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TENNEY ENGINEERING, INC. STATEMENT ON RESTRUCTURING

 UNION, N.J., Dec. 18 /PRNewswire/ -- Robert S. Schiffman, chairman of the board and chief executive officer of Tenney Engineering, Inc., (AMEX: TNY) announced that Tenney will continue a corporate restructuring whereby it will discontinue environmental test equipment manufacturing operations in its Union, N.J., facility, listing this facility for sale and entering into a licensing agreement for the manufacture of its environmental test chambers and other equipment. After the restructuring, Tenney's operations will consist of servicing and installing of environmental equipment, earning license fees under the aforementioned agreement and manufacturing, through its DynaVac subsidiary, other high technology environmental test equipment, diversified vacuum systems for space simulation, optic coating and plasma treatment for medical labware.
 The management of Tenney has determined, based upon projected sales levels and current and past operating results, it is no longer economically feasible for Tenney to manufacture its environmental equipment profitably at its Union, N.J., facility. In connection with the above, Tenney will list the facility for sale, consummation of which will require the approval from the New Jersey environmental authorities. Tenney may also have a liability arising from the early withdrawal from its union employees' multi-employer pension plan. Management currently expects that Tenney will record a provision in the range of approximately $600,000 to $800,000 in the fourth quarter of 1992 for realized and possible losses. Management cannot currently estimate, among other things, definitive amounts to be written off in connection with the discontinuance of the manufacturing facility. Accordingly, there can be no assurance that the ultimate amounts written off will not be more or less than estimated amounts recorded.
 Concurrent with the preceding, Tenney has entered into a six-year licensing agreement with Lunaire Limited, a privately owned Williamsport, Pa., manufacturer of environmental conditioning equipment. The terms of the agreement, amongst others, provide for: Lunaire to manufacture and sell environmental test chambers and other equipment under the Tenney name with Tenney also retaining the right to manufacture such products; Tenney to receive license fees equal to 5 percent of qualifying sales during the term of the agreement of up to $1,900,000; Lunaire to purchase not less than $500,000 of usable materials; an option for Lunaire to purchase Tenney's rights, title, and interest in the Tenney trademark for $100,000 at the end of the license term in the event Tenney is no longer manufacturing such products; and Tenney to perform all servicing and installation of the aforementioned equipment. All existing and pending orders for Tenney environmental test equipment are anticipated to be completed.
 In addition, as part of the licensing transaction, Tenney has entered into a four-year employment contract with Robert S. Schiffman for the purpose of making him available to Lunaire for approximately 40 percent of his time for consulting services, and Tenney will receive a fee for those services.
 Since 1990, Tenney has discontinued certain other activities including closing its South Brunswick, N.J., manufacturing facility in 1991, and the divestiture of its Gloekler subsidiary and the phase-out of certain product lines in 1992.
 Tenney reported consolidated net losses of $335,000 and $595,000 for the nine months ended Sept. 30, 1992, and the year ended Dec. 31, 1991, respectively. The table below presents Tenney's consolidated net revenue and estimated gross profit for those periods, and the portions thereof attributable to its continuing activities and the activities that have been, or will be, discontinued. For financial accounting purposes, the discontinued activities are considered to be a portion of the same business segment as those of the continuing activities and, accordingly, will not be reflected separately as a discontinued operation in Tenney's consolidated financial statements.
 TENNEY ENGINEERING, INC.
 FINANCIAL STATEMENTS
 Periods ended Nine months Year
 9/30/92 12/31/91
 Revenues:
 Continuing activities $6,150,000 $ 6,000,000
 Discontinued activities 7,106,000 10,639,000
 Totals 13,256,000 16,639,000
 Estimated gross profit:
 Continuing activities 1,600,000 1,400,000
 Discontinued activities 1,612,000 2,640,000
 Totals 3,212,000 4,040,000
 -0- 12/18/92
 /CONTACT: Frank Colgan, vice president - finance of Tenney Engineering, Inc., 908-686-7870/
 (TNY)


CO: Tenney Engineering, Inc. ST: New Jersey IN: CST SU: RCN

LR-OS -- NY013 -- 8097 12/18/92 09:53 EST
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Publication:PR Newswire
Date:Dec 18, 1992
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