ThermoGenesis Corp. Reports Third Quarter Results; Focus On Enhanced Profit Margins Results in 35% Improvement for Nine Month Reporting Period

Business Wire, May 13, 1999

RANCHO CORDOVA, Calif.--(BUSINESS WIRE)--May 13, 1999--

THERMOGENESIS CORP. (Nasdaq:KOOL) today announced that revenues for the nine months ended March 31, 1999 totalled $3,290,287, a 28.7% increase over revenues of $2,556,065 reported for the nine months ended March 31, 1998. Net loss, before recognizing a preferred stock discount of $,3,604,740, decreased 30% to $5,284,929, for the current nine month reporting period from a net loss of $7,563,917, posted in the comparable reporting period in 1998. Net loss attributed to common stockholders with the preferred stock discount applied was $8,889,669, or $.47 loss per share, as reported for the nine month reporting period in 1999.

For the three months ended March 31, 1999, revenue slightly decreased to $866,094 compared to revenue of $1,028,973 posted in the comparable three month period in the prior year. Net loss for the current reporting period, before recognizing a preferred stock discount of $1,307,700, was $1,928,131, which represents a 9% reduction in losses from $2,119,796, reported for the three month reporting period ended March 31, 1998. After factoring in the preferred stock discount, net losses attributable to the common stockholders of the Company totalled $3,235,831, or $.17 loss per share, in the current reporting period.

Dr. James H. Godsey, President and Chief Operating Officer of ThermoGenesis Corp. stated, "When we began fiscal 1999, it was with the primary financial objectives of increasing global sales of the Company's Bio-Archive and CryoSeal product lines, enhancing our gross profit margins, and greatly diminishing our corporate overhead. I am pleased to report that we are successfully achieving all of our stated goals and are approaching the day when we will attain ultimate profitability. To illustrate, sales of the Bio-Archive product line made during the current nine month reporting period tripled over sales made during the same timeframe in 1998 - indicating progress being made in our sales and marketing efforts. It is noteworthy to point out that despite our aggressive sales and marketing push, we were successful in significantly reducing our selling and marketing expenses15% and 29% for the third quarter and nine month period, respectively."

Continuing, Godsey added, "In anticipation of upcoming product launches and the costs associated with building and maintaining an infrastructure that is required to meet FDA regulatory requirements and standards for production of Class II medical devices, we experienced higher cost of sales than we initially expected. Nonetheless, our on-going commitment to reducing costs resulted in improved gross margins. Specifically, we achieved cost of sales as a percent of sales of 119% and 110% for the three month and nine months ended March 31, 1999, as compared to 120% and 145% for the corresponding fiscal 1998 periods. Consequently, gross losses were dramatically reduced 72% to nearly $300,000 for the current nine month period from gross losses of approximately $1.2 million posted in the prior year nine month period."

"Realizing that we are standing at the gateway to another dimension of accomplishment for the Company, the entire THERMOGENESIS team couldn't be more enthused about what the future holds. Years of research and development of our quality products and our relentless pursuit to bring them to market is finally paying off. As we move into the final quarter of our fiscal year, we will be implementing our final corporate strategies to firmly position the Company on track to reach profitability in fiscal 2000. As we amass broad market awareness and regulatory approvals for expanded applications of our product line, revenues will increase and earnings will come. That is and shall remain our commitment to our stockholders."

ThermoGenesis Corp. has been a pioneer in designing, manufacturing and distributing equipment to collect, freeze and manage highly sensitive blood products and biological tissues for more than 10 years.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements which are not historical facts contained in this press release are forward-looking statements that involve certain risks and uncertainties including, but not limited to, risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, delays in testing and evaluation of products, government approval processes, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed in the Company's filings with the Securities and Exchange Commission. -0-

                         THERMOGENESIS CORP.
                       CONDENSED BALANCE SHEET
                             (Unaudited)

                                                March 31      June 30
                                                  1999          1998
ASSETS:

Current assets:
  Cash and cash equivalents                   $3,257,280    $1,975,042
  Accounts receivable                            947,816     1,280,327
  Inventory                                    2,500,393     2,456,565
  Other current assets                           173,417       180,214

        TOTAL CURRENT ASSETS                   6,878,906     5,892,148

Equipment, net                                 1,395,458     1,679,201

Prepaid royalties, net                            69,274       110,863


Other assets                                     165,366       117,030

                                              $8,509,004    $7,799,242

LIABILITIES & SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                            $  971,371    $1,301,141
    Other current liabilities                    816,246       867,690

        TOTAL CURRENT LIABILITIES              1,787,617     2,168,831

Long-term portion of
 capital lease obligations                        37,996        57,519
Redeemable convertible preferred stock         6,188,929          --

Shareholder's Equity                             494,462     5,572,892

                                              $8,509,004    $7,799,242


                         THERMOGENESIS CORP.
                       STATEMENT OF OPERATIONS
                             (Unaudited)

                       Three Months Ended         Nine Months Ended
                           March 31                   March 31
                        1999       1998          1999          1998


Net sales          $   866,094 $ 1,028,973  $ 3,290,287   $ 2,556,065

Cost of sales        1,031,056   1,231,468    3,619,293     3,713,100

Gross
 profit (loss)        (164,962)   (202,495)    (329,006)   (1,157,035)

Expenses:
 General and
  administrative       794,197     510,282    2,171,026     1,613,234
 Selling and
  marketing            470,480     550,303    1,217,117     1,706,936
 Research and
  development          498,418     837,690    1,465,915     3,040,232
 Interest and
  other expenses        31,159      30,956      153,656        99,098

 Total Expenses      1,794,254   1,929,231    5,007,714     6,459,500

 Interest income        31,085      11,930       51,791        52,618

 Net loss          ($1,928,131)($2,119,796) ($5,284,929)  ($7,563,917)

Per share data:
 Net loss          ($1,928,131)($2,119,796) ($5,284,929)  ($7,563,917)
 Preferred stock
  discount           1,307,700        --      3,604,740          --
 Net loss to
  common
  stockholders     ($3,235,831)($2,119,796) ($8,889,669)  ($7,563,917)

 Basic and
  diluted net loss
  per share        ($     0.17)($     0.11) ($     0.47)  ($     0.44)