DDL Electronics reports fiscal 1996 results; stockholders' equity at highest level in nearly five years.

NEWBURY PARK, Calif.--(BUSINESS WIRE)--Sept. 18, 1996--DDL Electronics Inc. (NYSE:DDL) Wednesday announced results for its fiscal year and fourth-quarter ended June 30, 1996.

For fiscal 1996, revenues were $33,136,000, an increase of 60 percent over pro forma revenues for fiscal 1995 of $20,760,000. Pro forma results exclude A.J. Electronics ("A.J.") and Aeroscientific Corp. ("Aero"), which were sold during fiscal 1995. The increase results from DDL's acquisition of SMTEK Inc. in January 1996 and from increased sales at DDL Electronics Ltd. ("DDL-E").

Net income for fiscal 1996 was $1,598,000 or 9 cents per share, compared with a net loss of $323,000 or 2 cents per share for fiscal 1995 (on a pro forma basis excluding A.J. and Aero). Results for each year include an extraordinary gain of approximately $2.4 million arising from negotiated debt reductions.

Revenues for the fiscal 1996 fourth quarter were $10,414,000 compared with $6,903,000 for the fourth quarter of last year. The increase results from inclusion of SMTEK's operations in DDL's consolidated results in the latest quarter.

In the final quarter of fiscal 1996, DDL incurred a net loss of $1,089,000 or 5 cents per share, compared with a net loss of $1,816,000 or 11 cents per share in last year's fourth quarter. The loss in the fiscal 1996 fourth quarter results primarily from goodwill amortization and interest expense associated with the debt issued to finance the SMTEK acquisition.

In commenting on progress in the latest year, Gregory L. Horton, president and CEO, stated: "DDL's balance sheet was strengthened considerably during fiscal 1996. We finished the year with over $5 million of stockholders' equity, the highest amount in nearly five years.

"Our efforts are now directed toward increasing revenues and profitability by aggressively marketing our existing manufacturing capacity in the U.S. and Europe, and by acquiring additional companies to expand our presence in the electronic manufacturing services industry."

Commenting on his outlook for the current year, Horton said: "Bookings and bidding activity have improved dramatically in the first two months of fiscal 1997. At the end of August, DDL's operating units had total backlog in excess of $22 million, which bodes well for improved operating performance in fiscal 1997.

"SMTEK just booked a $5.8 million order, and is on track to achieve record revenues this year. SMTEK will be included in DDL's consolidated results for all of fiscal 1997, compared to only the second half of fiscal 1996.

"DDL-E, the company's contract assembly operation in the U.K., is making strong progress toward achieving its fiscal 1997 revenue target of $20 million, which would be a 50 percent increase over its fiscal 1996 revenues.

Also encouraging is the fact that the European PCB industry is emerging from a five-month downturn. "Irlandus Circuits weathered this storm fairly well, and is well positioned to benefit from the expected upturn."

Irlandus recently initiated a program of targeted process improvements to further strengthen its technological capability and to reduce operating costs. Management expects that the bulk of the planned capital expenditures under this program will be funded by finance leases.

DDL Electronics Inc., with headquarters in Newbury Park, provides customized integrated electronic manufacturing services to original equipment manufacturers (OEMs) in the computer, telecommunications, instrumentation, medical, industrial and aerospace industries.

The foregoing statements that refer to the company's forecasts and anticipated future plans are forward-looking and reflect the company's current expectations. 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 on file with the Securities and Exchange Commission. -0-

                         DDL ELECTRONICS INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands except per-share amounts)

                     Three Months Ended             Year Ended
                           June 30,                   June 30,
                         (unaudited)                           Pro forma
                        1996      1995         1996     1995     1995/a

Revenues             $ 10,414  $  6,903     $ 33,136  $ 29,576  $ 20,760
Costs and expenses:
 Cost of goods sold     9,509     5,887       29,494    26,516    17,924
 Administrative and
  selling               1,238     2,351        4,175     6,497     5,062
 Goodwill amortization    317       --           634       --        --
 Restructuring charges    --        360           --     1,533/b     --

                       11,064     8,598       34,303    34,546    22,986

Operating loss           (650)   (1,695)      (1,167)   (4,970)   (2,226)
Gain (loss) on sale
 of assets                --        (57)         --      3,317/c     --
Interest expense         (518)     (116)      (1,192)     (883)     (708)
Other income, net          79        52          491       170       170
Loss before income
 taxes                 (1,089)   (1,816)      (1,868)   (2,366)   (2,764)
Income tax benefit        --        --         1,110/d     --        --
Loss before
 extraordinary item    (1,089)   (1,816)        (758)   (2,366)   (2,764)
Extraordinary item        --        --         2,356/e   2,441/f   2,441

Net income (loss)    $ (1,089) $ (1,816)    $  1,598  $     75  $   (323)

Earnings (loss) per
  share:
 Income (loss) before
  extraordinary item $  (0.05) $  (0.11)    $  (0.04) $  (0.15) $  (0.17)
 Extraordinary item       --        --          0.13      0.15      0.15

                     $  (0.05) $  (0.11)    $   0.09  $    --   $  (0.02)

Average shares
 (in 000s)             22,194    16,523       18,807    15,971    15,971

-0-
/a  Pro forma results are presented to show continuing operations
    excluding Aeroscientific Corp. and A.J. Electronics, which were
    disposed of during the first half of fiscal year ended
    June 30, 1995.
/b  Represents liquidation and disposal costs for A.J. Electronics.
/c  Represents a gain on the sale of Aeroscientific Corp.'s assets
    in December 1994.
/d  Represents tax refunds received for the carryback of net
    operating losses.
/e  Represents an extraordinary gain for the negotiated reduction of
    obligations under several consulting and deferred fee
    arrangements with former officers, key employees and directors
    of the company.
/f  Represents an extraordinary gain realized on the extinguishment
    of a bank loan.

-0-

                          DDL ELECTRONICS INC.
                  CONDENSED CONSOLIDATED BALANCE SHEET
                            (In thousands)

                                          June 30,       June 30,
                                            1996           1995

Current assets:
Cash and cash equivalents               $  2,519       $  2,917
Accounts receivable                        5,670          3,600
Costs and estimated earnings in
  excess of billings on uncompleted
  contracts                                2,976             --
Inventories                                4,014          2,188
Prepaid expenses and deposits                314            171
Total current assets                      15,493          8,876
Property, plant and equipment, net         5,917          3,309
Goodwill                                   5,708             --
Other assets                                 969            405

                                        $ 28,087       $ 12,590

Current liabilities:
Current portion of long-term debt       $    603       $    633
Accounts payable                           7,484          5,283
Other current liabilities                  3,892          2,988
Total current liabilities                 11,979          8,904
Long-term debt                            10,935          7,030
Stockholders' equity (deficit):            5,173         (3,344)

                                        $ 28,087       $ 12,590

CONTACT: DDL Electronics Inc., Newbury Park

Rick Vitelle, 805/376-9415, ext. 142