Computational Systems, Incorporated reports record second quarter results and management addition; net income up 60% for second quarter; John Cioffi retires as President.

KNOXVILLE, Tenn.--(BUSINESS WIRE)--July 15, 1996--Computational Systems, Incorporated (Nasdaq/NM:CSIN) today reported record sales, net income and net income per share for the second quarter and six-month period ended June 30, 1996.

For the second quarter, net sales rose 16% to $11,209,000 compared with $9,679,000 in the year-earlier period. Net income rose 60% to $950,000 or $0.19 per share compared with net income of $593,000, or $0.17 per share, a year ago based upon a weighted average number of shares outstanding of 5,068,388 for the second quarter of 1996 and 3,539,886 for the second quarter of 1995.

Commenting on the results, Chairman and Chief Executive Officer Ronald G. Canada said, "We are pleased with the second quarter results, which reflect the continued acceptance of our products and services in both foreign and domestic markets. The outlook for the third quarter appears promising as we received several significant orders late in the second quarter for shipment early in the third quarter. Continued expansion into foreign markets coupled with the ongoing roll-out of new products creates a positive climate for future growth."

John J. Cioffi, 57 years old, is retiring as president and chief operating officer of CSI, and will continue to serve as a director. Carlo Gorla, 54 years old, succeeds Cioffi as president and chief operating officer. Gorla was previously president of Best Power International, a division of General Signal Corporation.

"Finding a successor for Cioffi was an enormous challenge. Mr. Cioffi has served as president, chief operating officer and a director of CSI since 1993. His successful managerial ability grew CSI from a $25 million privately held company to a $40 million publicly traded corporation. We are very pleased that the Company will continue to benefit from Mr. Cioffi's wise counsel and experience as he continues to serve on the board. We are fortunate to have found such a capable successor as Mr. Gorla. Mr. Gorla brings more than twenty-five years of international management expertise in strategic planning and business development to CSI," said Canada.

CSI designs, produces and markets an integrated family of advanced predictive maintenance products and services for use in large scale, continuous-run manufacturing facilities worldwide. The Company's Reliability-Based Maintenance(R) products and services help customers detect potentially disruptive conditions in the operation of their machinery before damage or complete mechanical failure occurs, thereby allowing maintenance to be scheduled at the most appropriate time. -0-

                 COMPUTATIONAL SYSTEMS, INCORPORATED
                    Unaudited Financial Highlights

                                    Three Months Ended
                                        June 30,
Operating Highlights:               1996         1995
Total sales                      $11,209,392  $ 9,678,616
Net earnings                     $   949,996  $   593,204
Earnings per share               $      0.19  $      0.17
Average shares outstanding         5,068,388    3,539,886

                                      Six Months Ended
                                        June 30,
                                    1996         1995
Total sales                      $21,940,685  $19,033,096
Net earnings                     $ 1,451,992  $   873,764
Earnings per share               $      0.29  $      0.24
Average shares outstanding         5,047,363    3,652,730

                                  June 30,     December 31,
Balance Sheet Highlights:           1996         1995
ASSETS
Current assets                   $23,176,169  $23,529,831
Total property, plant and
 equipment, net                  $10,067,761  $ 7,938,241
Other non-current assets         $   781,237  $   682,701
Total assets                     $34,025,167  $32,150,773

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities              $ 7,185,583  $ 7,097,991
Long-term debt                   $     3,652  $    13,172
Deferred revenue                 $   576,730  $   512,159
Total shareholders' equity       $26,259,202  $24,527,451
Total liabilities and
 shareholders' equity            $34,025,167  $32,150,773

CONTACT: Computational Systems, Inc., Knoxville

Bryan J. Collier, 423/675-2110