Arthurs-Jones Inc. - Annual Results.

TORONTO--(BUSINESS WIRE)--July 4, 1997--(TSE AJ.) Arthurs-Jones Inc. of Toronto today reported sales for the 12 months ended April 30, 1997 of $62,830,000, an increase of 32 percent over sales of $47,628,000 in fiscal 1996. Net income of $2,127,000 for the 12 months ended April 30, 1997 was an increase of 5.8 percent from net income of $2,010,000 in fiscal 1996. On a per share basis, earnings for fiscal 1997 were $0.42 per share compared to the $0.56 per share in fiscal 1996. On a per share comparative basis year over year, the number of shares used in calculating earnings per share increased from 3,608,423 shares outstanding last year to 5,079,161 shares outstanding in fiscal 1997. EBITDA was $9,002,116 in fiscal 1997, 39.5 percent above fiscal 1996's EBITDA of $6,452,306. In fiscal 1997, both interest expense and income tax provisions were significantly higher.

Arthurs-Jones produces specialized printing and packaging products for many of North America's major corporations through its three operating divisions: high quality labels and specialty pressure sensitive material at Jonergin in Montreal; specialty packaging through 65 percent owned Jay Packaging Group, Inc. of Warwick, Rhode Island and a convertible debenture investment in Primary Packaging Inc. of Maspeth, New York; and sheetfed printing in Mississauga. Arthurs-Jones also owns 20 percent of Digital Renaissance Inc., a New Media Engineering(TM) firm that has been designing and developing interactive communication solutions since 1990.

The fiscal 1997 results reflect a full year of sales and earnings from Jonergin which became a wholly-owned subsidiary of Arthurs-Jones as of April 30, 1996. Jonergin's results continued to exceed expectations in fiscal 1997.

Arthurs-Jones' year-end results reflect only four months of operations of Jay Packaging, a 65 percent interest in which was acquired in January 1997. With sales of $15,895,933 and net income of $940,000 for the four month period, Jay Packaging's results were well ahead of expectations. Arthurs-Jones' results for fiscal 1998 will reflect a full year of results from Jay Packaging.

The financial performance of Arthurs-Jones' sheetfed printing division in Mississauga (which now represents approximately 25 percent of Arthurs-Jones' sales on a consolidated basis) fell below expectations, primarily due to the highly competitive nature of the sheetfed printing business in southwestern Ontario. To address this environment and to be able to continue to compete successfully in it, the Company is continually exploring areas for cost reductions and instituted a number of organizational changes in fiscal 1997. Arthurs-Jones expects its sheetfed operations to return to profitability in the current fiscal year.

Arthurs-Jones also holds a 20 percent interest in Digital Renaissance which was purchased in August 1996 for $1 million. Digital Renaissance continues to achieve record growth in sales and profit.

Leland Verner, Arthurs-Jones' Chairman and Chief Executive Officer, said, "The company has undergone dramatic changes in the past year, primarily by its entry into the U-S- specialty packaging market through the acquisition of 65 percent of Jay Packaging and a convertible debenture investment in Primary Packaging. The contribution of Jay Packaging and the expected continuation of profitability from Jonergin are very encouraging and should lead the company to sales in excess of $100 million for fiscal 1998. The completion of organizational changes and a continuing effort to reduce costs in the sheetfed division should improve performance for the upcoming year. Arthurs-Jones Inc., now derives more than 60 percent of its revenues from the United States and this percentage will continue to grow. We are now focusing our efforts on expansion opportunities in the specialty label and packaging markets. I expect this strategy will produce significant improvement in the stability of our earnings."

Arthurs-Jones also announced that its annual meeting of shareholders will take place on September 18, 1997. The record date for determining shareholders entitled to vote at the meeting will be August 8, 1997.

                        Arthurs-Jones Inc.
               (in thousands of Canadian dollars)

                                   Year ended  Year ended
                               April 30, 1997 April 30, 1996
                               -----------------------------
Sales                                 $62,830     $47,628
Cost of sales                          46,797      35,074
                               -----------------------------
Gross Margin                           16,034      12,553
Selling and administration             10,480       7,690
                               -----------------------------
Operating profit                        5,902       4,863
Interest                                1,161         767
                               -----------------------------
Earnings before taxes                   4,741       4,096
Taxes                                   2,029       1,331
                               -----------------------------
Net earnings                            2,712       2,765
Minority interest                         586         755
                               -----------------------------
Net earnings                          $ 2,127     $ 2,010
                               -----------------------------
                               -----------------------------
EBITDA                                $ 9,002     $ 6,452
                               -----------------------------
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CONTACT: Arthurs-Jones Inc.

Leland D. Verner, 416/ 934-9501