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ZONIC BOOKS RECORD $3.5 MILLION IN NEW ORDERS; HEAVY DEVELOPMENTAL EXPENSES CAUSE DECLINE IN EARNINGS

 ZONIC BOOKS RECORD $3.5 MILLION IN NEW ORDERS;
 HEAVY DEVELOPMENTAL EXPENSES CAUSE DECLINE IN EARNINGS
 CINCINNATI, Aug. 13 /PRNewswire/ -- Despite near record bookings of new orders in excess of $3.5 million, Zonic Corporation (NASDAQ: ZNIC) had a decline in earnings for its 1993 fiscal first quarter, due primarily to a slight decline in sales and increased costs related to the amortization of software construction and product enhancements which were capitalized in earlier periods.
 Gerald J. Zobrist, president and chief executive officer, noted that Zonic has spent over $8.5 million in the last three years for software construction and product enhancements related to the company's top-of- the-line System 7000 multi-channel signal processor, its World Class Analyzer (WCA) noise and vibration measurement system and its machinery monitoring software and hardware products.
 "These products are now being marketed successfully and we are recognizing as expenses over the life of these products, costs which were previously capitalized," Zobrist noted.
 "As these new products are sold, we expect future sales to absorb the increased product amortization expenses."
 Zobrist said that based on the market reaction to the company's new products such as the WCA, Workstation 7000, and orders to date, Zonic anticipates substantial increased sales over the next three years. He cautioned, however, that the present world economy could hold down large increases in the second and third quarters of this fiscal year, but that the company's longer term prospects were extremely positive with improvements in the world economy.
 For the three months ended June 30, 1992, Zonic had a decline in net profit to $33,162 or 1 cent per share from $111,935 or 4 cents per share in the year-ago period.
 Zobrist noted that new product amortization expenses were $325,000 in the 1993 fiscal first quarter compared to $150,000 in the prior year period.
 Sales of products and services for the 1993 fiscal first quarter increased 20 percent to $2,149,924 compared with $1,787,398 in the year- ago period. Revenues from development contracts representing largely payments received by Zonic from A&D Company Ltd., its joint venture marketing partner, declined to $192,075 compared with $640,160 in the prior year. Net sales declined slightly to $2,341,999 compared to $2,427,558 in the 1992 fiscal first quarter.
 Zobrist noted that the company had recently announced in its annual report, that due to the company's rapid growth and the constant demand for working capital, Zonic is in need of additional funds to satisfy cash flow shortages currently being experienced by the company. He noted that the company has retained the services of McDonald & Company Investments, Inc., a Cleveland-headquartered investment banking firm, to explore financing opportunities in the private market to meet the company's current and future cash flow needs.
 "We are very pleased with the new products we've been able to develop and feel Zonic is well positioned to cash in on the investment it has made during the past three years.
 "We've spent heavily on developing products to meet the needs of the marketplace - its now time to harvest the results of our efforts," Zobrist said.
 "Our products have received excellent acceptance as evidenced by a number of major orders received during the first quarter," Zobrist noted.
 He cited a $975,000 order for a machinery monitoring system to be used in a Thailand power plant, a $200,000 space station testing system to be used by the National Aeronautics and Space Agency (NASA) at its Langley base and a $100,000 nuclear power plant testing order by Ontario Hydro as examples of some of the company's larger orders during the quarter.
 Zonic Corporation develops, manufactures and markets proprietary software and computerized test and measurement equipment used in a wide range of industrial and military applications.
 Zonic systems and related software have broad application in product engineering and design, testing, and performance monitoring. Company headquarters are located in the Greater Cincinnati metropolitan area with sales and service facilities in North America, Western Europe and the Pacific Rim.
 ZONIC CORPORATION
 COMPARATIVE FINANCIAL DATA
 For the Three Month Periods Ended
 June 30, 1992 and 1991
 (unaudited)
 Three Months Percent
 6/30/92 6/30/91 Change
 Revenues:
 Products and Services $2,149,924 $1,787,398 20
 Development Contracts, Other 192,075 640,160 (70)
 Total 2,341,999 2,427,558 (4)
 Net Profit 33,162 111,935 (70)
 Earnings per Share $ 0.01 $ 0.04 (70)
 Weighted Average Shares 3,109,908 3,112,191
 Backlog of Orders(A) 5,599,050 5,914,000
 (A) -- Includes Deferred Revenue of
 $ 2,692,420 and $1,850,850
 for 6/30/92 and 6/30/91, respectively
 -0- 8/13/92
 /CONTACT: T. Clay Lehmann, treasurer & chief financial officer of Zonic Corporation, 513-248-1911; or Nicholas G. Biro of O'Connor Biro & Associates, 708-498-2284; for Zonic Corporation/
 (ZNIC) CO: Zonic Corporation ST: Ohio IN: CPR SU: ERN


KK -- CL006 -- 9629 08/13/92 12:18 EDT
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Date:Aug 13, 1992
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