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VARITRONICS REPORTS SUBSTANTIAL INCREASES IN SALES AND EARNINGS FOR ITS FISCAL YEAR ENDED JULY 31, 1993

 MINNEAPOLIS, Sept. 8 /PRNewswire/ -- Varitronic Systems, Inc. (NASDAQ:VRSY) announced today net earnings of $2,621,000 for its fiscal year ended July 31, 1993, an increase of 80.5 percent over earnings of $1,452,000 in the prior year. Earnings per share were 94 cents for fiscal 1993 (based on 2,781,000 average shares outstanding) compared with 1992 earnings per share of 43 cents (based on 3,356,000 average shares outstanding). Total net sales for the year ended July 31, 1993, were $45,423,000, up 25.8 percent over sales of $36,094,000 last fiscal year.
 Net earnings for the fourth quarter of fiscal 1993 were $501,000, or 19 cents per share, an increase of 551 percent over earnings of $77,000 or 3 cents per share, in the year-ago period. Net sales for the quarter ended July 31, 1993, increased 29.9 percent to $11,563,000 from $8,903,000 in the fourth quarter of last year.
 Varitronics experienced an involuntary shutdown of its manufacturing and distribution facility late in the fourth quarter of fiscal 1992. The shutdown caused a delay in the shipment of $1,100,000 of orders which otherwise would have been included in fiscal 1992 sales. These orders were shipped in August 1992 and included in fiscal 1993 sales, which positively impacted 1993 earnings per share by 9 cents.
 Included in fiscal 1993 earnings was $392,000 of other income, or 9 cents per share, from the sale of Insignia Systems, Inc., common stock. The gain from these stock sales was realized in the first half of fiscal 1993: 4 cents in the first quarter, and 5 cents in the second quarter. In fiscal 1992, a total gain of $337,000, or 7 cents per share, was included in earnings from such stock sales.
 "We are very pleased to report excellent results for our fiscal year ended July 31, 1993," said Scott Drill, chairman, president and CEO of Varitronics. "The increase in 1993 sales over the 1992 level was due to the success of new products added to our line in 1993. The new product additions include the EasyStep(TM) 4000 Label and Sign Maker, the PosterLynx(TM) personal computer interface for our PosterPrinter(TM) Plus machine and three lettering systems being sold by Varitronics under a distribution agreement with Max Co., Ltd., of Japan.
 "We've been able to effectively leverage sales of these new products by expanding distribution this past fiscal year," continued Drill. "Our Identification Products Division, which was formed last fall, was successful in recruiting 40 new independent dealers to sell the EasyStep 4000 and other identification products. We've also expanded private label distribution and increased the sales force of our core dealer network through our new 'Select Dealer' program."
 "New product development and the expansion of our distribution system will remain key areas of focus for Varitronics in fiscal 1994," stated Drill. "Two new products are currently scheduled for introduction in January 1994."
 Minnesota-based Varitronics develops, manufactures and markets innovative, high-quality machines and supplies for users in the everyday presentation market and the industrial labeling and signage market.
 VARITRONIC SYSTEMS, INC.
 Results of Operations
 (in thousands, except per share amounts)
 Fourth Quarter Ended Percent Year Ended Percent
 7/31/93 7/31/92 Change 7/31/93 7/31/92 Change
Net sales $11,563 $8,903 29.9 $45,423 $36,094 25.8
Income (loss) from operations 722 (137) -- 3,612
 1,691 --
Gain on sale of investment(a) -- 150 -- 392 337
 --


Other income (expense),
 net (21) 103 -- (58) 174 --
Income before tax 701 116 504.3 3,946 2,202 79.2
Net income $501 $77 550.6 $2,621 $1,452 80.5
Net income per share $.19 $.03 -- $.94 $.43 --
Weighted average common shares outstanding 2,692 3,065 --
 2,781 3,356 --
 (a)Gain on sale of Insignia Systems, Inc., common stock -- 134,011 shares sold in fiscal 1993 and 99,915 shares sold in fiscal 1992.
 -0- 9/8/93
 /CONTACT: Curt Swenson of Swenson/Falker Associates, 612-371-0000, for Varitronics; or Debbie Moore of Varitronics 612-542-1500/
 (VRSY)


CO: Varitronics Systems, Inc. ST: Minnesota IN: SU: ERN

DB-KH -- MN007 -- 9857 09/08/93 13:15 EDT
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Date:Sep 8, 1993
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