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IN-STORE ADVERTISING DISCLOSES FINANCIAL IRREGULARITIES IN 1989 AND 1990, REPORTS 1992 YEAR-END RESULTS

 GREENWICH, Conn., June 11 /PRNewswire/ -- In-Store Advertising, Inc. (NASDAQ: ISAN) today reported the results of an investigation into certain financial irregularities in its historical financial statements, relating primarily to its 1989 and 1990 fiscal years. The Company also announced unaudited results for its fiscal year ended Dec. 31, 1992.
 As previously reported, in March 1993, the Company discovered facts that raised questions about historical financial statements of the Company for 1989 and 1990. Members of the Company's Board of Directors retained the accounting firm of Deloitte & Touche to investigate these questions. Deloitte & Touche has concluded that, as a result of financial irregularities at the Company in the third and fourth quarters of 1989 and the first and second quarters of 1990, revenue was recognized by the Company before it was earned during each of those quarters. As a result, revenues and earnings were materially overstated in the four quarters preceding the Company's initial public offering in July 1990, and were understated by an equal amount in the following three quarters. The net overstatement of revenues for the fourth quarter of 1989 and in each of the first two quarters of 1990 was in each case greater than $1,000,000, but in no quarter was greater than $2,000,000.
 Although the Company's year-end financial statements for 1989 and 1990 contained material misstatements with respect to earnings and revenues, the overall financial results of the Company for the three- year period from 1989 through 1991 were not, in the aggregate, affected. Based on the study by Deloitte & Touche, the Company believes that the aggregate revenue recognized over such three-year period, approximately $47 million, was consistent with client advertising contracts, client billings and collections.
 No purchaser of advertising from the Company was affected by the irregularities in the Company's financial reporting, either by being billed in excess of its agreements or before such payments were due. The Company has no reason to believe that any current employee of the Company was responsible for the irregularities.
 Although the Company believes that its financial results since March 1991 are accurate as reported, the discovery and investigation of the financial irregularities in 1989 and 1990 have delayed delivery of a 1992 audit report by KPMG Peat Marwick, who have served as the Company's independent auditors since 1987. Accordingly, the following summary financial information is unaudited.
 Advertising revenues for the year ended Dec. 31, 1992, increased 11 percent to $19.8 million compared to $17.9 million in the previous year. The net loss for the year was $16.9 million or $2.15 per share compared to a net loss of $26.4 million or $3.36 per share in the year ended Dec. 31, 1991. The 1991 results include an extraordinary loss resulting from a writeoff of $909,677 in unamortized costs relating to the termination of an unused bank line of credit and have been adjusted to reflect approximately $780,000 in additional revenue that should have been recognized in 1991, but had been improperly shifted to previous fiscal periods.
 The 1991 results also include a provision of $5,500,000, which the Company reserved as its estimated share of a proposed settlement of the Company's ongoing securities litigation, which settlement was never consummated. The 1992 results include a provision of $3,440,000 for costs accrued in connection with the Company's relocation to Connecticut in February 1993, including a reserve of $2,999,184 representing the net present value of future lease payments under the Company's former lease of office space in New York City, which was terminated by the landlord for non-payment of rent.
 The Company had earnings from operations before interest, taxes, depreciation, amortization and relocation costs of $730,000 in 1992, versus an operating loss of approximately $7.0 million in 1991 (before the reserve for settlement costs). The improvement resulted primarily from a 47 percent reduction in revenue sharing payments to participating supermarkets as a result of amended sign placement agreements and a 9 percent decrease in other operating expenses due to improved operating efficiencies in running the electronic sign network. The average number of installed stores increased 14% to 5,350 in fiscal 1992, from 4,700 in fiscal year 1991.
 Since October 1991, the Company has been in default under its equipment leases and under a secured loan with an institutional lender. Accordingly, the net obligations under such financings have been classified as current obligations on the Company's balance sheets as of Dec. 31, 1991 and 1992. As of Dec. 31, 1992, the Company had negative stockholders' equity of $693,163, compared to positive equity of $16,220,337 at Dec. 31, 1991.
 The foregoing results have not been certified by the Company's independent accountants, and assume that the Company will continue as a going concern. The operating results for the year ended Dec. 31, 1991, which have been adjusted by $780,000 of additional revenue as described above, are also unaudited and are included for comparative purposes only.
 In-Store Advertising is currently negotiating with its equipment lessors and others in an effort to complete a comprehensive restructuring of the Company's obligations. The Company is encouraged by the progress of such negotiations, however no assurance can be given that such a restructuring is possible, or what the results of such a restructuring would be.
 In-Store Advertising, Inc. delivers advertising and promotional messages from consumer product companies at the point of purchase through its nationwide computerized network of electronic signs, reaching 80 million shoppers weekly.
 IN-STORE ADVERTISING, INC.
 Statements of Operations (Unaudited)
 Periods ended Fourth Quarter Fiscal Year
 Dec. 31, 1992 1991 1992 1991(A)
 Advertising Revenues $4,942,200 $5,047,100 $19,844,500 $17,872,800
 Revenue Sharing
 Expense 1,176,854 1,438,167 4,738,100 9,015,869
 Operating Expense 3,649,508 4,219,520 14,376,289 15,821,163
 Relocation Costs 3,440,000 -- 3,440,000 --
 Inc. (Loss) from Operations
 bef. Depr. & Amort. (3,324,162) (610,587) (2,709,889) (6,964,232)
 Inc. (Loss) from
 Operations (6,410,429)(3,158,427)(13,537,750) (16,483,778)
 Net Int. Inc. (Exp.) (863,573) (935,581) (3,270,430) (3,337,202)
 Reserve for Legal
 Settlement -- (5,500,000) -- (5,500,000)
 Loss before
 Extraordinary Item (7,340,423)(9,677,417)(16,913,500) (25,472,383)
 Extraordinary Item -- -- -- (909,677)
 Net Loss (7,340,423) (9,677,417) (16,913,500) (26,382,060)
 Loss per Share before
 Extraordinary Item $(0.93) $(1.23) $(2.15) $(3.24)
 Net Loss per Share $(0.93) $(1.23) $(2.15) $(3.36)
 Wtd. Avg. No. of
 Shares Outstanding 7,857,449 7,857,449 7,857,449 7,857,449
 (A) As adjusted.
 IN-STORE ADVERTISING, INC.
 Balance Sheet (Unaudited)
 12/31/92 12/31/91
 Assets
 Total Current Assets $5,487,821 $4,547,236
 Property and Equipment, Net 27,591,287 37,745,236
 Other Assets, Net 98,514 663,403
 Total Assets $33,177,622 $42,955,875
 Liabilities and Stockholders' Equity
 Total Current Liabilities $33,870,785 $26,243,868
 Long-term Debt -- --
 Other Liabilities -- 491,670
 Total Stockholders'
 Equity (Deficit) (693,163) 16,220,337
 Total Liabilities and
 Stockholders' Equity $33,177,622 $42,955,875
 -0- 6/11/93
 /CONTACT: Bernie Kilkelly or Cara Thompson of Morgen-Walke Associates, 212-850-5600, In-Store Advertising, Inc./
 (ISAN)


CO: In-Store Advertising, Inc. ST: Connecticut IN: ADV SU: ERN

SH -- NY011 -- 0960 06/11/93 09:04 EST
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