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TELEMATICS INTERNATIONAL DOUBLES PROFITS YEAR-TO-DATE 1992

 TELEMATICS INTERNATIONAL DOUBLES PROFITS YEAR-TO-DATE 1992
 FORT LAUDERDALE, Fla., Oct. 21 /PRNewswire/ -- Telematics International, Inc. (NASDAQ: TMAX), announced today that net income for the third quarter ended Sept. 30, 1992 was $1,879,000 or $.11 per share, an increase of 336.0 percent from $431,000 or $.03 per share for the comparable period in 1991. Revenues for the third quarter of 1992 were $16,885,000 up 12.3 percent or $1,847,000 over revenues of $15,038,000 for the corresponding 1991 period.
 Income from operations increased $1,378,000 or 184.2 percent to $2,126,000 in the third quarter of 1992 as compared to $748,000 in the third quarter of 1991. This improvement was primarily due to a $1,522,000 or 17.3 percent increase in the gross profit margin due to higher revenue levels, reduced manufacturing costs and service spending, offset slightly by a $144,000 or 1.8 percent increase in operating expenses.
 For the first nine months of 1992, Telematics reported net income of $4,740,000 or $.28 per share, a 125.5 percent increase from $2,102,000 or $.12 per share for the comparable 1991 period. Revenues for the current nine month period were $48,728,000 up 4.2 percent or $1,949,000 over revenues of $46,779,000 in the corresponding 1991 period. The results for the nine months ended Sept. 30, 1992 include an extraordinary tax credit of $976,000 or $.06 per share.
 Income before income tax provision and extraordinary credit increased $2,574,000 or 90.8 percent to $5,408,000 in the nine month period ended Sept. 30, 1992 as compared to $2,834,000 in the same 1991 period. This improvement was largely attributable to a $1,028,000 increase in the gross profit margin due to increased revenue levels, a $863,000 reduction in operating expenses, and a $683,000 increase in other income due primarily to the elimination of equity investment losses and an increase in interest income.
 William A. Hightower, president and chief executive officer, stated, "We are pleased to report that revenue and net income continue to improve over last year despite difficult global economic conditions. Foreign exchange losses of $269,000 and $134,000 for the third quarter and year to date 1992, respectively, were realized, in part, due to foreign subsidiary assets held in local currencies which weakened against the U.S. dollar. The company continues to remain debt free with a strengthening financial position from Dec. 31, 1991 as reflected by cash up $3,954,000 or 28.0 percent to $18,076,000, accounts receivable down $1,427,000 or 9.0 percent, and working capital up $3,121,000 or 10.5 percent to $32,755,000 through sustained expense and asset management."
 Founded in 1982, Telematics designs, manufactures, sells and supports a complete line of wide area networking products designed for voice and data communications applications and networks worldwide. 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, Fla., has approximately 360 employees worldwide with facilities in five U.S. locations, Basingstoke, England, Frankfurt, Germany, and Paris.
 TELEMATICS INTERNATIONAL, INC.
 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 (Unaudited)
 (In thousands, except per share data)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30, Sept. 30, Sept. 30,
 1992 1991 1992 1991(A)
 Sales:
 Systems $ 14,290 $ 12,834 $ 41,205 $ 39,917
 Service 2,595 2,204 7,523 6,862
 16,885 15,038 48,728 46,779
 Operating costs and expenses:
 Systems cost of sales 4,699 4,574 14,153 13,918
 Service cost of sales 1,862 1,662 5,380 4,694
 Product development 2,866 2,878 8,385 9,131
 Sales and marketing 3,558 3,865 10,780 11,429
 General and administrative 1,774 1,311 5,087 4,555
 14,759 14,290 43,785 43,727
 Income from operations 2,126 748 4,943 3,052
 Other income (expense):
 Loss from equity investment -- (246) -- (683)
 Interest income 142 200 425 673
 Interest expense -- (6) (2) (74)
 Foreign exchange gain (loss) (269) 153 (134) (238)
 Other 195 20 176 104
 68 121 465 (218)
 Income before income tax
 provision and
 extraordinary credit 2,194 869 5,408 2,834
 Provision for income taxes 344 438 1,644 732
 Income before
 extraordinary credit 1,850 431 3,764 2,102
 Extraordinary credit --
 income tax benefit resulting
 from utilization of net
 operating loss carryforwards 29 -- 976 --
 Net income $ 1,879 $ 431 $ 4,740 $ 2,102
 Earnings per share:
 Income before
 extraordinary credit $ .11 $ .03 $ .22 $ .12
 Extraordinary credit -- -- .06 --
 Net income $ .11 $ .03 $ .28 $ .12
 Weighted average shares
 outstanding 16,840 17,145 17,021 17,048
 (A) -- Results for nine months ended Sept. 30, 1991 reflect the elimination of extraordinary credits (income tax benefits resulting from utilization of net operating loss carryforwards) of $546,000 or $.03 per share previously recorded based on projected taxable income for the full year and subsequently revised as the result of recording a loss for the 1991 year.
 CONSOLIDATED CONDENSED BALANCE SHEETS
 (In thousands)
 Sept. 30, Dec. 31,
 1992 1991
 (Unaudited) (Audited)
 ASSETS
 Current assets:
 Cash and cash equivalents $18,076 $14,122
 Accounts receivable, net 14,350 15,777
 Inventories 7,992 7,767
 Prepaid expenses and other 1,365 1,596
 Total current assets 41,783 39,262
 Plant, equipment and leasehold
 improvements, net 3,465 3,958
 Software production costs, net 6,998 6,373
 Other assets 1,606 1,634
 $53,852 $51,227
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Accounts payable $ 1,792 $ 2,973
 Accrued compensation 2,313 1,891
 Accrued expenses and other 4,330 4,415
 Income taxes payable 593 349
 Total current liabilities 9,028 9,628
 Shareholders' equity
 Preferred stock, $1.00 par value;
 authorized 5,000,000 shares,
 issued none -- --
 Common stock, $.01 par value;
 authorized 24,000,000 shares,
 issued 17,106,724 at Sept. 30, 1992
 and 17,099,524 at Dec. 31, 1991 171 171
 Capital in excess of par value 51,465 51,465
 Retained earnings (deficit) (5,297) (10,037)
 46,339 41,599
 Less -- Treasury stock of 534,000
 shares at cost 1,515 --
 Total shareholders' equity 44,824 41,599
 $53,852 $51,227
 -0- 10/21/92
 /CONTACT: Miriam K. Frazer, chief financial officer and corporate secretary of Telematics International, 305-772-3070/
 (TMAX) CO: Telematics International, Inc. ST: Florida IN: CPR SU: ERN


AW-JB -- FL001 -- 2669 10/21/92 08:28 EDT
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Date:Oct 21, 1992
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