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SUN ELECTRIC ANNOUNCES FIRST QUARTER RESULTS

 SUN ELECTRIC ANNOUNCES FIRST QUARTER RESULTS
 CRYSTAL LAKE, Ill., May 7 /PRNewswire/ -- Sun Electric Corp.


(NYSE: SE) announced today the following financial results for the first calendar quarter of 1992:
 SUN ELECTRIC CORP.
 (Dollars in thousands except per share amounts)
 Quarter ended March 31 1992 1991
 Sales $54,346 $54,077
 Operating income (loss) 651 (2,562)
 Net income (loss) (1,843) (4,682)
 Net income (loss) per
 common share ($.19) ($.51)
 Gerald A. Kien, chairman, president and chief executive officer stated, "The company's international division continued its strong performance, reporting sales of $32.4 million in the first quarter of 1992 compared to $29.2 million in the same quarter last year. These results reflect continued strength in Germany and $1.1 million of residual sales in the United Kingdom related to a vehicle emissions testing program.
 "The operating loss reported by the company's North American division in the first quarter reflected a $2.3 million improvement over the first quarter of 1991, notwithstanding a sales decline of $2.9 million; this improved performance was the result of better product margins and decreased administrative expenses.
 "Consistent with its product planning strategy, the company introduced seven new products in the United States during the first quarter of 1992 including three products designed to recover and recycle refrigerant from vehicle air conditioners, a lower cost PC-based diagnostic engine analyzer, a lower cost engine analyzer, a lower cost vehicle emissions analyzer, and SIMU-TECH, an engine diagnostic product developed by Edge Diagnostic Systems, a privately held corporation in which the company has a minority equity investment.
 "Subsequent to the end of the first quarter, the company, which already held a 50 percent equity interest in Vehicle Test Technology, Inc. (VTTI), purchased the remaining 50 percent interest from a third party. VTTI currently operates all of the vehicle emissions testing stations in the state of Washington. As part of the transaction, the company also acquired the name 'Systems Control,' certain technology, patents copyrights and technical know-how related to the business of testing motor vehicle emissions at centralized locations. It is anticipated that this acquisition will enable the company, through its new Systems Control business unit, to expand its presence in the growing centralized vehicle emissions testing market."
 Sun Electric Corp. designs, manufactures, markets and services automotive diagnostic, test and service equipment and information and management systems for the motor vehicle service industry in more than 100 countries. The company also designs and operates centralized vehicle emissions inspection stations.
 SUN ELECTRIC CORP.
 Consolidated Condensed Balance Sheet
 (In thousands)
 Periods ended 3/31/92 12/31/91
 Cash & equivalents $ 6,047 $ 5,058
 Receivables, net 46,752 52,014
 Inventories 79,319 72,850
 Total current assets 132,118 129,922
 Investments and advances -
 unconsolidated affiliate(A) 1,318 1,154
 Prepaid expenses and other assets 10,401 8,318
 Fixed assets, net 24,752 24,180
 Total assets $168,589 $163,574
 Notes payable (A)(B) $ 15,725 $ 11,849
 Accounts payable 17,153 16,658
 Accrued expenses 29,867 29,902
 Income taxes 8,181 7,495
 Total current liabilities 70,926 65,904
 Long-term debt 7,430 7,192
 Other non-current liabilities 2,148 1,937
 Shareholders' equity 88,085 88,541
 Total liabilities and equity $168,589 $163,574
 Reference should be made to the 1991 annual report to shareholders for a description of the company's accounting policies and other financial disclosures.
 SUN ELECTRIC CORP.
 Consolidated Condensed Statement Of Operations
 In thousands except per share data
 Three months ended March 31, 1992 1991
 Net sales $54,346 $54,077
 Cost of sales 32,194 33,066
 Gross income 22,152 21,011
 Selling, general and
 administrative expenses 21,501 23,573
 Income (loss) from operations 651 (2,562)
 Other (income) expense:
 Interest (income) expense, net 484 692
 Foreign currency losses 278 424
 Net earnings of unconsolidated
 affiliate (239) (290)
 Other (income) expense, net (C) (124) 73
 Total 399 899
 Earnings (loss) before provision
 for income taxes 252 (3,461)
 Provision for income taxes 2,095 1,401
 Net earnings (loss) $(1,843) $(4,862)
 Earnings (loss) per common share:
 Net earnings (loss) $(.19) $(.51)
 Shares used to calculate earnings
 (loss) per common share 9,496 9,457
 Reference should be made to the 1991 annual report to shareholders for a description of the company's accounting policies and other financial disclosures.
 (A) On April 10, 1992, the company purchased the remaining outstanding 50 percent equity interest in Vehicle Test Technology, Inc. (VTT), the company's unconsolidated affiliate, from a third party. The purchase price was funded with a $7,000 90-day bank bridge loan provided by one of the company's existing European banks. The company intends to refinance this loan by its due date of July 9, 1992, which will require the expansion of its present European credit facilities or the obtaining of financing from another source.
 (B) During the first quarter of 1992, the company agreed in principle to a renewal and extension of its $10,000 United States revolving credit agreement; the final documentation of this agreement has not yet been completed.
 (C) Included in other expense, net for the three months ended March 31, 1991, are $300 of expenses for legal and investment banking fees related to the investigation of a potential acquisition by the company.
 -0- 5/7/92
 /CONTACT: Martin M. Ellen of Sun Electric, 815-459-7700/
 (SE) CO: Sun Electric Corp. ST: Illinois IN: SU: ERN


SM -- NY105 -- 7792 05/07/92 16:16 EDT
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