As previously disclosed, Joseph A. Largey resigned his positions as Chief Executive Officer and as a director of the Company on September 27, 2004. A one-time charge of approximately $325,000 associated with his employment termination is reflected in the third quarter results.

SRI continues to experience pricing and competitive pressures, principally because of competitors offering disposable alternatives to its reusable products. However, SRI is realizing overall revenue growth from 2003 as it benefits from the growth of its instrument processing programs and efforts to strengthen and build its customer relationships and upgrade its staff, facilities, and internal processes.

SRI/Surgical Express, Inc. provides hospitals with a daily delivery and retrieval service that furnishes reusable and disposable products and devices used in surgical procedures. The Company serves hospital customers in 20 states from 10 reprocessing facilities, one disposable products facility, and 4 distribution centers located throughout the United States.

The statements in this press release that are not historical, including statements regarding SRI's beliefs, expectations, and strategies, constitute "forward looking statements" within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Important factors that could cause the differences are discussed in SRI's reports on Forms 10-Q, 10-K, and 8-K that the Company periodically files with the Securities and Exchange Commission. These factors include SRI's sales process and market acceptance of its products and services, SRI's capital needs, its dependence on significant customers and a significant supplier, risks of a new product offering, and the competitive healthcare marketplace.