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VERSAR ANNOUNCES SECOND QUARTER RESULTS

 SPRINGFIELD, Va., Feb. 16 /PRNewswire/ -- Versar, Inc. (AMEX: VSR) today reported financial results for the fiscal 1993 second quarter period ended Dec. 31, 1992. Net service revenue for the second quarter was $8,201,000, a 25 percent decrease from net service revenue of $10,895,000 for the second quarter last year. Net loss for the quarter was $350,000, or 9 cents per share, compared to a net income of $79,000, or 2 cents per share for the comparable period a year ago.
 Net service revenue for the first half of FY93 was $16,804,000, a 24 percent decrease from net service revenue of $21,993,000 for the first half of last year. Net loss for the second half was $762,000, or 19 cents per share, compared to net income of $160,000, or a 4 cents per share for the same period last year.
 Ben Rawls, president and CEO of Versar, said: "Versar continues to encounter contracting delays in both the government and private sectors as a result of the recession and as the transition to the new administration occurs. Management has taken several steps to streamline costs, and remains focused on business development during this interim period. The company's profitability has been negatively impacted by the slowdown as Versar strives to balance expenses with the lower volume.
 "The major elements causing the reduction in net service revenue were reduced sales volume in Versar Architects & Engineers (VA&E) due to prolonged bankruptcy proceedings, the downsizing of laboratory operations, and delayed receipt of follow-on government contracts, as well as the recession based slowdown in private sector work. The VA&E reorganization plan was approved today by the Bankruptcy Court. I look forward to the turnaround of this unit after the resolution of the bankruptcy.
 "Our efforts on more aggressive working capital management to reduce bank debt resulted in lower interest cost of $390,000 for the first half of fiscal year 1993, and improvement in cash flow has enabled us to prepay almost $1 million of long-term debt.
 "Our major thrust over the remainder of the fiscal year will be to strengthen our business base and continue building our backlog. We are continuing our efforts to eliminate long-term debt by the sale and lease-back of our corporate headquarters. I am confident we can improve our level of performance as Versar positions itself for future growth. We are committed to the long-term growth and profitability of the company. Overall, our reduction of debt and costs, improvement of cash flow, and strengthening of management have made Versar a stronger company, and position us well for the balance of 1993."
 Versar, Inc., headquartered in Springfield, is a publicly-held, national environmental risk management company which provides a wide variety of scientific and technical services to help industry and government prevent pollution, manage environmental compliance, and correct environmental and health and safety problems caused by pollution, hazardous materials, and toxic substances.
 VERSAR, INC., AND SUBSIDIARIES
 Consolidated Statements of Operations
 (Unaudited, in thousands, except per share amounts)
 For the Three-Month For the Six Month
 Periods Ended Dec. 31, Periods Ended Dec. 31,
 1992 1991 1992 1991
 Gross Revenue $11,167 $14,079 $22,029 $28,926
 Purchased services
 and materials,
 at cost 2,966 3,184 5,225 6,933
 Net Service Revenue 8,201 10,895 16,804 21,993
 Contract costs 6,526 7,960 13,592 16,267
 Selling, general
 and administrative
 expenses 1,670 2,228 3,209 4,344
 Operating Income 5 707 3 1,382
 Other Expense (Income)
 Interest expense 350 540 746 1,136
 Income tax expense 5 98 19 123
 Loss (Income) from
 Continuing Operations (350) 69 (762) 123
 Income, Net of Tax
 from Discontinued
 Operations -- 10 -- 37
 Net (Loss) Income $(350) $79 $(762) $160
 (Loss) Income per
 Share from Continuing
 Operations $(0.09) $0.02 $(0.19) $0.03
 Income per Share
 from Discontinued
 Operations -- -- -- $0.01
 Net (Loss) Income
 per Share $(0.09) $0.02 $(0.19) $0.04
 Weighted Average
 Number of Shares
 Outstanding 3,955 3,941 3,955 3,941
 -0- 2/16/93
 /CONTACT: Versar Investor Relations, 703-750-3000/
 (VSR)


CO: Versar, Inc. ST: Virginia IN: SU: ERN

IH -- DC021 -- 6985 02/16/93 17:14 EST
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Date:Feb 16, 1993
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