Bristol Retail Solutions Inc. Reports Record Third-Quarter Revenue of $9.4 Million.

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--Nov. 11, 1998--Bristol Retail Solutions Inc. (Nasdaq:BRTL) Wednesday announced that revenue for the third quarter ended Sept. 30, 1998, increased 32 percent to a record $9,423,000 from $7,121,000 for the third quarter of 1997.

The company reported a net loss of $339,000, or 6 cents per diluted share. This compares with a net loss of $196,000, or 4 cents per diluted share, for the same period a year earlier. After accounting for preferred stock dividends, the net loss applicable to common stockholders was $347,000, or 6 cents per diluted share, for the third quarter of 1998.

For the nine months ended Sept. 30, 1998, revenue increased 64 percent to $23,604,000 from $14,366,000 for the comparable period one year ago. The net loss was $788,000, or 14 cents per diluted share prior to the accounting for preferred stock accretion and dividends. This compares with a net loss of $1,404,000, or 28 cents per diluted share, for the same period last year.

Including preferred stock accretion and dividends, the net loss applicable to common stockholders was $1,281,000, or 22 cents per diluted share, for the first nine months of 1998.

"We were pleased with our revenue growth in the third quarter, and though we had a loss, we are continuing to make progress in the growth of our business as indicated by our backlog," said Richard Walker, president and chief executive officer. "In the company's third quarter, backlog at September 30, 1998, had increased 27 percent over the balance as of June 30, 1998."

"In addition, we were better able to control our operating costs as a percentage of net revenue. However, gross margins eroded because of our strategic shift to focus on internal growth as we introduced new, point-of-sale ("POS") products in regions where we had limited product offerings. This resulted in price discounting that had an impact on gross margins," Walker said.

"In the fourth quarter, we identified and implemented a more efficient operating structure designed to reduce costs and improve margins," Walker said.

Bristol Retail Solutions, with headquarters in Newport Beach, provides retail automation products and services through an expanding network of point-of-sale businesses.

In conjunction with the provisions of the new "Safe Harbor" section of the Private Securities Litigation Reform Act of 1995, this news release may contain forward-looking statements pertaining to future anticipated projected plans, performance and developments, as well as other statements relating to future operations. All such forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not materially differ from expectations. Further information on potential factors that could affect Bristol Retail Solutions Inc. are included in the company's 10KSB and 10QSB filed with the Securities and Exchange Commission.

                       BRISTOL RETAIL SOLUTIONS
                CONSOLIDATED STATEMENTS OF OPERATIONS
                             (unaudited)
             ($ in thousands, except for per share data)

                             Three months ended    Nine months ended
                                  Sept. 30,            Sept. 30,
                              1998        1997      1998        1997

Revenue
 Systems sales
  and installations         $ 6,384     $ 4,569   $15,291     $ 9,410
 Service and supplies sales   3,039       2,552     8,313       4,956
Total revenue                 9,423       7,121    23,604      14,366
Cost of revenue
 Systems sales
  and installation            4,430       2,819    10,129       6,099
 Service and supplies sales   2,334       1,743     5,963       3,521
Total cost of revenue         6,764       4,562    16,092       9,620
Gross margin                  2,659       2,559     7,512       4,746
Operating expenses
 Selling, general &
  administrative              2,694       2,574     7,551       5,972
 Software development costs     181         164       502         236
Total operating expenses      2,875       2,738     8,053       6,208
Operating loss                 (216)       (179)     (541)     (1,462)
Other income                    (23)        (16)      (93)       (124)
Interest expense                139          32       330          64
Loss before income taxes       (332)       (195)     (778)     (1,402)
Provision for income taxes        7           1        10           2
Net loss                    $  (339)    $  (196)  $  (788)   $ (1,404)
Preferred stock accretion
 and dividends:
Accretion related to
 Series A
 Convertible Preferred Stock     --          --      (242)         --
Imputed dividends for
 Series A
 Convertible Preferred Stock     --          --      (228)         --
Cumulative dividends for
 Series A
 Convertible Preferred Stock     (8)         --       (23)         --
Net loss available to
 common stockholders        $  (347)    $  (196)  $(1,281)   $ (1,404)
Basic and diluted net loss
 to common stockholders
 per share                  $ (0.06)    $ (0.04)  $ (0.22)   $  (0.28)
Basic and diluted weighted
 average common shares
 outstanding                  5,876       5,504     5,697       5,087


                 CONSOLIDATED CONDENSED BALANCE SHEET
                              (unaudited)
                           ($ in thousands)

                                          Sept. 30          Dec. 31,
                                            1998              1997

Assets
Current assets
 Cash and cash equivalents                $   445           $   716
 Accounts receivable - net                  7,079             3,203
 Inventories                                4,051             3,314
 Prepaid & other current assets               459               423
 Current portion of note receivable           150               144
Total current assets                       12,184             7,800
Property & equipment, net                     793               760
Intangibles, net                            4,640             4,161
Note receivable, noncurrent                   188               294
Other assets                                1,039               797
Total assets                              $18,844           $13,812

Liabilities and Stockholders' Equity
Current liabilities
 Short-term borrowings                    $ 4,148           $ 2,060
Accounts payable                            3,828             2,027
Accrued wages, salaries and
 related benefits                             948               776
Accrued expenses                              408               604
Deferred revenue                            1,929             1,596
Customer advances                             497               400
Current maturity of long-term debt             97                73
Total current liabilities                  11,855             7,536
Long-term debt and other                      188                82
Stockholders' equity                        6,801             6,194
Total liabilities and
 Stockholders' equity                     $18,844           $13,812