Avitar, Inc. Reports First Quarter Results for Fiscal Year 2001

Revenues increased 45% over 2000 first quarter

February 15, 2001

CANTON, Mass., Feb. 15 /PRNewswire/ -- Avitar, Inc. (Amex: - news) reported financial results for its first fiscal quarter ended December 31, 2000.

Revenues for the quarter increased approximately 45% to $1,169,336 compared to $ 807,664 for the first fiscal quarter of 2000. Net loss for the quarter ended December 31, 2000 was $1,610,517, or $0.06 per share before cumulative effect of accounting change. For the same period of the previous fiscal year, the net loss was $1,210,348, or $0.05 per share.

``We remain very optimistic about the drugs-of-abuse opportunity as our ORALscreen(TM) rapid test continues to penetrate the marketplace. Strategic alliances, which have formed both in the large U.S. market as well as the rapidly growing European market, will further broaden our ability to reach the corporate and criminal justice markets,'' said Peter P. Phildius, Avitar's Chairman and Chief Executive Officer.

Results for the three months ended December 31, 2000 reflect increased sales of the Company's ORALscreen(TM) product and drug-testing services, research and development expenses related to ORALscreen and investments in sales and marketing related to the substance abuse testing market.

Avitar, Inc. (Amex: - news) headquartered in Canton, Massachusetts, develops, manufactures and markets innovative medical devices based on core technologies in oral fluid diagnostics and customized polyurethane applications. The company markets a unique portfolio of substance abuse testing products and services that includes ORALscreen(TM), the world's first rapid point-of- collection oral fluid test for drugs of abuse, ORALadvantage(TM), the first comprehensive substance abuse program featuring Avitar's oral fluid-based products, HAIRscreen(TM), a laboratory-based test for detecting long term drug abuse using hair, and several other specialized tests for drugs of abuse. Additional products include an oral fluid collection system for DNA testing as well as a proprietary line of polyurethane-based high tech medical devices.

For more information, see Avitar's website at avitarinc.com.

This release contains forward looking statements that are subject to risks and uncertainties including the development and marketing of new applications and other risks that are detailed from time to time in the company's filings with the Securities and Exchange Commission.

                         - Financial chart follows -

                                 Avitar, Inc.
                         Summary of Financial Results
                   (in thousands, except per share amounts)

                                            For the Quarter Ended December 31,
                                                  2000             1999
    Sales                                        $1,169            $808

    Operating Expenses:
      Cost of Sales                                 884             625
      Selling, General and Administrative         1,380             992
      Research and Development                      435             326
      Amortization of Goodwill                       70              70

      Total Operating Expenses                    2,769           2,014

    Operating Loss                              (1,600)         (1,206)

    Other Expenses                                 (10)             (4)

    Net Loss                                   $(1,611)        $(1,210)

    Basic and Diluted Loss Per Share:
      Loss per Share Before Cumulative
       Accounting Change                        $(0.06)         $(0.05)
      Cumulative Effect of Accounting Change     (0.03)              --
      Net Loss per Share                        $(0.09)         $(0.05)

    Weighted Average Number of Shares and
     Common Equivalent Shares Outstanding    30,934,411      24,718,727