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THE FAILURE GROUP, INC., ANNOUNCES 1994 FIRST QUARTER RESULTS

 MENLO PARK, Calif., Sept. 20 /PRNewswire/ -- The Failure Group, Inc. (NASDAQ-NMS: FAIL), today reported revenues of $16.3 million for its fiscal 1994 first quarter ended Aug. 27, 1993, representing a decrease of 1 percent compared to revenues of $16.5 million in the same quarter last year. Professional fee revenues of $13.9 million in the first quarter were 2 percent lower than professional fee revenues of $14.2 million in the first quarter last year. Net income of $6,000 was essentially break-even compared to net income of $873,000 in the same quarter last year. The company reported a break-even level of net income per share for the current quarter compared to net income per share of 11 cents in the same quarter of last year.
 The results for the first quarter of fiscal 1994 include the operating results of PLG, Inc., which the company acquired effective May 31, 1993. PLG, Inc., reported total revenues of $1.9 million, including $1.8 million of professional fees, and net income of $76,000. Had the acquisition of PLG, Inc., not been made, the company would have reported total revenues of $14.4 million, including $12.1 million of professional fees, and a net loss of $70,000, representing a net loss per share of 1 cent.
 Michael R. Gaulke, president, stated: "During the quarter we completed work on several large engagements which have not been fully replaced by new projects, and we remain cautious regarding the timing of any significant increase in revenues. Earlier this month, we reduced our administrative staff by 14 percent in line with our previously announced intentions to streamline our administrative procedures and reduce the related expenses. Also, we reduced the professional staff by 7 percent, recognizing what we hope is a temporary decline in the demand for our services."
 Gaulke continued, "In a separate, Failure Analysis Associates, Inc., our principal subsidiary, is today announcing its intention to form a strategic alliance with Arkwright Mutual Insurance Company to enhance the growth and profit of both firms."
 The Failure Group, Inc., through its operating subsidiaries, Failure Analysis Associates, Inc., and PLG, Inc., is a leading independent consulting firm devoted primarily to the investigation, analysis and prevention of failures of an engineering or scientific nature. Founded in 1967, the company operates 12 domestic and five international offices and is headquartered in Menlo Park.
 THE FAILURE GROUP, INC., AND SUBSIDIARIES
 Condensed Consolidated Statements of Income
 For the Quarters Ended Aug. 27, 1993, and Aug. 28, 1992
 (In thousands, except per share data)
 Aug. 27, Aug. 28,
 Quarters Ended 1993 1992
 Revenues:
 Professional fees $13,869 $14,187
 Equipment fees and billed
 expenses 2,115 2,052
 Other revenue 318 307
 Total 16,302 16,546
 Operating expenses:
 Professional compensation
 and related expenses 8,722 8,307
 Other operating expenses 4,231 4,059
 General and administrative
 expenses 3,063 2,497
 Total 16,016 14,863
 Operating income 286 1,683
 Other expense 276 216
 Income before income taxes 10 1,467
 Provision for income taxes 4 594
 Net income $6 $873
 Net income per share $0.00 $0.11
 Weighted average number
 of common shares 7,813 7,940
 -0- 9/20/92
 /CONTACT: Michael R. Gaulke, president of The Failure Group, Inc., 415-326-9400/
 (FAIL)


CO: The Failure Group, Inc. ST: California IN: SU: ERN

SM-TW -- NY010 -- 3465 09/20/93 08:26 EDT
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Publication:PR Newswire
Date:Sep 20, 1993
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