DDL Electronics Reports Profitable First Quarter; Settlement Reached With Century Electronics Manufacturing.

NEWBURY PARK, Calif.--(BUSINESS WIRE)--Nov. 7, 1997--DDL Electronics Inc. (NYSE:DDL) Friday announced results for its first quarter ended Sept. 30, 1997.

Revenues were $12,605,000, an increase of 27 percent over revenues of $9,895,000 for the first quarter of last year. Net income for the latest quarter was $129,000, or 1 cent per share, compared with a net loss of $725,000, or 3 cents per share, in last year's first quarter.

Earnings before interest, income taxes, depreciation and amortization (EBITDA) was $930,000 in the latest quarter, compared with $304,000 in the first quarter of last year.

Gregory L. Horton, president and CEO, commented: "Things are looking up at DDL! The turnaround efforts implemented in the last 18 months have resulted in the first annual operating profit in nearly a decade, net income in the latest quarter, and three consecutive quarters of operating profit.

"Our continued operating improvement, and the pending acquisition of Jolt Technology in Florida, position the company very well in the rapidly growing electronic manufacturing services industry."

In another positive development, this week DDL and Century Electronics Manufacturing Inc. entered into a settlement agreement which generally releases and resolves all claims between them. As previously reported, DDL had initiated legal action against Century in September.

As a result of the settlement agreement, all pending litigation will be dismissed. As a part of the settlement agreement, DDL received a small equity interest in Century. The companies look forward to an amicable relationship in the future.

DDL Electronics, with headquarters in Newbury Park, provides integrated design and electronic manufacturing services (EMS) to original equipment manufacturers in the instrumentation, communications, computer, medical and aerospace industries. The company's EMS operations are located in Southern California and Northern Ireland.

DDL's subsidiary, SMTEK, built electronics assemblies that were on board JPL's Pathfinder which successfully landed on Mars. The company also fabricates multilayer printed circuit boards (PCBs) in its subsidiary, Irlandus Circuits Ltd., located in Northern Ireland. -0-

Certain statements made above are forward-looking in nature and reflect DDL's current expectations and anticipated future plans. Such statements involve various risks and uncertainties that could cause actual results to differ materially from those forecast in the statements. Factors that might cause such differences would include, without limitation, the factors described as "Risk Factors" in the company's registration statement on Form S-3 (No. 333-31349) on file with the Securities and Exchange Commission. -0-

                        DDL ELECTRONICS INC.
              Consolidated Statement of Operations
             (In thousands except per-share amounts)

                                   Three months ended Sept. 30,
                                       1997           1996
                                           (Unaudited)

Revenues                           $ 12,605       $  9,895

Cost of goods sold                   10,777          8,799

Gross profit                          1,828          1,096

Operating expenses:
 Administrative and selling           1,312          1,141
 Goodwill amortization                   60(a)         317

                                      1,372          1,458

Operating income (loss)                 456           (362)

Interest expense                       (213)          (244)

Debt issue cost amortization             --           (124)

Other income (expense), net              (7)             5

Income (loss) before income taxes       236           (725)

Provision for income taxes             (107)(b)         --

Net income (loss)                  $    129       $   (725)

Earnings (loss) per share          $    .01       $   (.03)

Average shares (in 000s)             24,724         23,017

Supplemental information:
 Earnings before interest, income
  taxes, depreciation and
  amortization (EBITDA)            $    930       $    304


(a) During the quarter ended Sept. 30, 1997, the company revised its
    goodwill amortization period from five years to 20 years.  This
    action was taken after the company conducted a study which
    indicated that five years significantly underestimates the
    period of benefit that will be realized from the SMTEK
    acquisition.  This change in accounting estimate, which was
    applied prospectively, had the effect of increasing net income
    for the quarter ended Sept. 30, 1997, by $257,000 or 1 cent per
    share.

(b) Pursuant to quasi-reorganization accounting, as the portion of
    loss carryforwards and deferred tax benefits originating prior
    to the June 27, 1997, quasi-reorganization are utilized, the
    corresponding tax effect ($107,000 for the quarter ended Sept.
    30, 1997) is credited to paid-in capital instead of being
    treated as a reduction of the provision for income taxes.

-0-

                         DDL ELECTRONICS INC.
                      Consolidated Balance Sheet
                           (In thousands)

                                         Sept. 30,         June 27,
                                           1997              1997
                                       (Unaudited)
Current assets:
 Cash and cash equivalents              $   563           $ 4,718(c)
 Accounts receivable, net                 7,910             9,198
 Costs and estimated earnings in
  excess of billings on uncompleted
  contracts                               3,568             3,161
 Inventories, net                         3,502             3,211
 Prepaid expenses and deposits              255               132
    Total current assets                 15,798            20,420
Property, plant and equipment, net        6,498             6,790
Goodwill, net                             4,379             4,439
Other assets                                233               231

                                        $26,908           $31,880

Current liabilities:
 Bank lines of credit payable           $ 2,663           $ 1,378
 Current portion of long-term debt          820             4,167(c)
 Accounts payable                         6,663             9,084
 Other current liabilities                3,046             3,466(c)

    Total current liabilities            13,192            18,095

Long-term debt                            7,607             7,820

Stockholders' equity:
 Paid-in capital                          6,773             6,656(d)
 Retained earnings since June 27, 1997      129                --(d)
 Foreign currency translation
   adjustment                              (793)             (691)
    Total stockholders' equity            6,109             5,965

                                        $26,908           $31,880

(c) On June 30, 1997, which is subsequent to the fiscal year ended

June 27, 1997, the company borrowed $2 million under an

8 percent promissory note due Feb. 1, 1999. Also on June 30,

1997, DDL paid off its 10 percent senior secured notes in the

aggregate principal amount of $5.3 million, plus accrued

interest. If these financing transactions had occurred on June

27, 1997, the amounts shown above for cash and cash equivalents,

current portion of long-term debt and other current liabilities

would have been (in thousands) $1,375, $867 and $3,423,

respectively.

(d) Effective June 27, 1997, DDL effected a quasi-reorganization

which resulted in eliminating an accumulated deficit of

$23,678,000 by a transfer from paid-in capital of an equivalent

amount.



CONTACT: DDL Electronics Inc., Newbury Park

Rick Vitelle, 800/376-9415, ext. 142