Aqua Care Systems announces second quarter profit; revenues increased 14.7 percent.

HOLLYWOOD, Fla.--(BUSINESS WIRE)--July 15, 1996--Driven by strong revenue from subsidiary EnviroSystems Supply Inc., Aqua Care Systems Inc. (Nasdaq:AQCR) Monday announced significant increases in both earnings and revenue for the second quarter ended June 30, 1996.

Revenues for the second quarter 1996 reached $4.3 million, an increase of 14.7% from $3.7 million a year ago. Net income for the quarter increased to $68,402, or $.01 per share, from a net loss of $(568,406), or $(.12) per share for the prior year's second quarter. It should be noted that the number of outstanding shares of common stock increased to 8.3 million from 4.9 million a year ago.

For the six-month period ended June 30, 1996, revenues aggregated $8.2 million, up 9.3% from $7.5 million last year. Net income rose to $22,198, or $.00 per share, an increase of $897,041 from a net loss of $(874,852), or $(.19) per share for the same period a year ago.

William K. Mackey, chairman and chief executive officer, said, "This quarter's greatly improved results can be directly attributed to the restructuring steps we put in place a year ago."

Mackey stated that through restructuring, Aqua Care Systems redefined its commitment to build, manufacture, and maintain municipal, industrial, and residential water filtration and purification systems. He also noted that operating expenses for the quarter were decreased 27% to $1.4 million due to reduced overhead.

Mackey continued: "Water purification and filtration represents a $30 billion global business. Now that we are refocused to take advantage of this marketplace, I believe Aqua Care is set to demonstrate very favorable results for the remainder of this fiscal year and beyond. Currently our stock price reflects neither the potential of this market nor our book value or revenues."

Aqua Care Systems Inc., based in Hollywood, is a manufacturer and supplier of municipal, industrial, and residential water filtration and purification systems. Aqua Care System's subsidiaries include EnviroSystems Supply Inc., Pure Flow Water Co. Inc., Gravity Flow Systems Inc., Car Wash Equipment & Supply Inc., KISS International Inc., Midwest Water Technologies Inc., and Di-tech Systems Inc. -0-

AQUA CARE SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the three and six months ended June 30, 1996 and 1995
(amounts in thousands, except share and per share data)
(Unaudited)

                               For the              For the
                          three months ended    six months ended
                               June 30,              June 30,
                            1996      1995        1996      1995
REVENUES                  $4,320    $3,765      $8,175    $7,480
COST OF REVENUES           3,036     2,409       5,647     4,812

GROSS PROFIT               1,284     1,356       2,528     2,568
OPERATING EXPENSES         1,375     1,880       2,818     3,537

LOSS FROM OPERATIONS         (91)     (524)       (290)     (869)
OTHER INCOME/
 (EXPENSES), net             159       (44)        312        (6)

NET INCOME/(LOSS)            $68     ($568)        $22     ($875)

Net income/(loss)
 per common share          $0.01    ($0.12)      $0.00    ($0.19)

Weighted average number
 of outstanding shares
 of common stock       8,280,652  4,919,005  8,268,444  4,513,715

CONDENSED CONSOLIDATED BALANCE SHEET DATA
As of June 30, 1996 and 1995
(amounts in thousands)
(Unaudited)

                            June 30,    June 30,
                               1996        1995

CASH AND CASH EQUIVALENTS      $439        $411
WORKING CAPITAL              $3,007      $1,895
TOTAL ASSETS                $11,123     $12,515
LONG-TERM DEBT,
 net of current
 maturities                    $873        $612
STOCKHOLDERS' EQUITY         $8,078      $8,658

CONTACT: Aqua Care Systems Inc., Hollywood

William K. Mackey, Chairman, C.E.O., 954/925-9993