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 LA JOLLA, Calif., Aug. 2 /PRNewswire/ -- Precision Aerotech Inc. (AMEX: PAR) today announced sales of $41.8 million from continuing operations for the period ended April 30, 1993, compared with $41.6 million for the 12-month period one year earlier. The company reported a net loss from continuing operations of $15.1 million, or $4.45 per share, after adjusting for the effect of preferred stock dividends, compared with a net loss of $2.1 million, or $.69 per share, the prior year. The net loss for the current reporting period, including the impact of discontinued operations, was $18.2 million, or $5.35 per share, compared with $2.2 million, or $.71 per share, the previous fiscal year.
 The sales increase from continuing operations for the 12 months ended April 30, 1993, compared to the same period one year earlier, results from a combination of increased optical scanner sales at Speedring Systems Inc. ("Systems"), an increase at Speedring Inc. ("Speedring") associated with a single large nonrecurring order and a decrease at L&S Aerotech Inc. ("L&S"), attributed to significantly lower military spare parts demand. Activities continue at all subsidiaries to develop customers, programs and markets to transition away from past heavy reliance on defense business and to minimize the impact of recent significant reductions in commercial air transport production schedules.
 Manufacturing gross profit performance declined 5 percent from $10.3 million to $9.8 million as a result of lower than normal margins on three new programs and lower overall volumes, at L&S.
 Increased selling expenses at Speedring and Systems, associated with the development of new customers and programs, new optical scanner product development activities at Systems and restructuring costs at Speedring were responsible for increases in selling, general and administrative expenses for the year ended April 30, 1993. Selling, general and administrative expense reductions continued at L&S and the Corporate Office, supplemented by administrative cost reductions at Speedring.
 Two other major adjustments impacted results from continuing operations. Because of the lower recent Speedring sales reflected in the year ended April 30, 1992, and April 30, 1993, a determination was made that the goodwill resulting from the purchase of the Speedring companies in 1988 required adjustment. As a result, goodwill carried on the balance sheet was reduced by $9 million more than the normal amortization for the reporting period. In addition, $2.5 million of expenses related to both previous and expected debt restructuring activities, which previously have been amortized over the life of the loan agreements, were expensed in the year ended April 30, 1993.
 After returning the Coast Aerotech Inc. ("Coast") subsidiary to positive operating income and cash flow performance in the year ended April 30, 1992, a thorough review of future business prospects and associated financial performance was conducted. It was concluded that insufficient improvement, if not some continued deterioration, would occur in customer requirements and markets served by Coast, making future positive financial performance unlikely. As a result, selected Coast activities were consolidated at L&S and the remainder of the assets are being sold. A $3 million impact from discontinuing Coast operations on July 31, 1993, was reflected in the April 30, 1993, financial statements.
 The company has been negotiating with its lenders to affect a financial restructuring that would reduce debt obligations and cure the current defaults under its credit agreements. With the sale by the Resolution Trust Corp. of the senior debt position in February to Business Asset Trust I and its subsequent resale to The Foothill Group Inc. on March 8, 1993, restructuring activities were interrupted.
 Debt restructuring discussions have since resumed with the company's subordinated lender, Teachers Insurance and Annuity Association, and its new senior lender, The Foothill Group Inc. Until such time that some form of debt restructuring is completed, the company will remain in default of its credit agreements, long-term debt will remain classified as a current liability and the lenders, at their discretion, have the option of accelerating their respective debt. If this were to occur, the company would not be able to meet its obligations and would be forced to file for protection under Chapter 11 of the Bankruptcy Code.
 Since the company no longer fully satisfies all the financial guidelines of the American Stock Exchange (AMEX) for continued listing, the company has consented to the removal of its common stock from AMEX. The last day for trading of Precision Aerotech Inc. stock on the AMEX will be Friday, Aug. 13, 1993. The company expects a market for its common stock will develop over the counter after Aug. 13, 1993.
 Financial Highlights
 (In thousands except shares and per share data)
 Three Months Ended Year Ended
 April 30, April 30,
 1993 1992 1993 1992
 Net sales $12,782 $11,094 $41,835 $41,554
 Loss from continuing
 operations before
 income taxes (12,487) (555) (14,945) (2,116)
 Income tax expense (57) (68) (149) (9)
 Loss from continuing
 operations ($12,544) ($623) ($15,094) ($2,125)
 Discontinued operations:
 Loss from operations:
 Coast (652) (295) (859) (85)
 Aero --- --- (75) ---
 Loss on disposal of
 Coast (2,165) --- (2,165) ---
 Total (2,817) (295) (3,099) (85)
 Net (loss) ($15,361) ($918) ($18,193) ($2,120)
 Loss per share:
 From continuing
 operations ($3.65) ($.19) ($4.45) ($.69)
 From discontinued
 operations (.82) (.09) (.90) (.02)
 Net loss per share ($4.47) ($.28) ($5.35) ($.71)
 Weighted average number
 of common shares
 outstanding 3,448,253 3,448,253 3,448,253 3,450,986
 -0- 8/2/93
 /CONTACT: R.W. Detweiler or S.R. Greene of Precision Aerotech, 619-456-2992/

CO: Precision Aerotech Inc. ST: California IN: ARO SU: ERN

JL-JB -- SD006 -- 8607 08/02/93 19:13 EDT
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Publication:PR Newswire
Date:Aug 2, 1993

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