Elron announces $6.3 million net income for 1994.

HAIFA, Israel--(BUSINESS WIRE)--March 8, 1995--Elron Electronic Industries Ltd. (NASDAQ:(ELRNF) today announced its audited results for the fiscal year ended December 31, 1994.

Elron's net income for 1994 was approximately $6.3 million, or approximately $0.35 per share. Income, excluding a loss of approximately $5.2 million in connection with the merger of Fibronics International Inc. with Elbit Ltd., was approximately $11.5 million. In 1993 net income was approximately $10.5 million, or approximately $0.61 per share.

In the fourth quarter of 1994 Elron's net income was approximately $1.1 million or approximately 0.05 per share. Income, excluding a loss of approximately $2.8 million in connection with the merger of Fibronics International Inc. with Elbit Ltd., was approximately $3.9 million. In the fourth quarter of 1993 net income was approximately $2.3 million or approximately 0.13 per share.

Aggregate revenues of the Elron group of companies continued to grow and reached $1 billion in 1994, compared with approximately $800 million in 1993, a growth of approximately 25%. Exports and sales outside of Israel represent approximately 86% of total sales of the Elron group.

Elron's share in the net income of affiliated companies reached approximately $8 million in 1994, compared with approximately $12.1 million in 1993. The decrease was caused largely by Elbit's write-off, in the last quarter of the year, of part of the goodwill resulting from the acquisition of Fibronics. This reduced Elron's share in the net income of the affiliates, in the last quarter of the year, by approximately $2.5 million in addition to the direct loss involved in the merger of Fibronics as mentioned above. Consequently, Elron's share in the net income of Elbit was approximately $13 million as compared to approximately $16 million last year. Elron's 1993 share in Elbit's net income included an approximately $3.7 million gain resulting from a private placement by Elscint Ltd., a subsidiary of Elbit.

At the end of 1994 Elbit completed its acquisition of Fibronics. In the merger, Fibronics shares were converted into Elbit shares at a ratio of 20 Fibronics shares for each Elbit share. At the beginning of the fourth quarter of 1994, Elbit completed the acquisition of Diasonics Ultrasound Inc. in a $70 million cash merger transaction. Elron received from Elbit a yearly dividend, as in prior year, of approximately $1.9 million.

In the fourth quarter of 1994 the Company had a gain of approximately $1.2 million resulting from a private placement by Chip Express Corporation to Morgan Stanley Venture Partners. Chip Express reached profitability during the third quarter of 1994, with continuous growth in sales.

Zoran Corporation completed a private placement of approximately $3 million in the fourth quarter of 1994. Elron participated to the extent of approximately $1.2 million. As a result, Elron's holdings in this company rose to approximately 28%.

At the end of the third quarter of 1994 Elron transferred its activities in the field of computerized training to PC Etcetera, Inc. (traded over-the-counter in the United States), which specializes in frontal training in the field of computers, in exchange for securities in PC Etcetera. As a result of this transaction, Elron received common stock which, at year end, comprised approximately 31% of the shares of PC Etcetera. In addition, Elron invested approximately $1 million in the company in return for preferred shares.

In 1994 Elron continued to invest in DEP Technology Holdings Ltd. which holds R D C Rafael Development Corporation Ltd. The Company invested approximately $1.6 million together with its partners, Discount Investment Corporation Ltd. and PEC Israel Economic Corporation, which invested similar amounts. Elron's total investment has reached approximately $2.6 million at year end.

In the course of 1994, the Company recorded income of approximately $10.1 million resulting from sale of 162,000 shares of NetManage Inc. and from an increase in value of 150,000 shares of this company which were transferred to marketable securities account. Elron continues to hold 550,000 shares of NetManage held at cost at a value of approximately $167,000 on the balance sheet date.

Athena Venture Partners L.P. continued in 1994 to distribute to its partners part of its holdings which have gone public. The contribution of the Athena Fund to Elron's net income in 1994 reached approximately $1.3 million. As per its commitment to invest approximately $1 million in Gemini Israel Fund L.P., Elron invested an additional $350,000 in the course of 1994, with total investments in the funds reaching approximately $660,000.

Since June 1994, the company has operated a wide area data communications network, "elroNet" which provides international electronic communication services. The purpose of this service is to provide Israeli and other companies with the capability of active and close cooperation via computer communications. The elroNet network provides, among others, a direct connection to the INTERNET, which is accessed by over 30 million users around the world. In parallel, elroNet provides access to data bases and commercial applications on the INTERNET. elroNet commenced sales beginning at the end of the third quarter of 1994.

In the fourth quarter of 1994 Elron completed a rights offer to its shareholders in Israel and the United States and raised approximately $22.5 million. Approximately $19.4 million of the funds raised were invested in Elbit as a result of Elron's participation in a rights offer of Elbit.

On December 31, 1994 the cash balance in deposits and marketable securities reached approximately $21.5 million.

Today Elron faces the challenge to realize the full advantage of the business opportunities resulting from the convergence of communications networks, computers and interactive information services. This combination creates a growing demand for software products and services which will facilitate electronic commerce and innovative methods of marketing and distribution.

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 medical diagnostic imaging, advanced defense electronics, manufacturing automation, high speed data communications, networking services, semiconductor and software products. -0-

              Elron Electronic Industries Ltd.
                    Statement of Income
       (In Thousands of U.S. Dollars, except per share amounts)

                               Year ended December 31,

                                1994       1993      1992
Company's share in net
 income of affiliate
  companies, net          $    8,016 $   12,127  $  4,212
Gain from changes in
 holdings in affiliated
  companies                    1,250      1,759    10,872

Other income, net              7,794      1,922     2,837
Finance income, net              120        443       951
                              17,180     16,251    18,872
                              ------     ------    ------
Costs and expenses, net        5,632      5,388     4,532
                               -----      -----     -----
                              11,548     10,863    14,340

Loss on sale of
 Fibronics                     5,205          -         -
Income before cumulative
 effect
  of change                    6,343     10,863    14,340
Cumulative effect of
 change in accounting
  method as of the
   beginning of year               -       (328)        -
Net income                $    6,343 $   10,535  $ 14,340

Earnings per share
 Earnings per share before
  cumulative effect of
   change                 $     0.35 $     0.63  $   0.84
Cumulative effect of
 change per share                  -      (0.02)        -
Net income per share      $     0.35 $     0.61  $   0.84

Weighted average number
 of shares outstanding
  (thousands)                 18,170     17,389    17,126

Elron Electronic Industries Ltd.
BALANCE SHEETS
(In Thousands of U.S. Dollars)

                                    December 31,
                                  1994        1993
                                   (Audited)

Current Assets             $    23,624  $   22,113
                                ------      ------
Investments
- Affiliated companies         149,051     118,736
- Other investments             17,568      21,889
Deposit                            815           -
                               167,434     140,625
                               -------     -------
Fixed Assets, net                1,201         523
                                 -----         ---
                           $   192,259  $  163,261

Current Liabilities        $     1,665  $      915
Shareholders' equity           190,594     162,346
                           $   192,259  $  163,261

CONTACT: Elron Technologies, Inc.

Shelly Perumal, 212/935-3110

212/935-3882 (FAX)