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TELEMATICS INTERNATIONAL ANNOUNCES IMPROVED FOURTH QUARTER AND 1991 RESULTS

 TELEMATICS INTERNATIONAL ANNOUNCES IMPROVED
 FOURTH QUARTER AND 1991 RESULTS
 FORT LAUDERDALE, Fla., Feb. 18 /PRNewswire/ -- Telematics International, Inc. (NASDAQ: TMAX) announced today that revenues for the year ended Dec. 31, 1991 were $64,413,000, compared to $66,672,000 in 1990. Income from operations for the year ended Dec. 31, 1991 is up $9,239,000 to $3,705,000 from a loss of ($5,534,000) in 1990. This is primarily attributable to a $9,139,000 or 20.8 percent reduction in operating expenses including write-offs mainly of software development projects during 1990.
 The company incurred a net loss of ($3,766,000) or ($.22) per share as compared to a net loss of ($7,389,000) or ($.44) per share in 1990. The net loss for 1991 was due primarily to unusual fourth quarter charges of: $3,843,000 associated with restructuring expected to occur in the early part of 1992; a $2,150,000 charge related to the write-off of the company's loans and minority investment in Network Automation Holdings, Pty. Ltd.; and $1,215,000 in professional fees associated with the previously announced merger negotiations, which were terminated on Jan. 11, 1992. The 1990 loss included fourth quarter charges of: $3,758,000 associated with the write-off of several software development projects whose future revenue potential was reassessed; $1,233,000 related to the Globenet, Inc. settlement; $426,000 of severance costs associated with a fourth quarter reduction of the company's work force; and various other charges totaling approximately $1 million.
 On Jan. 22, 1992, the Commonwealth Bank of Australia was appointed mortgagee in possession of certain of Network Automation's assets. The uncertainty of this event, which is in a state of flux, coupled with recent adverse developments with respect to an anticipated Australian government grant and a potential third-party investment, made it appropriate to write-off the company's loans and investment in Network Automation at this time. Although there is a possibility that some recovery of these loans and investment may be realized, there are no assurances this will occur.
 For the quarter ended Dec. 31, 1991, revenues were $17,634,000 as compared to $17,944,000 for the corresponding 1990 period. Income from operations amounted to $653,000 in the fourth quarter of 1991 as compared to a loss from operations of ($4,579,000) in the corresponding 1990 period. This improvement for the quarter ended Dec. 31, 1991 is due to a $4,464,000 or 31.6 percent reduction in operating expenses including write-offs primarily of software development projects during 1990 and a $768,000 increase in the gross profit margin compared to the same period in 1990. The company incurred a net loss of ($5,868,000) or ($.34) per share for the quarter ended Dec. 31, 1991, as compared to a net loss of ($6,369,000) or ($.38) per share, for the corresponding period in 1990.
 William A. Hightower, president and chief executive officer, stated, "The company sustained improved gross profit margins and substantially reduced operating expenses during both the quarter and year ended Dec. 31, 1991 as compared to the same periods in 1990. These factors enabled the company to report improved income from operations, up $5.2 million for the quarter and $9.2 million for the year ended Dec. 31, 1991, vs. those same periods in 1990. These improvements were achieved despite a decline in domestic revenues resulting from what appears to be the lingering effects of the downturn in the U.S. economy. Clearly, improvement in domestic revenues is a high priority for the company in 1992. The Dec. 31, 1991 balance sheet has strengthened from the prior year with cash up $2,537,000, or 22 percent, to $14,122,000, inventories down 28 percent and the elimination of a $2,980,000 note payable due to sustained assets management over the past 12 months."
 Founded in 1982, Telematics designs, manufactures, sells and supports a complete line of wide area networking products designed specifically for voice and data communications applications and networks. The company's products include a full range of programmable packet switching systems, access communications processors, T1/E1 networking multiplexers and Frame Relay switches. Telematics has approximately 380 employees worldwide. Headquartered in Fort Lauderdale, Fla., Telematics also has facilities in five domestic locations and Basingstoke, England; Paris, France; and Frankfurt, Germany.
 TELEMATICS INTERNATIONAL, INC.
 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 (Dollars in thousands, except per share data)
 Three Months Ended 12 Months Ended
 (Unaudited) (Audited)
 Dec. 31, Dec. 31, Dec. 31, Dec. 31,
 1991 1990 1991 1990
 Net sales $17,634 $17,944 $64,413 $66,672
 Operating costs and expenses:
 Cost of sales 7,301 8,379 25,913 28,272
 Product development 3,536 7,370 12,667 17,483
 Sales and marketing 4,325 4,614 15,754 17,991
 General and administrative 1,819 2,160 6,374 8,460
 Total 16,981 22,523 60,708 72,206
 Income (loss) from operations 653 (4,579) 3,705 (5,534)
 Other income (expense):
 Loss on equity investment (267) (151) (950) (283)
 Interest income (expense), net 149 (94) 748 (231)
 Foreign exchange gain (loss) 408 86 170 301
 Loss on write-off of loans
 and investments (2,150) (1,233) (2,150) (1,233)
 Abandoned merger expenses (1,215) -- (1,215) --
 Restructuring, severance
 and other (3,834) (398) (3,730) (409)
 Total (6,909) (1,790) (7,127) (1,855)
 Income (loss) before provision
 (credit) for income taxes (6,256) (6,369) (3,422) (7,389)
 Provision (credit) for
 income taxes (388) -- 344 --
 Net income (loss) $(5,868) $(6,369) $(3,766) $(7,389)
 Earnings (loss) per share:
 Net income (loss) $ (0.34) $ (0.38) $ (0.22) $ (0.44)
 Weighted average shares
 outstanding 17,106 16,866 17,062 16,848
 (A) -- Certain amounts in the 1990 financial statements have been reclassified to conform to the 1991 presentation.
 TELEMATICS INTERNATIONAL, INC.
 CONSOLIDATED CONDENSED BALANCE SHEETS
 (Audited)
 (In thousands)
 Dec. 31 Dec. 31
 1991 1990
 ASSETS
 Current assets:
 Cash and cash equivalents $14,122 $11,585
 Accounts receivable, net 15,777 15,680
 Inventories 7,767 10,758
 Refundable income taxes 66 129
 Prepaid expenses and other 1,530 1,144
 Total current assets 39,262 39,296
 Investment -- 1,358
 Plant, equipment and leasehold
 improvements, net 3,958 5,800
 Software production costs, net 6,373 6,713
 Other assets, net 1,634 4,059
 Total $51,227 $57,226
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Note payable $ -- $ 2,980
 Accounts payable 2,973 2,408
 Accrued expenses and other 6,306 6,628
 Income taxes payable 349 --
 Total current liabilities 9,628 12,016
 Shareholders' equity
 Preferred stock, $1.00 par value; authorized
 5,000,000 shares, issued none -- --
 Common stock, $.01 par value; authorized
 24,000,000 shares, issued and outstanding
 17,099,524 at Dec. 31, 1991 & 16,980,658
 at Dec. 31, 1990 171 170
 Capital in excess of par value 51,465 51,311
 Retained earnings (deficit) (10,037) (6,271)
 Total shareholders' equity 41,599 45,210
 Total $51,227 $57,226

 -0- 1/18/92
 /CONTACT: Miriam K. Frazer, chief financial officer and corporate secretary of Telematics International, 305-772-3070/
 (TMAX) CO: Telematics International, Inc. ST: Florida IN: CPR SU: ERN


AW-JJ -- FL001 -- 9737 02/18/92 08:36 EST
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