Elron Reports 1999 Nine Months Earnings of $22 Million and Third Quarter Earnings of $0.9 Million.

HAIFA, Israel--(BUSINESS WIRE)--Nov. 8, 1999--

Elron Electronic Industries Ltd. (NASDAQ:ELRNF) a leading multinational high technology holding company, today announced 1999 third-quarter net income of approximately $0.9 million, or $0.04 per share. Net income in the third quarter of 1998 amounted to approximately $2.1 million, or $0.10 per share.

The results of the third quarter were affected by a one-time provision, net after tax, of $3.2 million for retirement grant to Elron's founder and President for the past 38 years.

In the third quarter of 1999 the Company had an income of approximately $2.6 million from sale of 100,000 shares of Zoran (NASDAQ:ZRAN) as of the day of this report Elron holds approximately 1,364,000 shares of Zoran.

In the nine months ended September 30, 1999, net income amounted to approximately $22 million, or $1.04 per share. This included a gain, net after tax, of approximately $19.7 million, resulting from the sale of Elron holdings in Elbit Medical Imaging in the second quarter of 1999. Net income in the first nine months of 1998 amounted to approximately $45.8 million, or $2.24 per share, which included a $36.5 million gain resulting from the completion of the sale of Elbit Medical Imaging ultrasound division to GE Medical Systems.

Sales by Elron's wholly-owned U.S. subsidiary, Elron Software Inc., in the third quarter and first nine months of 1999 amounted to approximately $10.8 million and $29.7 million respectively. Sales in the same periods of 1998 amounted to approximately $3.3 million and $11 million respectively. The sales resulting from the system integration activity, acquired in December 1998, are the main reason for the increase in sales.

Elron's Board of Directors declared a third quarter dividend of $0.5 per share. This dividend should not indicate similar future dividend policy. The dividend is determined each quarter by the Board of Directors. The dividend will be paid on November 29, 1999 to shareholders of record at the close of business on November 15, 1999. The Company will deduct income tax at source at a rate currently estimated to be 25%.

Ami Erel, Chairman and Chief Executive Officer of the Company, said: "I would like to thank U. Galil for the kind and dignified manner in which he transferred over the post, and wish him continued success in his future activities. We congratulate Partner, which completed successfully its public offering in the U.S. and Europe. Elron will continue to implement its strategy to create value for its shareholders from its present holdings and to build new activities, primarily in software, communication and Internet related activities".

Elron Electronic Industries Ltd. is a multinational high technology holding company based in Israel. Through affiliates, Elron is engaged with a group of high technology operating companies in the fields of advanced defense electronics, communication, semiconductors, networking, software and information technology. For further information, visit at http://www.elron.com

Any statements in this press release that may be considered forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Actual results may differ from such forward-looking statements due to the risk factors discussed in periodic reports filed by the Company with the Securities and Exchange Commission which the Company urges investors to consider. -0-

                   Elron Electronic Industries Ltd.
                    CONDENSED STATEMENTS OF INCOME
          (US Dollars in Thousands except per share amounts)

                  Nine Months Ended        Three Months Ended
                1999          1998        1999             1998
                    (Unaudited)               (Unaudited)

Income
Sales         $ 29,692     $ 10,974     $ 10,821         $ 3,274
Company's share
 in income
 (loss)
 of affiliated
 companies, net   (834)      37,537         (926)            897
Gain from disposal
 of and changes
 in holdings in
 affiliated
 companies      31,721        3,877          552           1,987
Other income,
 net             9,794        9,590        4,166             869
Finance income   4,105        1,596        2,422             682
                74,478       63,574       17,035           7,709

Costs and
 Expenses       41,875       15,803       17,617           5,492
Amortization of
 In-process
 research and
 development
 acquired            -        1,938            -             121
                41,875       17,741       17,617           5,613

Income (loss)
 before income
 taxes          32,603       45,833         (582)          2,096
Income taxes   (10,587)           -        1,526               -
Net Income    $ 22,016     $ 45,833      $   944         $ 2,096
Earnings per
 share
Basic per share
 data
Basic net income
 per share      $ 1.04      $  2.24      $  0.04         $  0.10
Number of shares
 used in
 computation
 (thousands)    21,103       20,442       21,138          20,651

                       CONDENSED BALANCE SHEET
                       (US Dollars in thousands

                      September 30,                  December 31
                  1999         1998                     1998
                      (Unaudited)                    (Audited)

Current Assets $ 168,879     $ 45,651                $ 35,165
Investments and
 long-term
 balances
-Investments in
 affiliated
 companies       104,404      214,431                 218,437
-Other
 investments      15,799       15,749                  16,317
-Long term Deposits
 and debentures    6,800            -                       -
                 127,003      230,180                 234,754

Fixed Assets, net  4,645        1,205                   3,293
Other assets, net 30,160        7,622                  32,512
               $ 330,687    $ 284,658               $ 305,724

Current
 liabilities   $  43,348    $   5,400               $  14,656

Long term
 liabilities      43,362       10,000                  40,919
Shareholders'
 equity          243,977      269,258                 250,149
              $  330,687    $ 284,658               $ 305,724