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RECOGNITION REPORTS IMPROVED SECOND QUARTER OPERATING RESULTS AND RESTRUCTURING CHARGE

 RECOGNITION REPORTS IMPROVED SECOND QUARTER
 OPERATING RESULTS AND RESTRUCTURING CHARGE
 DALLAS, May 22 /PRNewswire/ -- Recognition Equipment Incorporated (REI) (NYSE: REC) today reported a net loss for the quarter ended April 30, 1992, of $1,488,000, or 12 cents of loss per share of common stock, compared to net income of $54,000, or 1 cent of earnings per share of common stock for the same period of 1991.
 These earnings include a one-time restructuring charge of $2,257,000, or 18 cents per share, for costs incurred, or anticipated, in order to effect the consolidation of REI and the Lundy Financial Systems Division of TransTechnology Corporation purchased by REI on March 30, 1992.
 Revenues for the quarter ended April 30, 1992, increased to $51,230,000, compared to $38,249,000 for the second quarter of 1991, due primarily to revenues associated with sales of Lundy products and Hybrid transport products.
 Robert Vanourek, REI chief executive officer said, commenting on the results, "Our revitalization continues to progress. We are pleased to report that on an operating profit basis, we had one of our strongest quarters in the past few years. The recent addition of Lundy to our product offerings and the validation of our software strategy by NCR and others bodes well for our future."
 Net loss for the six-month period ended April 30, 1992, was $1,174,000, or 9 cents per share, compared to net income of $3,673,000, or 36 cents per share for the first six months of 1991. Net loss for the six-month period ended April 30, 1992, included a restructuring charge of $2,257,000, or 18 cents per share, and net income for the six- month period ended April 30, 1991, included a gain of $5,541,000, or 54 cents per share, from the sale of the Wand Products Division.
 Revenues for the six-month period of 1992 were $92,949,000, compared to $74,473,000 for the corresponding period of 1991. Substantially all of the increase is attributable to the addition of Lundy and Hybrid product sales and the shipment of a large order to the Japanese government during the first quarter of 1992.
 At April 30, 1992, the company's total backlog of orders believed to be firm declined to $32,063,000, compared to $45,620,000 at April 30, 1991, primarily as a result of the shipment during the first quarter of 1992 of the large Japanese government order that was entered into the company's backlog during the first quarter of 1991.
 REI, headquartered in Dallas, manufactures, sells and services automated work processing systems for customers throughout the world.
 RECOGNITION EQUIPMENT INCORPORATED AND SUBSIDIARIES
 Consolidated Statement of Operations
 (Unaudited)
 Three months ended April 30 1992 1991
 Revenues $51,230,000 $38,249,000
 Income before income taxes 28,000 805,000
 Provision for income taxes (1,516,000) (751,000)
 Net income (loss) 1,488,000) 54,000
 Earnings (loss) per share $(.12) $.01
 Six months ended April 30 1992 1991
 Revenues $92,949,000 $74,473,000
 Income before income taxes 2,089,000 5,262,000
 Provision for income taxes (3,263,000) (1,589,000)
 Net income (loss) (1,174,000) 3,673,000
 Earnings (loss) per share(A) $(.09) $.36
 (A) -- The weighted average common shares outstanding for the six- month periods ended April 30 are: (1992) 12,658,000 and (1991) 10,237,000. The computations of fully diluted earnings per share are anti-dilutive and, therefore, are not reported.
 Consolidated Statement of Operations
 (Unaudited; thousands, except per share)
 Periods ended Three months Six months
 April 30 1992 1991 1992 1991
 Revenues:
 Product $24,715 $17,353 $43,857 $31,761
 Customer service 26,515 20,896 49,092 42,712
 Total 51,230 38,249 92,949 74,473
 Cost of revenues:
 Product 14,382 8,836 25,529 17,133
 Customer service 19,432 15,085 35,250 31,020
 Total 33,814 23,921 60,779 48,153
 Gross profit 17,416 14,328 32,170 26,320
 Operating expenses:
 Research and development 2,588 2,794 4,557 5,220
 Marketing 6,934 6,356 12,808 12,511
 General and
 administrative 3,512 3,025 6,732 6,214
 Restructuring 2,257 -- 2,257 (5,431)
 Other operating 1,009 696 2,104 1,381
 Operating income 1,116 1,457 3,712 6,425
 Interest income 988 1,609 2,376 3,271
 Interest expense,
 related party -- (392) -- (784)
 Interest expense, other (1,296) (1,185) (2,491) (2,463)
 Foreign exchange losses,
 net (117) (193) (474) (339)
 Other expense, net (663) (491) (1,034) (848)
 Income before income
 taxes 28 805 2,089 5,262
 Provision for income
 taxes (1,516) (751) (3,263) (1,589)
 Net income (loss) $(1,488) $ 54 $ (1,174) $ 3,673
 Weighted average shares 12,819 10,297 12,658 10,237
 Earnings (loss) per
 share $(.12) $.01 $(.09) $.36
 -0- 5/22/92
 /CONTACT: Larry H. Lattig of Recognition Equipment, 214-579-6314/
 (REC) CO: Recognition Equipment Incorporated ST: Texas IN: SU: ERN


CK -- NY027 -- 3321 05/22/92 12:39 EDT
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Date:May 22, 1992
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