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AMERICAN FILM REPORTS SECOND QUARTER LOSS

 LOS ANGELES, Feb. 12 /PRNewswire/ -- As anticipated, American Film Technologies Inc. (NASDAQ: AFTI) today reported a loss for the second quarter ended Dec. 31, 1992.
 For the second quarter, revenues were $2,912,000, compared to $3,549,000 in the same period a year ago. A net loss of $1,371,000, or 13 cents per share, was recorded, as against net income of $305,000, or 3 cents per share, in the prior year's second quarter.
 For the first six months of fiscal 1993, revenues were $6,884,000, compared to $6,907,000 in the like period last year. A net loss of $1,198,000, or 11 cents per share, was sustained, compared to net income of $557,000, or 5 cents per share, in the first half a year ago.
 Arthur P. Hartel Jr., president and chief executive officer, commented: "In December, we projected a loss for the second quarter of from $700,000 to $1.2 million, based primarily on a range of estimated costs associated with the potential resolution of the employment contract with Joseph M. Taritero, the company's former chairman and chief executive officer, who resigned in November 1992. Mr. Taritero subsequently sued the company, and, while we believe that we will prevail in this litigation, we have increased the reserve to an amount we deem sufficient to cover the company's potential exposure in this matter."
 Hartel continued: "Two other factors contributed to the loss, as we discussed in our December announcement. During the quarter we completed coloring of 12 films, one less than the 13 completed in the second quarter of last fiscal year, which also included seven half- hour television episodes and five short cartoons. Finally, the cost of moving additional film coloring and animation functions from San Diego to Tijuana, Mexico, was higher than anticipated, and there were disruptions in our production schedules late in the quarter.
 "The company's joint venture with Tsuburaya Productions Co. Ltd. to establish an animation studio in Shanghai, China, has now been terminated. The company is pursuing other alternatives including expanding the amount of animation work that can be completed in the company's studio in Tijuana, Mexico.
 "Based on our current financial condition, the company will require additional capital to pursue its operating plans and to purchase capital equipment for its San Diego and Tijuana animation studios. We are actively pursuing new additional equity capital through a private placement of securities and we will continue our efforts to find a strategic investor."
 Hartel concluded: "We intend to continue to reduce our operating expenses in the coming months. The company continues to receive one or two pictures and special situation contracts for film coloring both from the United States and Europe. We are continuing our efforts to increase our film coloring work. The special animation projects are nearing completion and, based on their success, we anticipate receiving additional animation work. The company has recently begun to license a film camera motion control program and expects to license other aspects of our technology where appropriate."
 American Film Technologies Inc. is headquartered in Los Angeles with offices in Philadelphia and New York and with production facilities in San Diego and Tijuana. The company produces integrated digital animation and special effects for television and feature films. Breakthrough projects include the first animated short subject completed entirely on an all-digital computer system -- Gahan Wilson's "Diner," released by Fox Film Corp. Founded in 1985, AFTI is also the dominant supplier of film coloring services to the entertainment industry.
 AMERICAN FILM TECHNOLOGIES INC.
 Results of Operations
 (Unaudited)
 Three months ended
 Dec. 31,
 1992 1991
 Revenues $2,912,000 $3,549,000
 Net income (loss) ($1,371,000) $305,000
 Net income (loss) per share ($.13) $.03
 Weighted average shares
 outstanding 10,773,000 10,773,000
 Six months ended
 Dec. 31,
 1992 1991
 Revenues $6,884,000 $6,907,000
 Net income (loss) ($1,198,000) $557,000
 Net income (loss) per share ($.11) $.05
 Weighted average shares
 outstanding 10,773,000 10,773,000
 -0- 2/12/93
 /CONTACT: Arthur P. Hartel Jr., president and CEO of American Film Technologies, 215-688-1322/
 (AFTI)


CO: American Film Technologies Inc. ST: California IN: ENT SU: ERN

LS-MS -- LA022 -- 6356 02/12/93 18:23 EST
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Date:Feb 12, 1993
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