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WASHINGTON SCIENTIFIC ANNOUNCES SALE OF ADVANCED CUSTOM MOLDERS SUBSIDIARY; REPORTS THIRD QUARTER LOSS

 MINNEAPOLIS, July 14 /PRNewswire/ -- Washington Scientific Industries, Inc. (NASDAQ: WSCI) today announced that it has completed the previously announced sale of the business and assets of its Advanced Custom Molders (ACM) subsidiary to Moll Plasticrafters, L.P. The estimated sale price of approximately $4,700,000 consisted of a cash payment of $3,500,000 and a promissory note for the balance payable over three years. The final price will be based on net book value as of June 30, 1993.
 For the 13 weeks ended May 30, 1993, the company reported a net loss of $941,000, or 39 cents per share, which included 9 cents per share from discontinued operations. This compared with net earnings of $408,000, or 17 cents per share in last year's third quarter, which included a loss from discontinued operations of 11 cents per share.
 Net sales from continuing operations for this year's third quarter were $7,565,000, compared with $10,308,000 in the third quarter of fiscal 1992.
 For the 39 weeks ended May 30, 1993, the company reported net sales from continuing operations of $21,592,000, compared with net sales of $34,252,000 for the comparable period of fiscal 1992. The company's net loss for the first nine months of 1993 was $1,585,000, or 67 cents per share, which included a loss of 32 cents per share from discontinued operations. For the comparable period of 1992, the company's net loss was $1,447,000, or 61 cents per share, which included a loss of 14 cents per share from discontinued operations.
 Third quarter operating results were affected by start-up costs on new projects, as well as continued scheduling reductions with a major customer, which resulted in an unfavorable product mix and lower than break-even volumes for the company's Contract Manufacturing Division. High start-up costs are expected to continue, resulting in a fourth quarter loss. Operating cash flow remains positive.
 Clifford W. Dinsmore, president and CEO said, "With the sale of ACM, we are able to focus all of our attention on our contract manufacturing business. While scheduling reductions with our largest computer peripherals customer have continued to affect us, we have seen a definite recent upturn in volume requirements. "We are also in the midst of start-up operations on several projects with both new and repeat customers. While we incur significant costs at this stage, we are enthusiastic about this new business and believe that it represents a significant opportunity for us to return to consistent profitability within the next year."
 Washington Scientific Industries is a Minnesota-based provider of high precision manufacturing services for a variety of industries. The company's Contract Manufacturing Division produces machined metal components and subassemblies in two Minnesota plants.
 WASHINGTON SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)
 (In thousands except share and per share data)
 13 12 39 40
 weeks ended weeks ended weeks ended weeks ended
 May 30, May 31, May 30, May 31,
 1993 1992 1993 1992
 Net sales $7,565 $10,308 $21,592 $34,252
 Cost of products sold 7,711 8,496 20,093 30,763
 Gross margin (146) 1,812 1,499 3,489
 Selling and
 administrative expense 747 748 2,292 2,522
 Provision for costs
 related to restructuring
 and plant closing -- -- -- 2,091
 Interest and other
 income (3) (97) (20) (146)
 Interest expense 267 175 598 613
 (Loss) earnings from
 continuing operations
 before income taxes
 (benefit) (1,157) 986 (1,371) (1,591)
 Income taxes (benefit) (439) 316 (542) (479)
 (Loss) earnings from
 continuing
 operations (718) 670 (829) (1,112)
 Discontinued operations:
 (Loss) from operations
 of discontinued Advanced
 Custom Molders segment
 net of income tax
 benefit (43) (262) (576) (335)
 (Loss) on disposal of
 Advanced Custom Molders
 segment, net of income
 tax benefit (180) -- (180) --
 Net (loss) earnings $(941) $408 $(1,585) $(1,447)
 (Loss) earnings per share:
 (Loss) earnings from
 continuing
 operations $(.30) $.28 $(.35) $(.47)
 (Loss) on discontinued
 operations (.09) (.11) (.32) (.14)
 Net (loss) earnings
 per share $(.39) $ .17 $(.67) $(.61)
 Weighted average number
 of common shares
 outstanding 2,382,401 2,380,401 2,382,240 2,380,401
 Dividends paid per
 common share -- -- -- $.05
 WASHINGTON SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS (unaudited)
 (in thousands)
 May 30, May 31,
 1993 1992
 Assets:
 Total current assets $12,244 $13,276
 Property, plant and equipment, net 14,138 16,885
 Other 194 269
 Total Assets $26,576 $30,430
 Liabilities and Stockholders' Equity:
 Total current liabilities $11,144 $11,525
 Long-term debt 5,657 7,546
 Deferred income taxes 114 421
 Long-term pension liability 718 522
 Stockholders' equity 8,943 10,416
 Total Liabilities and
 Shareholders' Equity $26,576 $30,430
 -0- 7/14/93
 /CONTACT: Jack Falker of Swenson Falker Eilertsen, 612-371-0000, for Washington Scientific; or Bill Lucke of Washington Scientific Industries, 612-473-1271/
 (WSCI)


CO: Washington Scientific Industries, Inc. ST: Minnesota IN: SU: ERN

AL -- MN008 -- 1248 07/14/93 09:19 EDT
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Date:Jul 14, 1993
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