Monarch Releases Year-end 1997 Results.

DAYTON, Ohio--(BUSINESS WIRE)--March 12, 1998--The Monarch Machine Tool Company (NYSE:MMO) reported a loss of $4.2 million ($1.12 per basic and diluted share) for the year ended December 31, 1997 on sales of $107.1 million. This compares to a 1996 loss of $5.5 million ($1.47 per share) on sales of $115.5 million. The results for 1997 were substantially impacted by the Company's program to dispose of unprofitable businesses, to restructure its ongoing operations for improved profitability, and to generate capital resources for the future development of its ongoing businesses. The Company's ongoing businesses contributed earnings before income tax of $843,000 in 1997 compared to a loss before income taxes of $478,000 in 1996.

The 1997 net loss of $4.2 million included $1.5 million of charges related to the sale of the assets of the lathe business (the Sidney division), including $740,000 recorded in the fourth quarter related to a purchase price adjustment, a $1.3 million reserve related to the Company's decision in late 1997 to close its German businesses and a $1.5 million impairment against the value of the Sidney division's real estate, which is now held for sale. Results for 1996 included a loss of $7.5 million from an inventory write-down, primarily at the lathe division, and were favorably impacted by a gain of $3.9 million from the sale of excess foreign properties and income of $2.5 million from LIFO liquidations.

Sales in 1997 were affected by the July 1997 disposal of the Company's lathe business, which contributed $10.6 million to sales in 1997 compared to $23.8 million in 1996. In addition, lower sales were realized from the Company's German operations in 1997 ($5.1 million) compared to 1996 ($13.3 million). This was due in part to the Company's decision in 1997 to sell or close all of its German businesses during 1998. Excluding the above amounts, sales from the Company's ongoing operations in the United States and in the United Kingdom increased to $91.4 million in 1997 from $78.4 million in 1996.

For the fourth quarter ended December 31, 1997, the Company reported a net loss of $4.5 million ($1.20 per share) on sales of $26.1 million compared to a fourth quarter 1996 loss of $4.7 million ($1.25 per share) on sales of $38.6 million. Fourth quarter results in 1997 include charges of $740,000 related to the lathe business sale, $1.1 million related to the disposition of the German businesses and $1.5 million for the reduction in value of the Sidney real estate.

The Company's backlog for its ongoing businesses at December 31, 1997 was $40 million compared to a beginning of year backlog of $49 million. The Company recorded $82 million of orders for its ongoing businesses during 1997. The recent financial instability in Southeast Asia had a negative impact on orders during the fourth quarter of 1997 and into early 1998, primarily at the U.S. coil processing equipment division. However, the Company continues to receive a high level of requests for proposals and anticipates adding additional orders to its backlog during 1998.

Richard E. Clemens, President & CEO, commented, "The losses incurred by the Company during 1997 were from businesses in which the Company will not be involved in the future. Our remaining coil processing equipment and vertical machining center businesses have historically been profitable and we foresee them continuing their profitability into 1998 and beyond. After closing or disposing of our non-profitable businesses, we can now focus our attention on cost containment and increasing market penetration in the remaining core businesses. During 1997, the Company repaid a majority of its indebtedness in part from the proceeds of the sale of our lathe division and enters 1998 in a strong financial position. We believe that the difficult actions necessary to restructure Monarch have been taken. In 1998, our focus will be to establish continuous improvement initiatives and concentrate on customer satisfaction and operational excellence issues, which will further enhance profitability into the future."

The Monarch Machine Tool Company engineers and manufactures high quality metal coil processing equipment, vertical machining centers and coating and laminating equipment in the United States and the United Kingdom.

For further information contact Richard E. Clemens, CEO, or Karl Frydryk, CFO at [phone]. -0-

A summary of the financial results follows (amounts in thousands,
except per share data):

                                            For the Year Ended
                                                December 31,
                                          ______________________

                                          1997              1996
                                          ____              ____

Net Sales                            $ 107,116         $ 115,528
(Loss) Before Income Tax             $  (5,305)        $  (7,891)
Income Tax Benefit                       1,103             2,393
                                     __________        __________

Net (Loss)                           $  (4,202)        $  (5,498)
                                     __________        __________
                                     __________        __________

Net (Loss) per Common Share          $   (1.12)        $   (1.47)
                                     __________        __________
                                     __________        __________

Average Common Shares Outstanding        3,758             3,745
                                     __________        __________
                                     __________        __________



                                           For the Quarter Ended
                                                December 31,
                                          ______________________

                                          1997              1996
                                          ____              ____

Net Sales                            $  26,050         $  38,631
(Loss) Before Income Tax             $  (5,517)        $  (7,117)
Income Tax Benefit                       1,030             2,441
                                     __________        __________

Net (Loss)                           $  (4,487)        $  (4,676)
                                     __________        __________
                                     __________        __________

Net (Loss) per Common Share          $   (1.20)        $   (1.25)
                                     __________        __________
                                     __________        __________

Average Common Shares Outstanding        3,762             3,745
                                     __________        __________
                                     __________        __________

CONTACT: The Monarch Machine Tool Company, Dayton

Karl Frydryk, 937/910-9300