American Science and Engineering, Inc. Reports First Quarter Fiscal Year 2007 Results

The current quarter earnings per share were impacted by thefollowing: On April 1, 2006 the Company adopted SFAS 123(R)"Accounting for Stock-Based Compensation" and, as a result, thecompany recorded a pre-tax charge of $1,624,000 ($1,318,000 afterincome taxes, or $0.14 per share) in the first quarter fiscal year2007. In addition, the effective income tax rate, excluding the incomeeffect of the warrants, increased to 41.3% for the first quarterfiscal year 2007 as compared to 23.1% for the first quarter of theprior fiscal year. The increase in effective tax rate reduced netincome by $1,198,000, or $0.13 per share, in the first quarter fiscalyear 2007. This increase was primarily attributable to the Company'srecognition of tax carryforward benefits in fiscal year 2006 andpermanent differences for stock-compensation expense in fiscal year2007.

"We made excellent strides with customers in international sales,resulting in 58% of our current quarter bookings coming from thisarena. We booked twenty Z(R) Backscatter(TM) Vans frominternational clients in the quarter--a Company record for ZBVbookings overseas. These positive results were generated by ourincreased investment in international sales and marketing. Theexpansion of global sales channels is part of our plan to reducevariability or 'lumpiness' in quarter to quarter bookings, which istypical of our industry."

Fabiano continued, "We booked our third order for the OmniView(TM)Gantry system, and we are optimistic about the potential for thisunique multi-technology cargo inspection product for bothinternational and domestic markets. Also, we began taking orders forour new Gemini(TM) parcel inspection system, which effectively screensbaggage for both organic and metallic threats. As a result of thisactivity, we ended the quarter with a backlog of $63 million, up 21%for the same period last year."

As previously announced, Anthony Fabiano, President and CEO, andKen Galaznik, CFO and Treasurer, will host the conference callWednesday, August 9, 2006 at 11:00 a.m. ET to discuss the results andrespond to questions. To participate in the conference call, pleasedial 800-638-4930 at least 10 minutes prior to its starting time. Forinternational participants, dial 617-614-3944. Please tell theOperator the confirmation code: 22336052. You will be placed on holduntil the conference call is ready to begin.

An audio replay of the teleconference will be available, in itsentirety, starting Wednesday, August 9, 2006 at 1:00 p.m. EST for a48-hour period by dialing 888-286-8010. Internationally, please dial617-801-6888. The conference identification number is 50562257. Thereplay will also be available at www.as-e.com in the InvestorInformation section following the conference.

QUESTIONS? If you have prepared questions, please submit themprior to the conference call via e-mail to asadowski@as-e.com or viafax to Annemarie Sadowski, at 1-978-262-8801.

About AS&E(R)

American Science and Engineering, Inc. (AS&E) is the leadingworldwide supplier of innovative X-ray inspection and screeningsystems. With more than 45 years of experience in developing advancedX-ray security systems, the Company's product line utilizes a varietyof technologies, including patented Z(R) Backscatter(TM), ShapedEnergy(TM) and Radioactive Threat Detection (RTD). These technologiesoffer superior detection of threats including plastic explosives,plastic weapons, illegal drugs, other contraband, dirty bombs andnuclear devices. AS&E offers a complete range of X-ray inspectionproducts including Z(R) Backscatter screening systems,CargoSearch(TM), and ParcelSearch(TM) inspection systems, used forcritical detection and security applications to combat terrorism, drugand weapon smuggling, trade fraud, and illegal immigration. AS&Ecustomers include leading governmental agencies, border authorities,military bases, airports and corporations worldwide, including theU.S. Department of Homeland Security, U.S. Department of Defense, U.S.Customs and Border Protection, Royal Thai Police, HM Customs & Excise(U.K.) and Hong Kong Customs. For more information on AS&E productsand technologies, please visit www.as-e.com.

Safe Harbor Statement

The foregoing press release contains statements concerning AS&E'sfinancial performance, markets and business operations that may beconsidered "forward-looking" under applicable securities laws. AS&Ewishes to caution readers of this press release that actual resultsmight differ materially from those projected in any forward-lookingstatements. Factors which might cause actual results to differmaterially from those projected in the forward-looking statementscontained herein include the following: significant reductions ordelays in procurements of the Company's systems by the United Statesand other governments; disruption in the supply of any sourcecomponent incorporated into AS&E's products and other factors whichmay cause delays in production and delivery schedules; litigationseeking to restrict the use of intellectual property used by theCompany; potential product liability claims against the Company;failure of any of our products to meet performance requirements or tocontinue to operate reliably because of unexpected design flaws ormanufacturing defects, global political trends and events which affectpublic perception of the threat presented by drugs, explosives andother contraband; global economic developments and the ability ofgovernments and private organizations to fund purchases of theCompany's products to address such threats; and the potentialinsufficiency of Company resources, including human resources,capital, plant and equipment and management systems, to accommodateany future growth, and future delays in federal funding. These andcertain other factors which might cause actual results to differmaterially from those projected are detailed from time to time inAS&E's periodic reports and registration statements filed with theSecurities and Exchange Commission, which important factors areincorporated herein by reference. AS&E undertakes no obligation toupdate forward looking statements to reflect changed assumptions, theoccurrence of unanticipated events, or changes in future operatingresults, financial condition or business over time.

AMERICAN SCIENCE AND ENGINEERING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

For the Quarter Ended
June 30, June 30,
2006 2005

Total net sales and contract revenues $ 29,882 $ 35,162

Total cost of sales and contracts 16,385 20,570
--------- --------
Gross profit 13,497 14,592

Expenses:
Selling, general and administrative 5,695 4,138
Research and development 2,249 2,422
--------- --------
Total expenses 7,944 6,560
--------- --------

Operating income 5,553 8,032
--------- --------
Other income (expense):
Interest and investment income 1,116 361
Interest expense (99) --
Other, net 13 14
Change in warrant valuation 2,132 533
--------- --------
Total other income (expense) 3,162 908
--------- --------


Income before provision for income taxes 8,715 8,940
Provision for income taxes 2,720 1,943
--------- --------
Net income $ 5,995 $ 6,997
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Income per share - Basic $ 0.66 $ 0.84
Income per share - Diluted $ 0.41 $ 0.78

Weighted average shares - Basic 9,073 8,376
Weighted average shares - Diluted 9,372 8,984


The results of operations reported herein may not be indicative of
future financial conditions or results of future operations.


AMERICAN SCIENCE AND ENGINEERING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)

June 30, March 31,
2006 2006
Assets
Current assets:
Cash and investments $ 105,362 $ 93,870
Accounts receivable, net 30,807 25,868
Inventories 17,476 16,886
Other current assets 10,758 17,300
--------- ---------
Total current assets 164,403 153,924

Non-current assets:
Building, equipment and leasehold improvements, net 19,835 18,717
Other assets 1,775 748
--------- ---------
Total assets $ 186,013 $ 173,389
========= =========
Liabilities & Stockholders' Equity
Current liabilities:
Accounts payable $ 3,717 $ 6,659
Warrant liability 772 --
Customer deposits 14,363 6,103
Other current liabilities 14,329 16,131
--------- ---------
Total current liabilities 33,181 28,893

Non-current liabilities:
Lease financing liability 9,435 9,630
Warrant liability -- 4,038
Other non-current liabilities 2,772 630
--------- ---------
Total liabilities 45,388 43,191

Total stockholders' equity 140,625 130,198
--------- ---------
Total liabilities and stockholders' equity $ 186,013 $ 173,389
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