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TELEMATICS INTERNATIONAL ANNOUNCES RECORD REVENUES AND PROFITS

 FORT LAUDERDALE, Fla., Oct. 19 /PRNewswire/ -- Telematics International, Inc. (NASDAQ: TMAX) announced today record revenues of $20,717,000 for the third quarter of 1993, up $3,832,000 or 22.7 percent vs. $16,885,000 for the comparable 1992 period. Third quarter 1993 net income was $2,541,000 or $.14 per share compared to $1,879,000 or $.11 per share in the same period in 1992.
 Income from operations for the third quarter of 1993 was $3,626,000, up $1,500,000 or 70.6 percent over $2,126,000 in the corresponding 1992 period. This is attributable to a $2,739,000 increase in the gross profit margin, primarily due to increased revenue levels, which was partially offset by a $1,239,000 increase in operating expenses to $9,437,000 compared to $8,198,000 in the third quarter of 1992, due primarily to increased personnel related expenses, professional fees and advertising expense.
 For the nine months ended Sept. 30, 1993, revenues were $56,069,000, up $7,341,000 or 15.1 percent compared to $48,728,000 for the corresponding 1992 period. Income from operations amounted to $7,600,000 for the nine months ended Sept. 30, 1993, up $2,657,000 or 53.8 percent from $4,943,000 in the corresponding 1992 period. Improvement in the first nine months of 1993 is due to a $5,587,000 or 19.1 percent increase in the gross profit margin largely due to higher revenue levels. Such gain was partially offset by a $2,930,000 or 12.1 percent increase in operating expenses to $27,182,000 compared to $24,252,000 in the same period in 1992 due primarily to increased personnel related expenses and professional fees.
 The company achieved net income of $6,270,000 or $.35 per share for the ninth month period ended Sept. 30, 1993, a $1,530,000 or 32.3 percent increase from $4,740,000 or $.28 per share in the comparable 1992 period. The results for the first nine months of 1992 included an extraordinary tax credit of $976,000 or $.06 per share, while the results for the current year include an $887,000 or $.05 per share increase in net income which represents the cumulative effect if a change in the method of accounting for income taxes as required by FAS 109, "Accounting for Income Taxes."
 Telematics designs, manufactures and markets computer systems and software products for voice and data communication applications and networks. It provides a full range of frame realy products under the NFX brand name, including frame relay switches, frame relay concentrators and frame relay access devices called FRADs. Telematics' NET25, SmartNet and Digital Wideband Networks include a complete line of wide area networking products designed specifically for voice and data communications applications and networks. This includes a full range of programmable packet switching systems, frame relay systems, access communications processors and T1/E1 networking multiplexers. Telematics, headquartered in Fort Lauderdale, has approximately 390 employees worldwide with facilities in five U.S. locations, Basingstoke, England, Frankfurt, Germany and Paris.
 TELEMATIN?TERNATIONAL, INC.
 CONSOLIDATED STATEMENT OF INCOME
 (In thousands, except per share data)
 (Unaudited)
 Three Months Ended Nine Months Ended
 Sept. 30 Sept.30 Sept. 30 Sept. 30
 1993 1992 1993 1992
 Sales:
 Systems $ 17,723 $ 14,290 $ 47,654 $ 41,205
 Service 2,994 2,595 8,415 7,523
 20,717 16,885 56,069 48,728
 Operating costs and expenses:
 Systems cost of sales 5,656 4,699 15,496 14,153
 Service cost of sales 1,998 1,862 5,791 5,380
 Product development 3,068 2,866 9,209 8,385
 Sales and marketing 4,150 3,558 11,985 10,780
 General and administrative 2,219 1,774 5,988 5,087
 17,091 14,759 48,469 43,785
 Income from operations 3,626 2,126 7,600 4,943
 Other income (expense):
 Interest income, net 158 142 480 423
 Foreign exchange
 gain (loss) 6 (269) 34 (134)
 Other (39) 195 (245) 176
 125 68 269 465
 Income before income taxes 3,751 2,194 7,869 5,408
 Provision for income taxes 1,210 344 2,486 1,644
 Income before extraordinary
 credit and cumulative effect
 of change in accounting
 method 2,541 1,850 5,383 3,764
 Extraordinary tax credit
 resulting from utilization
 of loss carryforwards --- 29 --- 976
 Cumulative effect of change
 in accounting method --- --- 887 ---
 Net income $ 2,541 $ 1,879 $ 6,270 $ 4,740
 Earnings per share:
 Income before
 extraordinary credit and
 cumulative effect of change
 in accounting method $ .14 $ .11 $ .30 $ .22
 Extraordinary credit --- --- --- .06
 Cumulaltive effect of change
 in acconting method $ --- $ --- $ .05 $ ---
 Net income $ .14 $ .11 $ .35 $ .28
 Weighted average shares
 outstanding 17,979 16,840 17,765 17,021
 CONSOLIDATED BALANCE SHEETS
 (In thousands)
 Sept. 30, Dec. 31,
 1993 1992
 (Unaudited) (Audited)
 ASSETS
 Current assets:
 Cash and cash equivalents $ 20,728 $ 19,414
 Accounts receivable, net 19,768 15,477
 Inventories 8,363 6,329
 Refundable income taxes 292 330
 Deferred income taxes 368 ---
 Prepaid expenses and other 1,211 1,051
 Total current assets 50,730 42,601
 Equipment and leasehold
 improvements, net 4,630 3,991
 Software production costs, net 7,387 7,076
 Other assets 1,091 1,584
 $ 64,610 $ 55,252
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Accounts payable $ 1,497 $ 2,048
 Accrued compensation 2,750 2,075
 Accrued expenses and other 3,752 2,587
 Income taxes payable 783 35
 Deferred income taxes 53 398
 Total current liabilities 8,835 7,143
 Long-term deferred facility costs 1,146 992
 Total liabilities 9,981 8,135
 Shareholders' equity:
 Preferred stock, $1.00 par value;
 authorized 5 million shares,
 issued none --- ---
 Common stock, $.01 par value;
 authorized 24 million shares,
 issued 17,465,884 at Sept, 30,
 1993 and 17,181,434 at
 Dec. 31, 1992 175 172
 Capital in excess of par value 53,042 51,803
 Treasury stock at cost,
 559,000 shares (1,587) (1,587)
 Retained earnings (deficit) 2,999 (3,271)
 Total shareholders' equity 54,629 47,117
 $ 64,610 $ 55,252
 -0- 10/19/93
 /CONTACT: Richard P. Smith, acting chief financial officer of Telematics International, 305-772-3070/
 (TMAX)


CO: Telematics International, Inc. ST: Florida IN: CPR SU: ERN

RK-AW -- FL001 -- 3741 10/19/93 08:22 EDT
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Date:Oct 19, 1993
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