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WASHINGTON SCIENTIFIC ESTABLISHES RESERVE FOR PLANT CLOSING; REPORTS SMALL SECOND QUARTER OPERATING LOSS

 WASHINGTON SCIENTIFIC ESTABLISHES RESERVE FOR PLANT CLOSING;
 REPORTS SMALL SECOND QUARTER OPERATING LOSS
 MINNEAPOLIS, April 14 /PRNewswire/ -- Washington Scientific Industries, Inc. (NASDAQ: WSCI) today reported that it established a reserve of $2,091,000 in its second quarter ended March 8, 1992, relating to the closing of its contract manufacturing plant in Covina, Calif. This action was taken to further reduce the company's fixed costs and eliminate excess plant space.
 Primarily as a result of establishing the reserve, the company reported a net loss for the quarter of $1,479,000, or 62 cents per share, composed of the after tax effect of the reserve of $1,443,000 and a small loss from the company's manufacturing operations of $36,000. This compares with net earnings of $53,000, or two cents per share, in the second quarter of 1991.
 Net sales for the second quarter were $18,491,000, a small increase over net sales of $18,323,000 for the second quarter of 1991.
 For the first six months of fiscal 1992, Washington Scientific reported a net loss of $1,855,000, or 78 cents per share, compared with net earnings of $23,000, or one cent per share, for the first six months of fiscal 1991. Net sales for the first six months of 1992 were $32,822,000, compared with $32,988,000 in the comparable period last year.
 The company's Contract Manufacturing Division was profitable in the second quarter, before consideration of the Covina reserve. Advanced Custom Molders' operating results were better than expected with only a small loss reported for the quarter.
 Clifford W. Dinsmore, president and CEO, said that the decision to close the Covina facility was based on manufacturing economics. "We believe our full-service manufacturing capability has developed to the point where a plant on the West Coast is no longer necessary for servicing major O.E.M. customers. Accordingly, we have decided to consolidate all of our machining operations into our Owatonna and Long Lake, Minn. facilities which, in the long run, will result in better profitability for this segment of our business. This is very much in line with our strong commitment to take any actions that will improve overall manufacturing efficiency and position Washington Scientific for more consistent financial performance.
 "The outlook for machining is positive. Our computer business remains strong and we are continuing our efforts toward diversifying our market and customer base. We see a trend toward smaller sized components in the computer peripheral market, which will require less plant space. This reinforced our decision to consolidate.
 "Second quarter operating results were somewhat better than our expectations because of improved performance by both Contract Manufacturing and Advanced Custom Molders. At this time, we expect to report operating profits for both the third and fourth quarters of fiscal 1992."
 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 plants located in Minnesota, and its Advanced Custom Molders subsidiary produces thermoplastic injection molded components in two Texas locations.
 WASHINGTON SCIENTIFIC INDUSTRIES, INC.
 AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS
 (unaudited)
 (In thousands except per share data)
 16 weeks ended 28 weeks ended
 March 8, March 10, March 8, March 10,
 1992 1991 1992 1991
 Net sales $18,491 $18,323 $32,822 $32,988
 Cost of products sold 16,623 16,074 30,254 29,080
 Gross margin 1,868 2,249 2,568 3,908
 Selling and administrative
 expense 1,515 1,736 2,503 3,129
 Provision for costs related
 to restructuring and
 plant closing 2,091 - 2,091 -
 (Loss) earnings from
 operations (1,738) 513 (2,026) 779
 Interest and other income (47) (18) (53) (40)
 Interest expense 407 438 715 779
 (Loss) earnings before
 income taxes (2,098) 93 (2,688) 40
 Income taxes (benefit) (619) 40 (833) 17
 Net earnings (loss) $(1,479) $53 $(1,855) $23
 Net earnings (loss)
 per share $(.62) $.02 $(.78) $.01
 Weighted average number
 of common shares
 outstanding 2,380,401 2,380,401 2,380,401 2,380,401
 Dividends paid per
 common share - $.05 $.05 $.10
 -0- 4/14/92
 /CONTACT: Jack Falker of Swenson Falker Eilertsen, 612-371-0000 or Bill Lucke of Washington Scientific Industries, 612-473-1271/
 (WSCI) CO: Washington Scientific Industries ST: Minnesota IN SU: ERN


AL -- MN001 -- 8051 04/14/92 08:02 EDT
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Date:Apr 14, 1992
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