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CARDIS ACHIEVES OPERATING PROFIT IN NINE-MONTH 1992 PERIOD

 CARDIS ACHIEVES OPERATING PROFIT IN NINE-MONTH 1992 PERIOD
 BUENA PARK, Calif., Feb. 28 /PRNewswire/ -- Cardis Corp. (OTC) reduced its loss before extraordinary item in both the third quarter and nine-month periods and despite lower sales achieved operating profits for nine months ended Jan. 31, 1992 compared to a year-earlier operating loss. The company's improved performance over the prior year was attributable to cost reduction programs and the recently completed major recapitalization that reduced Cardis' outstanding debt and interest expense.
 For the third quarter, revenues were $17.0 million compared with $19.0 million a year ago. The loss beforn? extraordinary item -- the debt restructuring and reorganization -- was $937,000, or $.42 per share, compared with a net loss of $1,668,000, or $3.16 per share, in the year-earlier quarter.
 For the nine months ended Jan. 31, 1992, sales were $55.4 million vs. $61.6 million a year ago. The company incurred a loss before extraordinary item of $1.8 million, or $.81 per share, compared with a net loss of $3.7 million, or $7.11 per share, in the same period last year. The effect of the recapitalization in the 1992 nine months period made net income $19.6 million, or $8.80 per share.
 Prior year periods have been restated to give effect to the 1-for-20 reverse stock split effective concurrently with the recapitalization approved by shareholders in October 1991.
 The recapitalization involved the exchange of Cardis' common stock for $20 million of bank debt and $724,000 in interest owed on that debt; the extension of term and interest relief on approximately $8.1 million of other indebtedness in exchange for stock; conversion of the company's mandatory redeemable Class B preferred stock into shares of common stock; the reverse stock split; and an increase in the number of options available for grant to Cardis officers and directors.
 "Achieving operating profits on lower volume is tangible proof of how Cardis has responded effectively to the current environment, and the inherent strength of our organization," stated President Kenneth Walker. "Although we are benefitting from efficiencies and the positive effects of the recapitalization, we remain concerned about the impact of any protracted weakness in our market. With an eye to the long term, we are continuing to explore the possibilities of strategic alliances that might further enhance shareholder value."
 Cardis Corp. currently operates nine warehouse distribution centers and 21 retail stores located primarily in California.
 CARDIS CORP. AND SUBSIDIARIES
 Condensed Consolidated Statements of Operations
 (Dollars in thousands except per share data)
 (Unaudited)
 Three Months Nine Months
 Ended Jan. 31, Ended Jan. 31,
 1992 1991 1992 1991
 Net sales $16,969 $18,975 $55,387 $61,607
 Cost of sales 11,523 12,999 37,890 42,338
 Gross profit 5,446 5,976 17,497 19,269
 Selling, general and
 administrative
 expenses 5,768 6,407 17,382 19,349
 Operating profit
 (loss) (322) (431) 115 (80)
 Interest expense 615 1,237 1,931 3,632
 Loss before
 extraordinary item (937) (1,668) (1,816) (3,712)
 Extraordinary item-debt
 restructuring and
 reorganization -- -- 21,459 --
 Net income (loss) ($937) ($1,668) $19,643 ($3,712)
 Loss Per Common Share (a):
 Loss before
 extraordinary item ($.42) ($3.16) ($.81) ($7.11)
 Extraordinary item -- -- 9.61 --
 Net income (loss) ($.42) ($3.16) $8.80 ($7.11)
 Weighted average number
 of common shares used
 in computing earnings
 (loss) per
 share(a) 2,231,616 547,587 2,232,100 547,587
 (a) After 1-for-20 reverse split
 -0- 2/28/92
 /CONTACT: John L. Olson of Cardis, 213-227-4855; or Craig A. Parsons of Rifkind Pondel & Parsons, 310-207-9300, for Cardis/ CO: Cardis Corp. ST: California IN: REA SU: ERN


AL -- LA013 -- 3710 02/28/92 12:17 EST
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Publication:PR Newswire
Date:Feb 28, 1992
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