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THE FAILURE GROUP, INC. ANNOUNCES THIRD QUARTER RESULTS

 MENLO PARK, Calif., March 22 /PRNewswire/ -- The Failure Group, Inc. (NASDAQ: FAIL) today reported revenues of $15.988 million for its fiscal 1993 third quarter ended Feb. 26, 1993, representing a decrease of 6 percent compared to revenues of $17.030 million in the same quarter last year. Professional fee revenues of $13.591 million in the third quarter were 7 percent lower than professional fee revenues of $14.603 million in the same quarter last year. Net income of $870,000 for the third quarter decreased 16 percent compared to net income of $1.039 million in the same quarter last year. Net income per share for the quarter decreased to 11 cents per share compared to 13 cents per share in the same quarter last year.
 Year-to-date revenues in fiscal 1993 declined 10 percent to $48.451 million from $53.720 million last year, and professional fee revenues of $41.278 million declined 10 percent compared to $45.767 million last year. Year-to-date net income of $2.546 million decreased 28 percent compared to year-to-date net income of $3.523 million last year, and net income per share of 32 cents declined from 44 cents per share in the same period last year.
 Michael R. Gaulke, president, stated, "The revenue decline we experienced in recent quarters was arrested during the third quarter reflecting work from several large engagements for existing clients. We continue to maintain established expense controls which have produced the decline in operating expenses in recent quarters. In the months ahead, we will increase our efforts to expand our revenues."
 The Failure Group, Inc., through its principle operating subsidiary, Failure Analysis Associates, 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 nine domestic and five international offices and is headquartered in Menlo Park.
 THE FAILURE GROUP, INC. AND SUBSIDIARIES
 Condensed, Consolidated Statements of Income
 (In thousands, except per-share data)
 Quarters Ended 9 Months Ended
 2/28/92 2/26/93 2/28/92 2/26/93
 Revenues
 Professional fees $14,603 $13,591 $45,767 $41,278
 Equipment fees and billed expense 2,181 2,088 6,293 6,284
 Other revenue 246 309 1,660 889
 Total 17,030 15,988 53,720 48,451
 Operating expenses
 Profess. compensation & related exp. 8,371 7,724 25,984 23,596
 Other operating expenses 3,898 3,900 13,069 12,088
 General and administrative expenses 2,892 2,591 8,485 7,691
 Total 15,161 14,215 47,538 43,375
 Operating income 1,869 1,773 6,182 5,076
 Other expense 123 311 261 798
 Income before income taxes 1,746 1,462 5,921 4,278
 Provision for income taxes 707 592 2,398 1,732
 Net income 1,039 870 3,523 2,546
 Net income per share $.13 $.11 $.44 $.32
 Weighted avg. no. of common shares 8,017 7,951 8,017 7,940
 -0- 3/22/93
 /CONTACT: Josephine Minola of the Failure Group, 415-326-9400/
 (FAIL)


CO: The Failure Group ST: California IN: SU: ERN

CK-MA -- NY010 -- 8032 03/22/93 08:01 EST
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Date:Mar 22, 1993
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