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CSI REPORTS FIRST QUARTER RESULTS

 HECTOR, Minn., May 4 /PRNewswire/ -- Communications Systems, Inc. (NASDAQ-NMS: CSII) (CSI) today reported net income of $1,216,000 or $.14 per share in the first quarter of 1993, virtually unchanged from $1,205,000 or $.14 per share last year before a one-time tax benefit related to the adoption of FASB No. 109, a new income tax accounting method. After a tax benefit of $481,000 or $.05 per share, net income for the first quarter of 1992 came to $1,685,000 or $.19 per share.
 Net sales totaled $12,694,000 for the first quarter of 1993, down from $13,532,000 a year ago.
 All per share data have been restated to reflect the two-for-one stock split declared in March 1993.
 Curtis A. Sampson, CSI's president and chief executive officer, said the moderately lower sales and flat earnings before the change in accounting principle were substantially in line with the company's previously reported outlook for the first quarter of 1993. He said the ability to post these earnings despite lower revenues reflects the underlying strength of CSI's operations.
 Sampson said the domestic telephone apparatus business posted higher sales and improved operating income in the first quarter. This performance, he said, was offset by the anticipated weakness at the international apparatus and contract manufacturing operations. However, Austin Taylor Communications, Ltd. in Wales, the company's international unit, and Zercom Corporation, the contract manufacturing subsidiary, were both profitable in this year's first quarter.
 The increased profitability of the domestic apparatus business resulted in part from enhanced efficiencies and savings related to several plant consolidations that occurred last fall. These and related actions resulted in a 9 percent reduction in selling, general and administrative expenses in the first quarter.
 Austin Taylor's lower sales volume reflected the continuation of the weak European economy. Zercom recorded reduced sales with its largest customer, but this unit's profitability represented solid progress in comparison to the second half of 1992, when Zercom experienced certain operating difficulties.
 Sampson said CSI's overall performance remains substantially on plan and that the company anticipates record sales and earnings for all of 1993. He said the domestic apparatus business will benefit from a $6.3 million order scheduled for shipment in the second and third quarters. He said this is the largest order in the company's history. Sampson added that Austin Taylor and Zercom are also expected to report improving results as the year progresses.
 CSI is a leading manufacturer of modular connecting and premise wiring devices for the voice and data communications markets. The company's common stock is traded on the National Market System under the NASDAQ symbol CSII.
 COMMUNICATIONS SYSTEMS, INC.
 CONSOLIDATED SUMMARY OF EARNINGS
 Three Months Ended
 3/31/93 3/31/92
 Revenues $12,694,270 $13,532,181
 Operating income 1,325,723 1,551,661
 Income before income taxes 1,455,952 1,654,300
 Income taxes 240,000 450,000
 Income before change in accounting principle 1,215,952 1,204,300
 Cumulative effect of change in accounting
 for income taxes -- 481,000
 Net income $1,215,952 $1,685,300
 Net income per share:
 Before change in accounting principle $.14 $.14
 Cumulative effect of change in
 accounting principle -- .05
 -- $.14 $.19
 Average shares outstanding 8,944,000 8,885,000
 -0- 5/4/93
 /CONTACT: Curtis A. Sampson, CEO, or Paul N. Hanson, CFO, 612-848-6231, both of CSI/
 (CSII)


CO: Communications Systems, Inc. ST: Minnesota IN: TLS SU: ERN

KH -- MN003 -- 4219 05/04/93 10:06 EDT
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Publication:PR Newswire
Date:May 4, 1993
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