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COMMUNICATIONS SYSTEMS REPORTS SECOND QUARTER EARNINGS

 HECTOR, Minn., July 28 /PRNewswire/ -- Communications Systems, Inc. (NASDAQ-NMS: CSII) (CSI) today reported net income of $1,970,000 or $.22 per share for the second quarter of 1993, an increase of 54 percent from $1,280,000 or $.14 per share in the year-earlier period. Second quarter revenues rose 3 percent to $14,927,000.
 For the first six months of 1993, net income totaled $3,186,000 or $.36 per share, up 28 percent from $2,485,000 or $.28 per share last year before a one-time tax benefit related to the mandated adoption of a new income tax accounting method. After a tax benefit of $481,000 or $.05 per share, net income for the first half of 1992 came to $2,966,000 or $.33 per share.
 Curtis A. Sampson, CSI's president and chief executive officer, said the strongly higher second quarter earnings reflected another solid performance by Suttle Apparatus, the company's domestic telephone apparatus business.
 He said Suttle's improved sales and profitability resulted from further gains in market share among its primary customers, the seven Regional Bell Operating Companies and GTE. Domestic apparatus sales also benefited from initial shipments on a $6.3 million telecommunications order received earlier in the year. Shipments on this order, the largest in the company's history, will continue over the next few quarters.
 The increased profitability of the domestic apparatus business continued to benefit from strengthened efficiencies related to several plant consolidations. In addition, a higher proportion of Suttle's pre- tax income was realized on shipments from its facility Puerto Rico, where corporate income is taxed at reduced rates.
 Austin Taylor Communications, Ltd. in Wales -- the company's international apparatus unit -- and Zercom Corporation -- the contract manufacturing subsidiary -- reported lower second quarter sales. However, both businesses remained solidly profitable.
 Austin Taylor continues to feel the impact of the weak European economy, but several significant new orders, including one from British Telecom, should strengthen the unit's second half performance. Zercom's sales and income are also expected to benefit from continued success at expanding its customer base.
 Sampson said CSI remains on track toward reporting record sales and earnings for the full year. At the end of this year's second quarter, the company's total order backlog stood at $14.8 million, which will largely ship in this year's second half.
 CSI is a leading manufacturer of modular connecting and premise wiring devices for the voice and data communications markets. The company's common stock is traded on the National Market System under the NASDAQ symbol CSII.
 COMMUNICATIONS SYSTEMS, INC.
 CONSOLIDATED SUMMARY OF EARNINGS
 Three months ended Percent
 6/30/93 6/30/92 Increase
 (Decrease)
 Revenues $14,927,127 $14,489,946 3
 Gross margin 4,737,484 4,137,812 14
 Operating income 2,128,167 1,572,935 35
 Income before income taxes 2,269,643 1,630,356 39
 Income taxes 300,000 350,000 (14)
 Net income $1,969,643 $1,280,356 54
 Net income per share $.22 $.14 57
 Average shares outstanding 8,985,000 8,877,000 --
 Six months ended Percent
 6/30/93 6/30/92 Increase
 (Decrease)
 Revenues $27,621,397 $28,022,127 (1)
 Gross margin 8,291,106 8,134,151 2
 Operating income 3,453,890 3,124,596 11
 Income before income taxes 3,725,595 3,284,656 13
 Income taxes 540,000 800,000 (33)
 Income before change in
 accounting principle 3,185,595 2,484,656 28
 Cumulative effect of change in
 accounting principle -- 481,000 --
 Net income $3,185,595 $2,965,656 7
 Net income per share:
 Before cumulative effect of
 change in accounting principle $.36 $.28 29
 Cumulative effect of change in
 accounting principle -- .05 --
 Net income per share $.36 $.33 8
 Average shares outstanding 8,964,000 8,881,000 --
 -0- 7/28/93
 /CONTACT: Curtis A. Sampson, president & chief executive officer, Paul N. Hanson, vice president-finance, or Avis J. Johnson, director of shareholder relations, 612-848-6231, all of CSI/
 (CSII)


CO: Communications Systems, Inc. ST: Minnesota IN: TLS SU: ERN

DB -- MN006 -- 6687 07/28/93 10:02 EDT
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Publication:PR Newswire
Date:Jul 28, 1993
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