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DONNELLY CORPORATION REPORTS FIRST QUARTER FINANCIAL RESULTS

 HOLLAND, Mich., Oct. 19 /PRNewswire/ -- Donnelly Corporation (AMEX: DON) today reported first quarter financial results for the 1994 fiscal year.
 Net sales for the first quarter of fiscal 1994 were $68,255,000, nearly flat compared to $67,851,000 for the same period last year. Net income for the first quarter was $872,000, compared to $1,546,000 for the first quarter of fiscal 1993. Earnings per share for the first quarter were $.11 compared to $.20 in the same period last year.
 Financial performance for the quarter is consistent with expectations for the period in terms of historical patterns for first quarter results (first quarter results in fiscal 1993 were unusually high compared to historical patterns due to an extra week in the business period and a favorable product mix) and in line with higher levels of funding required for new program start-ups.
 Sales and earnings for the first quarter were influenced by a number of factors: 1) Donnelly's accounting period for the current year was a normal 13 weeks compared to 14 weeks last year; 2) a deep and prolonged recession in Europe has negatively impacted Donnelly's wholly owned Irish subsidiary; 3) increased competition and a downturn in the demand for coated glass used in liquid crystal displays (LCDs) is negatively affecting Donnelly Applied Films (a joint venture) in Boulder, Colorado; 4) lower production of Honda vehicles; and 5) delayed new programs for the computer and appliance industries.
 Despite short-term slowdowns and program delays, Donnelly continues to experience strong long-term demand for new products. Growth in fiscal 1994 is expected to continue at moderate levels and then increase significantly in fiscal 1995 and 1996. Many new programs have already been committed by customers to Donnelly. The majority of the funding for these programs is required by Donnelly in the current, 1994, fiscal year and capital spending for the 1994 fiscal year is expected to more than double over 1993 levels.
 Expansion/productivity improvement programs being funded in fiscal 1994 include:
 1. Expansion of the Modular Window System's production process
 to produce redesigned vehicle windows systems for Chrysler.
 2. Expansion of production facilities for complete exterior
 mirror systems to support new orders from Ford and Mazda.
 3. Construction of a new Interior Mirror Systems facility which
 will consolidate operations of three older facilities to
 improve productivity.
 4. Construction of a new facility in Mexico to produce exterior
 mirror glass components.
 5. Development of expansion on two new market areas for
 Donnelly ... interior lighting and trim systems for the
 automotive industry and refrigerator shelving systems for
 the appliance industry.
 Dwane Baumgardner, CEO for Donnelly Corporation, stated:
 "Donnelly is currently positioned very strongly in the automotive marketplace. We have strong commitments from customers for large new business programs that could double the size of our company over the next five to seven years. We are excited by Donnelly's future business prospects and recently increased shareholder dividends to reflect our enthusiasm.
 "Our 1994 fiscal year is a 'bridge' to a period of anticipated growth beginning in our 1995 fiscal year. In the meantime, we will increase our investment in new equipment, facilities, and development programs to support anticipated long-term growth."
 Donnelly's primary market, the automotive industry, experienced continued growth during the quarter. Production of cars and light trucks produced in North America increased by 8 percent. The outlook for the second quarter is for automotive production levels to again increase compared to the same period last year. Continued strength in the automotive marketplace is expected to help Donnelly fund the many new programs and higher levels of Research and Development needed to meet new business demands in fiscal 1995 and beyond.
 Donnelly Corporation is an international company dedicated to serving customers around the world with high-quality fabricated, molded and coated glass products for the automotive and electronics industries. The company has been based in Holland, Michigan, since 1905 and today operates from 20 facilities around the world. Donnelly is also recognized as a leader in the application of participative management practices and was recently named as one of the "Top 10" in the new book entitled, The 100 Best Companies to Work for in America.
 DONNELLY CORPORATION
 COMBINED CONSOLIDATED STATEMENTS OF INCOME
 (in thousands, except Three Months Ended
 per share data) October 2, 1993 October 3, 1992
 Net Sales $ 68,255 $ 67,851
 Gross profit 14,136 15,254
 Operating income 832 2,634
 Interest expense 765 845
 Income before taxes on income 380 2,097
 Net income 872 1,546
 Income per share of common stock .11 .20
 Dividends declared per share
 of common stock .08 .07
 Weighted average number of
 common shares outstanding 7,710 7,671
 (in thousands, except Fiscal Year Ended
 per share data) July 3, 1993 June 27, 1992
 Net Sales $300,927 $271,399
 Gross Profit 68,910 60,752
 Operating income 16,058 12,892
 Interest expense 3,216 3,506
 Income before taxes on income 10,936 10,805
 Net income 7,852 7,082
 Income per share of common stock 1.02 1.00
 Dividends declared per share
 of common stock .28 .24
 Weighted average number of
 common shares outstanding 7,686 7,070
 COMBINED CONSOLIDATED BALANCE SHEETS
 (in thousands) October 2, 1993 July 3, 1993
 ASSETS
 Current Assets:
 Cash & Equivalents $ 1,558 $ 1,214
 Accounts Receivable, Net 39,436 39,226
 Inventories 15,474 15,049
 Other Current Assets 11,348 12,050
 Total Current Assets 67,816 67,539
 Net Property, Plant and Equipment 68,714 65,919
 Other Assets 5,712 6,382
 142,242 139,840
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current Liabilities:
 Accounts Payable $ 19,236 $ 22,819
 Accruals 13,593 10,811
 Current Maturities of
 Long-Term Debt 77 77
 Total Current Liabilities 32,906 33,707
 Long-Term Debt 36,109 33,688
 Deferred Income Taxes & Other Liab. 6,502 6,210
 Total Liabilities 75,517 73,605
 Minority Interest 947 689
 Shareholders' Equity 65,778 65,546
 142,242 139,840
 -0- 10/19/93
 /CONTACT: Maryam Komejan of Donnelly Corporation, 616-786-6022/
 (DON)


CO: Donnelly Corporation ST: Michigan IN: AUT SU: ERN

JG -- DE021 -- 4079 10/19/93 14:49 EDT
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Date:Oct 19, 1993
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