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HARMON REPORTS PROFITABLE 1991 CORE OPERATIONS REMAIN STRONG

 HARMON REPORTS PROFITABLE 1991
 CORE OPERATIONS REMAIN STRONG
 BLUE SPRINGS, Mo., Jan. 31 /PRNewswire/ -- Harmon Industries Inc. (NASDAQ-NMS: HRMN) of Blue Springs, the nation's leading supplier of railroad signalling and communications equipment, reported a return to profitability in 1991.
 Sales from continuing operations for the year decreased more than 2 percent from $72.7 million in 1990 to $70.9 million for the year ended Dec. 31, 1991. Net earnings from continuing operations for 1991 were $2.9 million compared to $3.1 million in 1990. Net earnings, including discontinued operations, increased from a loss of $9.2 million or ($1.95) per share in 1990 to a profit of $823,000 or 16 cents per share in 1991.
 For the fourth quarter, sales from continuing operations were down from $18.8 million in the fourth quarter of 1990 to $18.4 million for the quarter ended Dec. 31, 1991. Earnings from continuing operations in the fourth quarter were $183,000 compared to $971,000 in 1990.
 Harmon's continuing operations appear less profitable because interest on debt generated from discontinued operations now must be reported in continuing operations, while in prior years these expenses were included in the discontinued operations results. "This presentation of interest expense disguises the fact that our core business generated nearly 12 percent more profit before taxes in 1991 than in 1990 even though we experienced roughly a 2 percent overall sales decline. Such an improvement is a testament to our continuous trimming of expenses and the profitability of our remaining operations," said Bjorn E. Olsson, president and chief operating officer of Harmon Industries.
 Olsson said the sluggish economy and decreased business in the signalling products line of Harmon contributed to the decreased fourth quarter sales figures even though systems bookings are at record levels. Also included in the fourth quarter results are the final expenses on operations discontinued.
 "Although we expect the prevailing economic conditions will continue to influence our operations during the first part of 1992," Olsson said, "we remain optimistic that Harmon will show significant improvements in the second half of this year."
 Harmon Industries is traded in the over-the-counter market and is quoted on the NASDAQ National Market System under the symbol HRMN. For further information, contact Charles M. Foudree, executive vice president - finance, Harmon Industries Inc., 1300 Jefferson Court, Blue Springs, MO 64015. The telephone number is 816-229-3345.
 HARMON INDUSTRIES INC.
 Consolidated Statements of Operations
 For Periods Ended Dec. 31, 1991 and 1990
 In thousands of dollars
 (Unaudited)
 Three Months Ended Twelve Months Ended
 Dec. 31, Dec. 31,
 1991 1990 1991 1990
 Net sales $18,377 $18,794 $70,934 $72,707
 Cost of sales 13,532 13,120 49,536 50,892
 Gross profit 4,845 5,674 21,398 21,815
 Selling, general and
 administrative
 expenses 3,544 3,657 13,550 14,427
 Amortization of cost
 in excess of fair value
 of net assets of
 subsidiary acquired 34 34 134 134
 Provision for merger of
 manufacturing facilities --- 83 --- 608
 Miscellaneous income
 (expense)-net (737) 62 (946) 9
 Operating income 530 1,962 6,768 6,655
 Interest expense 426 367 2,160 1,533
 Earnings from
 continuing operations
 before income taxes 104 1,595 4,608 5,122
 Income tax expense
 (benefit):
 Current (67) 997 1,916 2,602
 Deferred (12) (373) (228) (580)
 $(79) $624 $1,688 $2,022
 Earnings from
 continuing operations 183 971 2,920 3,100
 Discontinued operations
 (net of tax):
 Loss on operations --- (1,527) --- (5,066)
 Loss on disposal (650) (6,978) (2,492) (7,240)
 Earnings (loss) before
 extraordinary item (467) (7,534) 428 (9,206)
 Extraordinary item:
 Tax benefits from
 utilization of net
 operating loss
 carryforward (210) --- 395 ---
 Net earnings (loss) $(677) $(7,534) $823 $(9,206)
 Earnings (loss) per
 common share:
 Continuing operations $0.03 $0.20 $0.57 $0.65
 Discontinued operations (0.13) (1.78) (0.49) (2.60)
 Extraordinary item (0.04) 0.00 0.08 0.00
 Total earnings
 (loss) per common
 share $(0.14) $(1.58) $0.16 $(1.95)
 Weighted average
 shares 5,116,645 4,790,155 5,065,852 4,723,157
 -0- 1/31/92
 /CONTACT: Charles M. Foudree of Harmon Industries, 816-229-3345/
 (HRMN) CO: Harmon Industries Inc. ST: Missouri IN: SU: ERN


BB -- DV005 -- 5768 01/31/92 16:27 EST
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Date:Jan 31, 1992
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