EXHIBIT 99.1

Prab, Inc. Announces Merger Proposal from Inter-Source Acquisition, Inc.
           Formation of Special Committee and Retention of
             Investment Banking Firm and Special Counsel


    KALAMAZOO, Mich.--(BUSINESS WIRE)--Aug. 22, 2003--PRAB, INC.
("Prab") (OTCBB:PRAB), which operates under two divisions, Prab
Conveyors and Hapman Conveyors, is a leading provider in the design
and manufacture of conveyors, metal scrap reclamation systems, and
bulk material handling equipment and systems for a wide variety of
industrial markets throughout the world, announced today that it has
received a merger proposal from Inter-Source Acquisition, Inc. The
proposal, dated August 18, 2003, included in its terms a provision
that the shareholders of Prab would be offered a price of $2.25 per
share.
    Prab's Board of Directors has formed a special committee of
independent directors (the "Special Committee") for the purpose of
evaluating strategic alternatives and any offers Prab may receive.
Prab has received two (2) previous merger proposals, including a
proposal from a company formed by Prab's CEO and President, Gary A.
Herder. Prab previously announced these proposals through Form 8-K
filings with the Securities and Exchange Commission and press
releases.
    Prab also announced today that the Special Committee has retained
the investment banking firm Lincoln Partners LLC of Chicago, Illinois
to assist the Special Committee in considering strategic alternatives,
including a possible sale of Prab. The Special Committee has also
retained Varnum, Riddering, Schmidt & Howlett LLP to serve as
independent legal counsel to the Special Committee.
    The Special Committee expects that it may in the future receive
additional proposals to acquire Prab. The Special Committee intends to
proceed with an orderly process of reviewing all current proposals and
any additional proposals that it receives, in an effort to maximize
shareholder value. This process will involve obtaining confidentiality
agreements, distributing due diligence information, potential visits
to Prab's facilities and receipt of final proposals from interested
parties. The Special Committee expects that the bidding process will
be completed by early October 2003. Once the bidding process is
completed and if a proposal acceptable to the Special Committee is
received, a definitive merger agreement will need to be negotiated
with the successful bidder followed by full Board approval and a
special meeting of Prab's shareholders to approve the transaction.
Information about any proposed transaction will be provided to Prab's
shareholders by means of a proxy statement in advance of the
shareholder meeting. There can be no assurance, however, that any
transaction will occur, and, if any transaction occurs, what the
structure or terms of such transaction will be.
    "Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release regarding Prab's
business which are not historical facts are "forward-looking
statements" that involve risks and uncertainties, including the risk
that Prab may be unable to successfully complete a strategic
transaction on terms acceptable to Prab or at all. For a discussion of
additional risks and uncertainties, which could cause actual results
to differ from those contained in the forward-looking statements, see
other risk factors detailed from time to time in Prab's periodic
reports filed with the Securities and Exchange Commission, and its
other filings under the Securities Exchange Act of 1934 Act, as
amended. Any forward-looking statements are made pursuant to the
Private Securities Litigation Reform Act of 1995 and, as such, speak
only as of the date made. Prab is not undertaking to update any
information in the foregoing reports until the effective date of its
future reports required by applicable securities laws.

    CONTACT: Prab, Inc.
             Robert W. Klinge, 269-382-8200