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CHARTER POWER SYSTEMS REPORTS TO SHAREHOLDERS

 CHARTER POWER SYSTEMS REPORTS TO SHAREHOLDERS
 PLYMOUTH MEETING, Pa., Oct. 13 /PRNewswire/ -- Charter Power


Systems, Inc. (AMEX: CHP), in its second quarter report to shareholders, states that industry-wide sales outlook for the last six months of the current 1993 fiscal year is very uncertain and cautious in telecommunications, UPS and government-related business activity.
 While Charter Power's motive power sales are expected to continue to improve moderately, the company stated that it expects sales of standby power systems, which account for approximately 56 percent of sales, to continue to show weak year-to-year comparisons. The poor economic climate has also resulted in intense pricing pressure in the marketplace. This, combined with higher prices for lead, a key raw material, and costs associated with the launch of new products, will continue to constrain the company's operating income in the second half of this fiscal year.
 There is also a high probability that, due to delays in the construction of facilities for the Puerto Rico Electric Power Authority by independent contractors, a significant portion of Charter Power's $4.1 million contract to deliver a spinning reserve battery system will be delayed to the first fiscal quarter of 1994 from the fourth quarter of fiscal 1993.
 These factors are expected to result in a reduction of Charter Power's operating income from its existing operations for the second half of fiscal 1993 compared to the amount reported in the first half of the year. In addition, certain one-time costs and charges expected to be booked in the second half, would have a substantial negative impact on fiscal 1993, resulting in a net loss for the second half and possibly for the year. These one-time charges include costs and charges to be incurred in connection with the Ratelco acquisition and related strategic power electronics actions, increased reserves expected to be taken for potential exposure in connection with certain pricing claims recently asserted by the U.S. General Services Administration relating to a battery contract with the company that was in effect from 1983 to 1987, and the possible adoption of SFAS 106 (Employer's Accounting for Post Retirement Benefits Other than Pensions), as disclosed in our most recent annual report.
 The company also stated that unless there is a meaningful upturn in the North American economy in the coming year, it would not anticipate that income from its ongoing operations 1994, excluding the possible impact of acquisitions, would significantly differ from the current fiscal year, with some improvement from the Puerto Rico Power Authority contract and new products.
 -0- 10/13/92
 /CONTACT: Donald L. Nevins, Jr., (financial), 215-834-7334, or Yanis Bibelnieks (shareholders), 212-949-2295, both for Charter Power Systems/
 (CHP) CO: Charter Power Systems, Inc. ST: Pennsylvania IN: SU:


LD-PS -- NY077 -- 9533 10/13/92 16:56 EDT
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Publication:PR Newswire
Date:Oct 13, 1992
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