Escalon(R) Reports Third Quarter Fiscal 20...(ase of 12% inproduct revenue realizing i...)

"In our Medical/Trek business unit, product revenue decreased $18,000, or 5%, to $327,000 during the third quarter 2008 as compared with the same period last fiscal year. This is primarily attributed to a decrease in the sale of Trek's mature product line of Ispan Intraocular gases and fiber optic sources. However, in our EMI business unit product revenue increased $76,000, or 32%, to $313,000, due to increased sales of EMI's digital imaging systems, resulting from the continuing expansion of sales efforts and product offerings."

Mr. DePiano did highlight areas of concern noting, "the development of Drew's proposed new diabetes instrument has been significantly delayed due to difficulties related to the final phase of the instrument's development. Drew, in consultation with independent consultants, is in the process of evaluating the development of the instrument. Until the evaluation is completed Drew will not be able to estimate the timing of a 510(k) application submission for the instrument to the FDA or whether a submission will be made."

"In addition, Drew had anticipated that the joint development project that it had undertaken with Point Care Technologies, Inc. of Drew's 2280 HT HIV instrument would also be completed during the fiscal year ending June 30, 2008. Due to a dispute with Point Care, Drew is unable at this time to estimate when or if the 2280 HT HIV instrument will be completed."

Finally, Mr. DePiano noted that, "Drew is experiencing material margin compression on two of its instruments relating to unfavorable exchange rate fluctuations between the Euro and the United States dollar. Therefore, if th
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