Coin Bill Validator, Inc. announces first quarter results.

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--Feb. 21, 1996--COIN BILL VALIDATOR, INC. (NASDAQ/NMS: CBVI), a public Company since February 6, 1995, formally a sub "S" Corporation, today announced the financial results for its First quarter ended December 31,1995.

Sales

Net sales increased by 9.8%, or $281,030, to $3,146,725 in the three months ended December 31, 1995 from $2,865,695 in the comparative prior year period. This increase is attributable to sales of the Company's new product line, the IDS bill validator, to international customers.

Gross Margin

Gross margin decreased to $1,261,915, or 40.1% of net sales, in the three months ended December 31,1995 from $1,328,868, or 46.4% of net sales, in the comparative prior year period. The decrease in gross margin as a percentage of sales was primarily the result of increased overhead costs associated with the Company's new facility, increased product costs, increased labor costs and other costs related to additional overhead, principally in manufacturing.

Operating Expenses

Operating expenses increased to $892,501, or 28.4% of net sales, in the three months ended December 31,1995 from $649,565, or 22.7% of net sales, in the comparative prior year period. This increase was due principally to costs associated with the Company's new facility, as well as increased staffing and related payroll costs to support expansion of engineering efforts and increased selling expenses to support marketing activities associated with the Company's growth strategy.

Net Income

Net income, as adjusted to reflect income taxes which would have been paid had the Company not been an "S" Corporation in the 1994 period, decreased to $218,880 in the three months ended December 31, 1995 from $396.277 in the comparative prior year period even though sales increased, due principally to increases in manufacturing costs and operating expenses as a percentage of sales.

Net income per share for the three months ended December 31,1995 was computed by dividing the Company's net income by the weighted average common shares outstanding during the three month period ended December 31,1995. The impact of outstanding stock options and warrants was not included in the calculation of net income per share, as such effect, if included, would have been antidilutive. Pro forma net income per share in the three month period ended December 31,1994, adjusted to reflect the pro forma effect of a "C" Corporation income tax provision for that period and the retroactive effect of a 1.639909 stock split, in the form of a stock dividend which resulted in pro forma weighted average common shares outstanding of 2,000,000, was $.20 per share.

COIN BILL VALIDATOR, INC. designs, manufactures and markets paper currency validators and related paper currency stackers for use in the United States and other countries. Validators process and authenticate paper currencies in a variety of automated machines, including gaming machines and vending machines which dispense products, services, coinage and other currencies. Stackers sold with most validators store validated paper currency, usually in removable cassettes.

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                      COIN BILL VALIDATOR, INC
                        STATEMENTS OF INCOME
                            (unaudited)

                   THREE  MONTHS  ENDED         PRO FORMA
                       DECEMBER 31,

                    1995           1994           1994

NET SALES        $3,146,725     $2,865,695     $2,865,695

INCOME FROM
  OPERATIONS    $   369,414    $   679,303     $  679,303

NET INCOME      $   218,880    $   652,962     $  396,277

NET INCOME PER
 SHARE          $       .08    $       .20

WEIGHTED AVERAGE
 COMMON SHARES
 OUTSTANDING      2,750,000      2,000,000
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CONTACT: HENRY KAYSER [phone]

LEONARDO ZANGANI [phone]