Milastar reports year end results; Anticipates strong improvement in fiscal 1997 operations.

PALM BEACH, Fla.--(BUSINESS WIRE)--Aug. 2, 1996--J. Russell Duncan, chairman of Milastar Corp. ("Milastar"), traded on the OTC Bulletin Board under the symbol "MILAA," today reported the company's results for the full fiscal year ended April 30, 1996.

Overall sales revenues for the fiscal 1997 year are expected to increase by about 20 percent with a significant increase in profitability.

Sales for the full fiscal 1996 year were $6,642,000, compared to $6,708,000 reported for the prior fiscal year ended April 30, 1995. The level of sales for the full year were achieved despite a temporary slack in the Midwest economy. That has completely turned around, and according to Duncan the pace of incoming orders has picked up and should continue throughout the new fiscal year.

The company for the full fiscal year ended April 30, 1996 experienced a net loss of $254,000 ($.09 per share). This was down dramatically from the $614,000 loss ($.22 per share) incurred in the previous fiscal year. Fiscal 1997 will include a major capital addition which will provide Milastar with significant technological and productivity superiority in the industry, and a program of intensified marketing activity to open new accounts over a wider geographical area is currently under way.

During the past two fiscal years, the company added almost $2 million to the property, plant and equipment accounts and expects a payback of that investment in two years' time.

The company's balance sheet is sound and under-leveraged. Current assets amounted to $1,566,000 at latest fiscal year end and represented 26 percent of total assets. The current ratio is 1.1 to 1 and the debt to equity ratio is 0.6 to 1.

Currently, there are 2,738,264 Milastar shares outstanding in the possession of over 5,000 shareholders domiciled in most states, which wide distribution supports the shares' liquidity.

Milastar's revenue stream flows primarily from providing metallurgical-related sub-contract services to a diversified list of customers located in the greater Midwest region. Specialized services include commercial heat treating, metallurgical engineering, brazing and surface finishing selectively applied to materials consigned by the customer.

Management is committed to the task of building Milastar into a much larger, more profitable enterprise in order to optimize shareholders' value. According to management, the economic environment is supportive for accomplishing its goals for the new fiscal year. -0-

                         MILASTAR CORP.

                                Fiscal Year      Fiscal Year
Income Statement              April 30, 1996   April 30, 1995

Net sales                       $6,642,000       $6,708,000
Cost of sales                    5,036,000        5,299,000
Gross margin                     1,606,000        1,409,000
Selling, G&A and other           1,810,000        1,904,000
Operating loss                    (204,000)        (495,000)
Other income (expense)             (48,000)        (117,000)
Net loss before taxes             (252,000)        (612,000)
Income tax expense                   2,000            2,000
Net loss after taxes              (254,000)        (614,000)
Net loss per common share             (.09)            (.22)

CONTACT: Milastar Corp., Palm Beach

J. Russell Duncan, Chairman, 561/833-8800

or

Ron Como & Associates Inc., New York 

212/227-3010