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THREE-FIVE SYSTEMS INC. REPORTS RECORD THIRD QUARTER SALES AND EARNINGS

 PHOENIX, Oct. 14 /PRNewswire/ -- Three-Five Systems Inc. (AMEX: TFS) announced record sales and earnings for the third quarter ended Sept. 30, 1993. Net income of $1,039,000, or $.29 per share, was 409 percent above last year's third quarter. Operating income of $1,919,000 was 444 percent above the same quarter of last year. Revenues of $10,313,000 for the third quarter were 106 percent higher than the comparable quarter of 1992. This strong performance was possible even though income taxes for the third quarter of 1993 were $742,000 compared to only $12,000 in the same quarter of 1992.
 For the first nine months of 1993, operating earnings (after tax but before accounting changes) increased by 273 percent to $2,314,000, or $.66 per share, compared to $621,000, or $.17 per share, for the first nine months of 1992. This increase was achieved even with a $1,449,000 tax provision, which was $1,381,000, or $.39 per share higher than the same period of 1992. Revenues of $25,625,000 were 78 percent higher than last year's $14,405,000 for the same nine-month period. The FASB Statement No. 109 "Accounting for Income Taxes" one-time adjustment recorded in this year's first quarter added $924,000, or $.26 per share, increasing the net income after accounting adjustment to $3,238,000, or $.92 per share.
 "Particularly strong demand for our design and manufacturing services in Europe, combined with higher domestic shipments have driven our revenues and earnings to yet another record level," commented David R. Buchanan, chairman and chief executive officer. "Increasing requirements from the wireless communications markets, especially from our largest, industry-leading customer, have mandated that we expand our capacity and technological capabilities. We have already done so and will continue this ongoing process."
 Three-Five Systems Inc. is a manufacturing and engineering services company specializing in custom liquid crystal display (LCD) and light emitting diode (LED) display devices. The company develops and manufactures custom information display systems and input devices for original equipment manufactures for a broad mix of electronic products including communications, medical and office automation equipment. Worldwide headquarters and a technology center with a LCD laboratory, clean room and production facility for prototype and low-volume manufacturing are located in Phoenix. Swindon, England, services the European community and high volume manufacturing is accomplished in Manila, The Philippines.
 THREE-FIVE SYSTEMS INC.
 Condensed Consolidated Statements of Operations
 (Unaudited)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 (In thousands except per share data)
 Net sales $10,313 $5,016 $25,625 $14,405
 Costs and expenses:
 Cost of sales 7,218 3,515 18,160 10,465
 Selling, general and
 administrative 945 1,027 2,870 2,667
 Research and development 231 121 553 334
 Total 8,394 4,663 21,583 13,466
 Operating income 1,919 353 4,042 939
 Interest and other income
 (expense) (138) (137) (279) (250)
 Income before provision for
 income taxes and cumulative
 effect of accounting change 1,781 216 3,763 689
 Provision for income taxes 742 12 1,449 68
 Income before cumulative
 effect of accounting change 1,039 204 2,314 621
 Cumulative effect of
 accounting change --- --- 924 ---
 Net income $1,039 $204 $3,238 $621
 Earnings per share:
 Income before cumulative
 effect of accounting
 change $0.29 $0.06 $0.66 $0.17
 Cumulative effect of
 accounting change --- --- 0.26 ---
 Net income $0.29 $0.06 $0.92 $0.17
 Weighted average shares
 outstanding 3,541,951 3,401,146 3,514,508 3,679,380
 Condensed Consolidated Balance Sheets
 (Unaudited)
 Sept. 30, Dec. 31, Sept. 30,
 1993 1992 1992
 (In thousands)
 Assets
 Cash and cash equivalents $638 $573 $555
 Accounts receivable, net 4,294 3,216 3,059
 Inventory, net 5,220 4,025 4,292
 Deferred tax asset 752 --- ---
 Other current assets 85 64 127
 Total current assets 10,989 7,878 8,033
 Property, plant and equipment, net 2,153 1,216 1,245
 Assets held for sale 340 400 400
 Cost in excess of net assets
 acquired, net 258 287 297
 Other assets 22 30 31
 Total assets $13,762 $9,811 $10,006
 Liabilities and Stockholders' Equity
 Accounts payable $2,419 $1,661 $1,776
 Other accrued liabilities 1,954 1,305 1,001
 Short-term bank lines 211 257 2,147
 Current portion of long-term debt 87 205 204
 Total current liabilities 4,671 3,428 5,128
 Long-term debt and notes payable 722 1,722 623
 Deferred tax liability 84 --- ---
 Total liabilities 5,477 5,150 5,751
 Stockholders' equity 8,285 4,661 4,255
 Total liabilities and
 stockholders' equity $13,762 $9,811 $10,006
 -0- 10/14/93
 /CONTACT: Peg Breen of Three-Five Systems, 602-496-0035/
 (TFS) CO: Three-Five Systems Inc. ST: Arizona IN: CPR SU: ERN


JB-MF -- LA010 -- 2000 10/14/93 08:01 EDT
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Date:Oct 14, 1993
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