Concord Camera Corp. announces first quarter results.

AVENEL, N.J.--(BUSINESS WIRE)--Nov. 11, 1996--Concord Camera Corp. ("Concord") (NASDAQ National Market: LENS) today reported financial results for the first fiscal quarter ended September 30, 1996. (See attached tables).

For the first fiscal quarter ended September 30, 1996, net sales were $15,132,554 compared to $17,535,733 in the first quarter of last year, a decrease of $2,403,179 or 13.7%. Concord reported a net (loss) for the September 30, 1996 quarter of ($608,258) or ($.06) per share, as compared to net income of $1,116,875, or $.10 per share for the September 30, 1995 quarter. The loss for the quarter was primarily the result of the decline in sales and manufacturing volume coupled with substantial increases in product development costs, resulting in a decrease in gross margin percentage to 24.4% from 33.0% for last year's first quarter. The Company continued to generate positive cash flow from operations during the first fiscal quarter.

Commenting on the financial results, Ira B. Lampert, Concord's Chairman and Chief Executive Officer, said, "The sales decline compared to the same period last year was in both single use and traditional cameras, but for different reasons. Lower sales of traditional cameras were expected and previously outlined in connection with management's decision to eliminate a number of older motorized traditional models and take inventory provisions in the fourth quarter of fiscal 1996. Furthermore, sales of traditional 110 and 35mm cameras are sluggish industry-wide as retailers have been reducing the shelf space they are devoting to these camera models because of the introduction of Advanced Photographic System ("APS") products. With respect to single use cameras, normal production ramp-up of single use APS cameras impacted the Company's ability to satisfy all OEM customer orders in the first quarter. The Company expects increased production levels in the second and third quarters and anticipates single use camera sales for the first six months will exceed the same period last year.

The Company has designed and will be introducing a number of innovative APS traditional cameras. These new APS traditional cameras will be introduced in the fourth quarter of the Company's 1997 fiscal year and the first half of the 1998 fiscal year. These models have been well received at major photographic trade shows and by large potential customers and the Company believes their introduction will reverse the declining sales trend of traditional cameras. Demand for Concord's single use cameras continues to be strong. The Company has received substantial orders for its newly introduced OEM Customer APS single use cameras."

Mr. Lampert continued, "In the single use category, we are readying two additional APS models, one daylight and one flash; two other APS models for a major OEM customer and a 35mm camera in a single use body design in which new rolls of film can be inserted. In addition, we are completing development of two new 35mm single use cameras, daylight and flash, for our OEM customers, with initial anticipated delivery in our fourth fiscal quarter.

The decline in margin from last year was due to a number of factors. The decline in unit manufacturing volume caused a decrease in the absorption of production overhead. At the same time, product development costs associated with new products of approximately $771,000 more than doubled from the previous year's costs of approximately $324,000. As new products are introduced and production volume increases, the Company expects margins to increase.

As compared to last year's first quarter, expenses were lower overall with SG&A down 7.9% reflecting the benefits of the consolidation of warehouse and administrative facilities undertaken in the 1996 fiscal year. Selling expenses for the first quarter of fiscal year 1997 of $1,699,858 declined $173,217 or 9.3% from the same period last year. General and administrative expenses of $2,162,254 declined $158,735 or 6.8% from the same period last year. Financial expenses of $364,515 increased $29,306 or 8.7% from the same period last year. Legal expenses of $60,042 decreased by $40,852 or 40.5%, from the same period in the prior year, reflecting the settlement of a number of outstanding issues in fiscal 1996.

Discussing new products, Mr. Lampert stated, "APS is where the excitement is in our industry and we have both the traditional and single use categories covered. In addition to developing two APS traditional cameras, we are engaged in developing two 35mm traditional cameras for two well known manufacturers of high profile branded educational toys, with initial production for one of these products expected to commence during the last half of the fiscal year We are also well along in negotiations with two potential new OEM customers for the Company's new traditional APS cameras. Annualized sales estimates for the larger of these two potential contracts are projected in the $30 to $35 million range once full production is attained. The Company has a number of quality and performance evaluations it has to meet before these arrangements can be completed. We have also commenced negotiations and quality testing with one of these potential OEM customers for a significant APS single use camera contract."

Mr. Lampert noted, "While it appears that the second quarter will be profitable with sales ahead of those for the first quarter, and possibly ahead of sales for the second quarter of last year, we remain cautious about near term financial performance. We are most enthusiastic over the potential results to be realized from the introduction of our new products."

Concord's Balance Sheet Remains Strong

Mr. Lampert continued, "Concord completed the first quarter of the new fiscal year in a strong financial position. Shareholders' equity is more than $29.8 million, or approximately $2.75 per share, and we have only $2.2 million in long-term debt. In addition, our current ratio at the close of the first quarter was 1.96 and we have $16,021,961 in working capital. The investments we have made in plant and equipment over the last two years and continue to make will enable the Company to grow substantially from its existing manufacturing base.

While this is a transitional year for Concord as the Company introduces new products, we do expect sales for the year to be no less than last year. While there is much to do, we believe we have the management, engineering and financial resources to complete our strategic plans for fiscal 1997."

This press release contains forward-looking statements that involve numerous risks and uncertainties. The Company's actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in the Company's filings with the Securities & Exchange Commission. In particular, expected sales increases could be adversely affected by production difficulties or economic conditions adversely affecting the market for the Company's products. To obtain the results expected from the introduction of the new products will require timely completion of development, successful ramp up of full-scale production on a timely basis and consumer acceptance of the products. In addition, the Company's potential new OEM relationships will require successful conclusion of negotiations, continued ability of the Company to meet quality and performance tests and successful implementation of production at greatly increased volumes, as to all of which there can be no assurance.

Concord Camera Corp. is principally engaged in the manufacture and sale of popularly priced, easy-to-use, conventional and single use 35 millimeter and Advanced Photo System cameras and 110 cartridge cameras which it manufactures and assembles in the Peoples Republic of China under the trade names CONCORD, KEYSTONE, LE CLIC' and, for sales outside the United States and Mexico, ARGUS trade names, as well as private labels. The Company sells and markets its camera products worldwide through direct sales offices in the United States, Canada, Germany, Hong Kong, Japan, Panama, United Kingdom, France and through independent sales agents. -0-

                           CONCORD CAMERA CORP.
                   Consolidated Statements of Operations
                                (Unaudited)

                                   For the three months ended
                                          September 30,
                                        1996        1995

Net sales                          $15,132,554  $17,535,733
Cost of products sold               11,446,970   11,740,551
Gross profit                         3,685,584    5,795,182
Selling Expenses                     1,699,858    1,873,075
General and administrative expenses  2,162,254    2,320,989
Financial expenses                     364,515      335,209
Other (income), net                      7,173       48,140
Legal expenses and settlement costs    100,894       60,042
Net Income (loss)                    ($608,258)  $1,116,875
Income (loss) per common and common
 equivalent share                       ($0.06)       $0.10
Weighted average number of
 common and common
 equivalent shares outstanding      10,882,973   10,998,929

                                  CONCORD CAMERA CORP.
                                Consolidated Balance Sheets

                                            Sept. 30,     June 30,
                                              1996         1996
                                          (Unaudited)

Current Assets:
Cash                                       $4,813,703   $4,996,770
Accounts receivable, net                    8,222,141    7,550,408
Inventories                                17,401,924   17,491,615
Prepaid expenses and other current assets   2,200,347    2,540,802
Total current assets                       32,638,115   32,579,595
Plant and equipment, net                   11,764,618   11,708,736
Goodwill, net                               1,410,540    1,510,197
Other assets                                3,996,299    4,051,268
Total assets                              $49,809,572  $49,849,796

Current Liabilities:
Short-term debt                            $6,709,232   $6,368,972
Current portion of long-term debt              30,374       29,552
Current obligations under capital leases      568,685      570,899
Accounts payable                            6,331,935    6,000,328
Accrued expenses                            2,598,461    2,172,863
Income taxes payable                               --       79,050
Other current liabilities                     377,467      661,735
Total current liabilities                  16,616,154   15,883,399
Deferred income taxes                         469,544      442,889
Long-term debt                                422,492      430,589
Obligations under capital leases            1,801,256    1,948,443
Other long-term liabilities                   666,791      666,791
Total liabilities                          19,976,237   19,372,111
Stockholders' equity:
Common stock, no par value, 20,000,0000
authorized; 10,944,026 issued as of        39,361,893   39,361,893
September 30 and June 30, 1996
Paid in capital                               850,786      850,786
Deficit                                    (7,411,250)  (6,802,992)
Notes receivable arising from common stock
 purchase agreements                       (2,515,175)  (2,479,083)
                                           30,286,254   30,930,604
Less: treasury stock, at cost; 63,553 shares (452,919)    (452,919)
Total stockholders' equity                 29,833,335   30,477,685
Total liabilities and stockholders'
 equity                                   $49,809,572  $49,849,796

CONTACT: Concord Camera Corp. The Equity Group Inc.

Barry Shereck, VP & CFO  Robert Goldstein  [phone]

[phone] Linda Latman (212) 8936-9609