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MODTECH UPDATE

 PERRIS, Calif., Oct. 5 /PRNewswire/ -- Modtech Inc. (NASDAQ: MODT) today announced that it has reached an agreement with its bank wherein its revolving line of credit extends through March 1994. The borrowing calls for advances based on certain percentages of eligible accounts receivables and eligible net unbilled receivables, with decreasing maximum advances. The agreement also contains various restrictive convenants.
 According to Evan M. Gruber, chief executive officer, "We continue to be hampered by the budget shortfalls which plague the State of California. The California economy continues to underperform the nation. Since 1990, California has lost between 600,000 and 800,000 jobs. This dramatic slowdown in jobs growth has reduced state and local government sources of revenue. School districts do not appear to have funds to place orders."
 The company also announced that revenues for the third quarter will be significantly lower than those reported in the same period of last year and the company expects to report an operating loss. Additionally, the company will take a restructuring charge in the quarter. This charge includes the write-down of intangibles and certain other assets. The company continues to contract and these charges are associated with the "downsizing" that has taken place.
 Modtech Inc. designs, manufactures, and installs modular relocatable classrooms, marketing its products to California school districts, as well as to the State of California and leasing companies which in turn lease the classrooms to school districts.
 -0- 10/5/93
 /CONTACT: Evan Gruber, CEO, 714-943-4014/
 (MODT)


CO: Modtech Inc. ST: California IN: SU:

LM-MF -- LA032 -- 9114 10/05/93 18:17 EDT
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Publication:PR Newswire
Date:Oct 5, 1993
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