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GENERAL COMPUTER CORPORATION REPORTS CONTINUED IMPROVEMENT IN CLAIMS PROCESSING REVENUE AND THE SETTLEMENT OF LITIGATION REQUIRING A CHARGE TO EARNINGS

 GENERAL COMPUTER CORPORATION REPORTS CONTINUED IMPROVEMENT IN
 CLAIMS PROCESSING REVENUE AND THE SETTLEMENT OF
 LITIGATION REQUIRING A CHARGE TO EARNINGS
 TWINSBURG, Ohio, Dec. 20 /PRNewswire/ -- General Computer Corporation (NASDAQ/NMS:GCCC) today announced that, on a 56 percent increase in claims processing revenue, second quarter operating income for the period ended November 30, 1991 was $26,000, before a charge related to litigation, compared with $18,000 in the same period last year. In November, the Company agreed to settle a collection action it had instituted in 1989 against a former customer, resulting in a $150,000 charge against earnings and a net loss of $124,000 for the quarter.
 Commenting on the quarter, Richard R. Pilarczyk, president and chief executive officer said, "With the continued growth in our claims processing volume and the opportunities ahead of us, we felt it was in the best interest of the Company to settle the litigation so that Company resources, both management time and cash, would be focused to expand our revenue and earnings growth. While we had provided reserves for the litigation, a settlement had the advantage of guaranteeing payment of a sum certain. It also eliminated litigation expense and the uncertainty of the outcome of litigation."
 Sales for the 1992 second quarter were $3.0 million compared to $3.1 million in last year's quarter. Claims processing revenue increased to $1.6 million from $1.0 million last year, showing the strength of the electronic data interchange portion of the business. Impacted by current economic conditions, system sales were approximately $300,000, down 67 percent from last year's $1.0 million. The Company believes that system sales have the potential for improvement in the second half of the year. Expenses before the write-off remained under control and were down 4 percent from last year's quarter.
 For the first half of fiscal 1992, sales were $6.2 million, compared with $6.5 million for the same period last year. Claims processing revenue of $3.1 million was 50 percent higher than last year's $2.0 million. System sales of $1.1 million were down 55 percent from last year's $2.4 million. With expenses down 8 percent and lower interest expense, earnings before the write-off were $216,000 compared with $70,000 last year. As a result of the charge, net earnings were $66,000 or $.04 per share in the 1992 first half compared with $70,000 or $.04 per share in last year's first half.
 In conclusion, Mr. Pilarczyk stated, "The continued improvement in claims processing revenue should make financial results in the second half of the year better than the first half."
 General Computer Corporation is a leading developer of electronic systems and services for pharmacies and the health care industry.
 GENERAL COMPUTER CORPORATION
 STATEMENTS OF OPERATIONS
 (In thousands except per share amounts)
 Quarter Ended Six Months Ended
 November 30 November 30
 1991 1990 1991 1990
 Sales
 Services:
 Claims processing $1,590 $1,021 $3,070 $2,044
 Other 1,057 1,074 2,041 2,034
 2,647 2,095 5,111 4,078
 System sales 326 997 1,058 2,362
 Lease operations 19 40 43 84
 Total sales 2,992 3,132 6,212 6,524
 Cost of sales:
 Services 1,286 1,026 2,405 2,038
 Systems 572 886 1,402 1,960
 Total 1,858 1,912 3,807 3,998
 Gross profit 1,134 1,220 2,405 2,526
 Expenses
 Selling 494 460 968 945
 General & Administrative 507 581 990 1,192
 Write-off resulting
 from settlement
 of litigation (A) 150 0 150 0
 Total operating expenses 1,151 1,041 2,108 2,137
 Operating profit (loss) (17) 179 297 389
 Interest expense (120) (170) (252) (342)
 Sundry income 13 9 21 23
 Earnings (loss)
 before income taxes (124) 18 66 70
 Income taxes (B) 0 0 0 0
 Net earnings (loss) $ (124) $ 18 $ 66 $ 70
 Net earnings per
 common share $ (.08) $ .01 $ .04 $ .04
 Common stock and
 equivalents 1,574 1,574 1,619 1,574
 (A) The Company agreed to settle a claim against a former customer relating to a 1986 sales transaction rather than expend the time and legal fees to litigate the claim. Provisions had previously been made in the financial statements for the expected impact. The additional write-off, in the opinion of management, is less than the cost of litigation would have been.
 (B) The Company has operating loss carryforwards available, therefore, no provision was made for Federal income taxes.
 -0- 12/20/91 R
 /CONTACT: David R. Stitt of General Computer Corp., 216-425-3241; or William L. Dupuy of Edward Howard & Co., 216-781-2400 for General Computer Corp./
 (GCCC) CO: General Computer Corp. ST: Ohio IN: CPR SU: ERN


CG -- CL006 -- 4581 12/20/91 17:38 EST
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Date:Dec 20, 1991
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