ECC International reports Fiscal 1997 second quarter results.

WAYNE, Pa.--(BUSINESS WIRE)--Feb. 7, 1997--ECC International Corp. (NYSE:ECC) today reported comparative sales and earnings for the second quarter and six-months ended December 31, 1996.

As earlier indicated, for the second quarter ended December 31, 1996, the Company reported sales of $23,619,000 and a net loss of $1,649,000, or $0.21 per share on weighted average shares outstanding of 8,008,977, compared to sales of $31,691,000 and net income of $1,559,000, or $0.20 per share on weighted average shares outstanding of 7,908,195, in the comparable period a year ago.

For the first six months of fiscal 1997, the Company reported sales of $48,039,000 and a net loss of $1,434,000, or $0.18 per share on weighted average shares outstanding of 8,008,962, compared to sales of $58,671,000 and net income of $3,246,000, or $0.41 per share on weighted average shares outstanding of 7,923,003 in the comparable period a year ago.

Sales order backlog at December 31, 1996 was $77,100,000 compared to a sales order backlog of $89,700,000 at December 31, 1995. The Company had an additional $61,100,000 of government exercisable production options under existing government contracts at December 31, 1996.

The Company announced on January 15, 1997 that it would recognize an approximate $1.2 million net loss in its UK subsidiary, ECC Simulation Limited, for the quarter ended December 31, 1996. At that time, the Company stated it expected the subsidiary's revenue for the coming six quarters would decline as a result of a lower than projected sales order level which will result in higher overhead rates for this period. As a result, contract revenue recognized to date on two major ECC Simulation Limited contracts that have been in process for three years were retroactively adjusted to reflect this new higher overhead rate, resulting in the second quarter charge to earnings.

Net losses in the Company's vending subsidiary, ECC Vending Corp., for the six-month period ended December 31, 1996 were $1,282,000. It is expected that vending will incur operating losses in the third quarter of fiscal 1997 as well, but revenue is expected to increase in the fourth quarter of fiscal 1997.

The Company stated it is in the completion phase of several major contracts and expects revenue for its domestic training and simulation operations to decline in the second half of fiscal 1997.

Statements in this press release regarding anticipated revenues are forward-looking statements and are subject to risks and uncertainties that could cause actual results to differ materially. The following are important factors, among others, that should be considered in evaluating any forward-looking statements: the Company's and its subsidiary's actual revenue, sales order levels, overhead rates, expense levels, procurement of sales orders in the vending business and audit adjustments during the coming six quarters.

ECC International Corp. is a world leader in the design, research and production of simulators and related training programs for crew, operator and maintenance training. Through its headquarters and Instructional System Development Group in Wayne, PA; its System Design and Production Center in Orlando, FL; and through a wholly owned subsidiary, ECC Simulation Limited in Brighton, England, the Company provides a wide range of products and services used by all branches of the U.S. Department of Defense and by armed forces in 25 countries. ECC's frozen food and new beverage machine business, operated through its wholly owned subsidiary, ECC Vending Corp., is part of a diversification program whereby ECC has sought to apply its engineering and manufacturing capabilities to build a commercial business segment. (Statistical Table Follows) -0-

              ECC INTERNATIONAL CORP. AND SUBSIDIARIES
            (In Thousands Except Share and Per Share Data)
                               (Unaudited)


                      Three Months Three Months Six Months  Six Months
                         Ended         Ended       Ended     Ended
                        12/31/96     12/31/95    12/31/96   12/31/95


Net Sales              $  23,619     $ 31,691    $ 48,039   $ 58,671
Cost of Sales             21,123       25,278      40,823     45,907
Gross Profit               2,496        6,413       7,216     12,764
Expenses:
Selling, General
 & Administrative          3,751        3,505       7,459      6,763

  Systems Development        253          125         415        184
        Total Expenses     4,004        3,630       7,874      6,947

Operating (Loss)/Income   (1,508)       2,783        (658)     5,817

Other Income (Expense):
 Interest Income              59           50         108        113
 Interest Expense           (467)        (387)       (900)      (851)
 Other - Net                  31          (70)          9       (130)
  Total Other Expense       (377)        (407)       (783)      (868)
(Loss)/Income Before
 Income Taxes              (1,885)      2,376      (1,441)     4,949

(Benefit)/Provision for
 Income Taxes                (236)        817          (7)     1,703

Net (Loss)/Income     $    (1,649)  $   1,559    $  (1,434) $  3,246
(Loss)/Earnings Per
 Common Share
 and Common Share
 Equivalents          $     (0.21)  $    0.20    $   (0.18) $   0.41

Weighted Average Number of
  Common and Common
  Share Equivalents
  Outstanding           8,008,977   7,908,195    8,008,962 7,923,003

CONTACT: George W. Murphy John P. Kehoe/Van Negris

President and CEO Kehoe, White, Savage & Company, Inc.

610/687-2600 212/888-1616