Telepanel Systems Inc. Reports Results for the First Quarter Ended April 30, 1996 Operating Margins Improve, Loss Decreases.

TORONTO--(BUSINESS WIRE)--June 24, 1996--TELEPANEL SYSTEMS INC. (TSE:TLS NASDAQ:TLSIF) Telepanel Systems Inc., the leader in wireless electronic shelf pricing systems for retail stores, today announced results for the first quarter ended April 30, 1996.

The loss decreased 15 percent to $784,686 in the quarter from $919,304 in last year's first quarter. The decrease was primarily due to the improvement in operating margin, as manufacturing expenses were reduced to 85 percent of sales as compared to 124 percent in last year's first quarter. This improvement is a result of the new Millennium 2000 Series product introduction and the renewal of the IBM agreement last year. The decline in the loss is significant given that the amortization of debenture discount and debenture interest expenses totalling $178,571 in the quarter were not present in last year's first quarter. (All results are reported in Canadian dollars.)

The loss per share declined to $.05 based on an average of 16,577,280 shares outstanding in the latest period, down from $.06 on an average of 15,026,499 shares in last year's first quarter. Product sales of $730,849 were lower than last year's first quarter product sales of $1,193,916 primarily because the rapid rollout of systems for Edwards was underway in the first quarter last year.

Commenting on the results, Chris Skillen, President and CEO said, "We are encouraged by the increase in margins and the resulting decrease in the loss. The improved margins are confirmation of the benefits we had anticipated from the introduction of the Millennium 2000 Series of products and from the renewal and extension of the IBM agreement. We expect these accomplishments to continue to provide benefits for future periods.

"Our marketing efforts bore fruit in the first quarter, resulting in the signing of a remarketing agreement with Fleming Companies covering 50 stores. Our backlog is now approximately 100 stores and we are continuing with our aggressive sales campaign in North America. The European market for electronic shelf label technology is growing and we expect to address that opportunity in the near-term."

Telepanel has 78 installations with over one million shelf labels at premier supermarkets and warehouse chains in North America, including Edwards (Ahold), Loblaws, Roundy's, Sam's Club, A andP, Lucky, Reasor's, Grand Union, Waremart, and Wakefern. Telepanel products are sold and serviced through a remarketing alliance with IBM.

Telepanel, a Canadian company, is the leader in developing wireless electronic shelf pricing systems for retail stores. Telepanel display modules are placed on the edge of store shelves to show a product's price and other information. Prices are changed by a radio communications link to the stores' cash registers, to provide accurate and up-to- date pricing.

Each liquid crystal display module is an independently powered stand-alone two- way radio frequency device that attaches to the existing shelf edge in a store. The modules can display price, unit price, promotional and management information for use by the shopper and store staff. Communications to and from the modules are effected through a patented radio frequency technology utilizing Telepanel's proprietary software and transceiver network.

This technology ensures that the prices displayed on the shelf edge are the same as those in the check-out system. The Telepanel system is the preferred electronic shelf label product because of its RF technology, low cost, flexibility and reliability. -0-

                          Telepanel Systems Inc.
                     Statement of Operations Summary
                     -------------------------------
                            (Canadian Dollars)

                                        Three Months Ended
                                                April 30
                                           1996           1995
                                           ----           ----
Revenue:                                730,849      1,193,916
Loss                                    784,686        919,304
Loss per share:                             .05            .06
Avg. shares o/s                      16,577,280     15,026,499

                          Statement of Operations
                          -----------------------
                              (Canadian Dollars)

                                         Three Months Ended
                                                 April 30
                                           1996           1995
                                           ----           ----
Product sales                         $ 730,849    $ 1,193,916

Manufacturing                           617,569      1,476,011
S,G, and A                              577,787        482,693
R  and D                                103,610         95,620
Depreciation and amortn.                 76,082         57,562
Amortn. of debenture discount            95,278           -
Debenture interest                       83,293           -
Interest                                 16,287         44,580

Interest earned                          54,371         43,246

Loss                                    784,686        919,304

Loss per share                              .05            .06
Avg. shares o/s                      16,577,280     15,026,499

CONTACT: Telepanel Systems Inc. (In Canada)

Chris Skillen, 905/477-7877

or

Straus Corporate Communications (In the US)

Irving Straus, 212/768-2477