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KEENE REPORTS IMPROVED THIRD QUARTER OPERATING RESULTS

 KEENE REPORTS IMPROVED THIRD QUARTER OPERATING RESULTS
 NEW YORK, Oct. 9 /PRNewswire/ -- Keene Corporation (NASDAQ: KEEN)


today reported higher third quarter sales and earnings compared with the 1991 period as a result of improved operating results at its Reinhold Industries, Inc. subsidiary.
 Reinhold is a custom manufacturer of heat-absorbing composite components, sheet molding compounds and structural composite components for a variety of defense, commercial and aerospace applications.
 Third quarter sales of $2,866,000 more than doubled compared with 1991s third quarter. Net income totaled $685,000, or 6 cents per share. Net income in the comparable 1991 period included non-operating income of $480,000 and totaled $338,000, or 3 cents per share.
 Higher third quarter sales and net income reflect the successful integration of Reynolds & Taylor, which was acquired in March 1992. The significant improvement in third quarter gross profit and operating profit also reflects the impact of 1991's cost reduction actions.
 For the nine months, sales increased 18 percent from 1991 levels to $9,146,000. Net income improved 26 percent to $2,305,000, or 22 cents per share, compared with $1,831,000, or 18 cents per share for the first nine months of 1991.
 During the third quarter and first nine months, the average yield on Keene's investment portfolio was 7.14 percent and 7.14 percent, respectively.
 Keene anticipates that in the fourth quarter it will have consumed all of its bodily injury products liability insurance coverage. As a result, Keene's is assessing the accounting treatment of the asbestos- related contingent liabilities and this could result in a substantial charge to earnings in the fourth quarter. Consequently, Keene does not anticipate paying a fourth quarter dividend.
 Asbestos Litigation
 Keene continued to adhere to the Asbestos Compensation Program it launched in July 1990 by paying settlements only on meritorious cases in amounts based upon specific disease ailments and geographic locations.
 In the third quarter, Keene incurred costs of $10.8 million for indemnities and defense legal fees compared with costs of $9.9 million for the comparable prior year period. This reflects higher indemnity payments as a result of an increasing acceptance of the Asbestos Compensation Program which more than offset the continued reduction in defense legal fees.
 For the nine months, the cost of indemnities and defense legal fees totaled $40.2 million compared with $34.6 million in the first nine months of 1991. A substantial portion of these costs was covered by insurance.
 At Sept. 30, 1992, approximately $74 million of jury verdicts were outstanding against Keene and on appeal to higher courts. During the appeals process, Keene is required to secure these verdicts by pledging marketable securities approximately equal to the verdict amounts. Keene's bonding capacity to prevent the execution of potential future verdicts against Keene's assets is limited to those assets not currently pledged to secure appeals and was $11 million at Sept. 30, 1992.
 KEENE CORPORATION
 Statements of Sales and Earnings
 (In 000's except per share data)
 Periods Ended Three Months Nine Months
 Sept. 30 1992 1991 1992 1991
 Net sales $2,866 $1,312 $9,146 $7,783
 Net income 685 338 2,305 1,831
 Earnings per share $.06 $.03 $.22 $.18
 Shares outstanding 10,442 10,442 10,442 10,442
 -0- 10/9/92
 /CONTACT: Tracey Lindenbaum of Keene Corporation, 212-557-1900/
 (KEEN) CO: Keene Corporation ST: New York IN: SU: ERN


TM-PS -- NY070 -- 8510 10/09/92 16:33 EDT
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Date:Oct 9, 1992
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