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TOROTEL EXPECTS FOURTH QUARTER LOSS AS IT INCREASES PENETRATION OF COMMERCIAL MARKETS

 KANSAS CITY, Mo., April 16 /PRNewswire/ -- Torotel, Inc. (AMEX: TTL), a leading manufacturer of magnetic components, today announced it expects a loss for the fourth quarter ending April 30, 1993, as the company increases penetration of commercial product markets.
 "In presenting third quarter results last month, we mentioned fourth quarter sales were expected to be 40 percent lower than a year ago and Torotel would break even at best," said Alfred F. Marsh, president and chief executive officer. "While we could have instituted further cost controls to stay at breakeven for the quarter, management elected to remain fully staffed. This will allow us to serve the greater amount of commercial business expected in the coming fiscal year. We see it as a $200,000 to $300,000 investment for further long-term growth in a diversified market. Although this will mean a fourth quarter loss, Torotel's cash flow is strong and should carry us through the transition period."
 Over 95 percent of Torotel's sales bookings traditionally came from defense electronics. In the past year, the company began increasing efforts to reach commercial and industrial markets for its magnetics, found in such end-use products as computers and telecommunications equipment. These products require a large number of switched mode inductors to control electric current and voltage. As a result, Torotel's commercial sales bookings for fiscal 1994 could increase to approximately 30 percent from about 5 percent in 1993.
 "The commercial niche Torotel could potentially serve is at least $500 million in annual sales. We are reaching this market through an aggressive effort by our independent sale representatives and in-house technical support. Currently, 80 percent of our sales and marketing activity is related to the commercial market. We already have added 30 new commercial customers over the last nine months. We are very excited about our progress to date and can promise shareholders they will see a higher contribution from the commercial market in fiscal 1994," Marsh concluded.
 For the first nine months of fiscal 1993, Torotel reported sales of $7.0 million and net earnings of $474,000, or 17 cents per share. In fiscal 1992, sales reached $10.3 million, with net earnings at $901,000, or 32 cents per share. For last year's fourth quarter, sales were $2.5 million and net earnings $228,000, or 8 cents per share.
 Torotel, Inc., specializes in the design and high-volume manufacture of a broad line of precision magnetic components used in military and industrial electronic systems. These components, which include transformers, chokes and toroidal coils, are sold to original equipment manufacturers for use in such programs as avionic equipment, marine communication and navigation, telecommunications and weapons fire control systems. The company has a base of more than 400 customers.
 Further information on Torotel by fax is available by dialing 1-800-PRO-INFO, ext. 155.
 -0- 4/16/93
 /CONTACT: Al Marsh, president of Torotel, 816-761-6314; or Lynne Franklin, 312-266-7800, or Regina Ryan, 212-661-8030, both of the Financial Relations Board, for Torotel/
 (TTL)


CO: Torotel, Inc. ST: Missouri IN: SU: ERP

GK -- NY034 -- 6720 04/16/93 11:35 EDT
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Publication:PR Newswire
Date:Apr 16, 1993
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