Alpha Technologies Group, Inc. reports first quarter fiscal 1997 results.

NEW YORK--(BUSINESS WIRE)--Feb. 26, 1997--Alpha Technologies Group, Inc. (Nasdaq:ATGI) today reported results for the first quarter ended January 26, 1997.

The net loss for the first quarter was $1,652,000, or $0.25 per share, compared to net income of $133,000, or $0.02 per share, reported in the prior year's first quarter. The loss included charges for restructuring of $214,000, or $0.03 per share, additional inventory reserves of $588,000, or $0.09 per share, and operating losses of $850,000, or $0.13 per share, which resulted primarily from a change in the mix of connector products sold and lower sales of thermal management products.

Sales for the quarter were $17.9 million, an increase of 5% from the $17.0 million reported in the same period last year. Thermal management revenues in the quarter were $13.2 million compared to $12.3 million reported in the prior year quarter. The increase in thermal management revenues was attributable to sales by Lockhart, which the Company acquired in August 1996. Without the effects of Lockhart, other thermal management revenue decreased by 6%. Connector revenues were $4.7 million in both the first quarter of fiscal 1997 and fiscal 1996.

Lawrence Butler, President and Chief Executive Officer of Alpha, commented, "Our first quarter results were disappointing, however we continue to make efforts to reposition our Company for future profitable results. We have restructured our connector business by eliminating a level of management in the manufacturing area and reducing other expenses which in aggregate will save $500,000 annually. Additionally, we are improving our connector sales and marketing efforts by adding product marketing managers, upgrading our sales representative network and adding distributors. In our thermal management business, we are targeting our sales and marketing efforts on markets which require highly-engineered, value-added solutions and are aggressively pursuing cost reduction programs and manufacturing efficiency opportunities."

Alpha, through its wholly-owned subsidiaries, Wakefield Engineering, Inc. and Uni-Star Industries, Inc., designs, manufactures and sells thermal management products and connectors. The Company's thermal management products, principally heat sinks, which dissipate heat generated by electronic components, serve the microprocessor, computer, consumer electronics, transportation, power supply, aerospace and defense industries. The Company's sub-miniature, micro- miniature and ultra-miniature connector products and its backplane/midplane-type assemblies, the majority of which are custom manufactured to meet rigid specifications, serve the aerospace, automotive, communications, defense, factory automation, industrial controls, medical electronics, scientific/process instrumentation and test/measurement industries.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995:

This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, availability of raw materials, the telecommunications regulatory environment, fluctuations in operating results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. -0-

FINANCIAL HIGHLIGHTS
QUARTER ENDED
(Unaudited)

                                           January 26, January 28,
                                              1997        1996
Revenues:
     Thermal management                    $13,212,000 $12,331,000
     Connectors                              4,709,000   4,732,000
     Total                                  17,921,000  17,063,000

Gross profit                                 2,541,000   3,745,000
Operating expenses                           3,940,000   3,399,000
Interest and other income (expense), net      (253,000)   (213,000)
Provision for income taxes                         ---     (59,000)
Minority interest in consolidated subsidiary       ---      59,000
Net income (loss)                           (1,652,000)    133,000

Net income (loss) per share
     Continuing operations before taxes less
          Minority interest                    $(0.25)       $0.03
     Provision for income taxes                   ---        (0.01)
     Minority interest                            ---         0.01
     Net income (loss)                          (0.25)        0.02

Shares used in computing net
  income per share                          6,675,000    6,726,000


SELECTED BALANCE SHEET DATA

                                           January 26, October 27,
                                              1997        1996
                                           (Unaudited) (Unaudited)

Cash                                        $3,131,000  $3,935,000
Working capital                              6,092,000   6,460,000
Debt (including current maturities)         14,244,000  13,909,000
Total assets                                44,428,000  47,060,000
Stockholders' equity                        20,480,000  22,117,000

CONTACT: Alpha Technologies Group, Inc.

Johnny J. Blanchard

Chief Financial Officer

281/647-9689

or

Morgen-Walke Associates, Inc.

Investor Contact: Donna Stein, Dan Durkin

212/850-5600

Press Contact: Lee Foley

212/850-5613