cytogenetics business will serve as a
base for penetration of the market since this new test is expected to be
utilized by the same prenatal screening customers."
    The foregoing contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act. Actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors including the
failure of the Company to successfully develop or commercialize its prenatal
screening system, lack of regulatory approval, and other such factors as set
forth in the Company's Form 10-K for the year ended December 31, 1996 as filed
with the Securities and Exchange Commission.
    Applied Imaging Corporation, based in Santa Clara, California, develops,
manufactures, and markets automated clinical analysis systems used by
laboratories for prenatal and other genetic diseases. The Company markets its
products worldwide and has more than 500 customer sites in over 30 countries.
    For further information on Applied Imaging via fax, dial 800-PRO-INFO, or
908-544-2850 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  Six months ended
                                                June 30,          June 30,
                                             1997     1996     1997     1996

    Revenues                                $3,169   $3,038   $6,891   $5,995
    Cost of revenues                         1,508    1,566    3,151    3,122
      Gross profit                           1,661    1,472    3,740    2,873
    Research and development                 1,668      801    3,252    1,698
    Sales and marketing                        874      751    1,706    1,476
    General and administrative               1,098      489    1,786      949
      Total cost and expenses                3,640    2,041    6,744    4,123
    Other income (expense), net                 87       (6)     168       15
      Net loss                             $(1,892)   $(575) $(2,836) $(1,235)
    Net loss per share                      $(0.26)      --   $(0.41)      --
    Pro forma net loss per share                --   ($0.10)      --   ($0.22)
    Weighted average shares outstanding      7,164    5,692    6,995    5,687

                    Condensed Consolidated Balance Sheets
                                (In thousands)

                                                    June 30,   Dec. 31,
                                                      1997      1996
                                                  (Unaudited)
    ASSETS
    Cash and marketable securities                  $11,739    $12,318
    Other current assets                              4,510      2,621
    Property and equipment, net                       1,682      1,234
    Other assets, net                                   280        300
      Total assets                                  $18,211    $16,473
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities                              $4,557     $4,239
    Other liabilities                                   309        229
    Stockholders' equity                             13,345     12,005
      Total liabilities and stockholders' equity    $18,211    $16,473

    For further information on Applied Imaging via fax, dial 800-PRO-INFO,
code AICX.

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