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INCSTAR REPORTS SECOND QUARTER NET EARNINGS

 STILLWATER, Minn., July 12 /PRNewswire/ -- INCSTAR Corporation (ASE:ISR) today reported net income of $463,000, or 3 cents per share, for its second quarter ended July 2, 1993, compared with net income of $1,427,000, or 9 cents per share for the second quarter of 1992. Net sales were $11,360,000 in the quarter, compared with $12,410,000 for the second quarter of 1992.
 Lower net sales were primarily attributable to a downturn in the company's bulk antisera business. This business has historically been cyclical, and the current downturn is expected to be temporary. In addition, the company experienced a decline in sales of its thyroid and therapeutic drug monitoring (TDM) product lines, due mainly to a market shift toward automated testing for these assays. The company expects to convert its current thyroid and TDM products to a fully-automated format in connection with its fluorescence polarization immunoassay (FPIA) development program. Sales of the company's bone and mineral metabolism product line continued to grow during the second quarter, due to recent new-product introductions.
 Second quarter gross margin was 47 percent, compared with 53 percent in the second quarter of 1992. Lower production volumes and lower pricing on some of the company's products have contributed to this decline.
 Selling, general and administrative expenses were lower during the second quarter, due to ongoing cost containment measures. Research and development expenditures continued to increase, as efforts toward commercialization of the company's FPIA technology move forward. R&D spending will continue to represent a larger percentage of sales while the new FPIA assays and associated instrumentation are under development.
 Net sales for the first half of 1993 were $22,424,000, compared with $23,299,000 in the comparable period last year. Net income was $76,000, less than one cent per share, compared with $2,543,000, or 16 cents per share in the first half of 1992. Included in first half results for 1993 was a $750,000 one-time charge resulting from a workforce reduction.
 Dr. Orwin L. Carter, president and CEO said, "Work on our FPIA technology is going well and is on-track with our expectations for market introduction in 1995. While this very important R&D project will be a major area of focus for us over the next few years, we are also diligently working to increase revenues in other ways. In that regard, we expect sales and earnings to improve in our second half, as we introduce new products and sales of our bulk antisera products return to more normal levels."
 INCSTAR is a Minnesota-based manufacturer and distributor of high quality immunodiagnostic products for health care professionals and manufacturers. The company is an affiliate of the Italian-based Fiat Group (NYSE:FIA).
 INCSTAR Corporation
 (Unaudited)
 (In thousands except share and per share data)
 Quarter Ended Six Months Ended
 7/2/93 6/30/92 7/2/93 6/30/93
 Net sales $11,360 $12,410 $22,424 $23,299
 Cost of goods sold 5,969 5,865 11,796 10,964
 Gross margin 5,391 6,545 10,628 12,335
 Selling, general & admin. 3,296 3,661 6,779 6,948
 Research & development 1,366 785 2,764 1,527
 Unusual item -- -- 750 --
 Total operating expenses 4,662 4,446 10,293 8,475
 Operating income 729 2,099 335 3,860
 Interest expense 127 174 286 374
 Other income (expense) 53 -- 59 (15)
 Income before taxes 655 1,925 108 3,471
 Provision for income taxes (192) (498) (32) (928)
 Net income $463 $1,427 $76 $2,543
 Net income per share $.03 $.09 $.00 $.16
 Weighted average shares
 and equivalents 16,376,039 16,371,175 16,289,647 16,345,151
 Consolidated Balance Sheets
 (In thousands)
 7/2/93 12/31/92
 Assets
 Total current assets $21,891 $22,126
 Property and equipment, net 18,050 17,860
 Other 4,454 5,083
 -- $44,395 $45,069
 Liabilities and Shareholders' Equity
 Total current liabilities $7,106 $8,263
 Long term debt 8,080 8,167
 Other non-current 1,207 1,362
 Shareholders' equity 28,002 27,277
 -- $44,395 $45,069
 -0- 7/12/93
 /CONTACT: Jack Falker of Swenson Falker Eilertsen, 612/371-0000; for INCSTAR, or John Booth of INCSTAR Corporation, 612/779-1700/
 (ISR) (FIA)


CO: INCSTAR Corporation ST: Minnesota IN: MTC SU: ERN

DB -- MN003 -- 0202 07/12/93 06:59 EDT
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Date:Jul 12, 1993
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