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ZONIC EXPECTS SECOND QUARTER LOSS DUE TO SLOW ECONOMY; ANTICIPATES COMPLETION OF $2.5 MILLION FINANCING PACT

 ZONIC EXPECTS SECOND QUARTER LOSS DUE TO SLOW ECONOMY;
 ANTICIPATES COMPLETION OF $2.5 MILLION FINANCING PACT
 CINCINNATI, Oct. 27 /PRNewswire/ -- Zonic Corporation (NASDAQ: ZNIC) said today it expects to report a substantial loss for its fiscal second quarter ended Sept. 30, 1992.
 Gerald J. Zobrist, president and chief executive officer, said the loss was due to a drop in sales, which he attributed to the slowdown in the world economy, and a one-time, non-recurring restructuring charge related to an aggressive cost reduction program being implemented by the company.
 Zobrist said the company was analyzing the costs related to its restructuring program and that because of this on-going analysis, the range of the expected loss was not available at this time.
 He said Zonic expected to release its final financial results for the quarter by mid-November.
 Zobrist said, that on a positive note, Zonic was in the process of completing a $2,500,000 debt financing arrangement with A&D Co., Ltd. of Japan, which he said would reduce the company's cash flow problems and position it for improved business as the world economy recovers from the current recession.
 Zobrist indicated that the company anticipates completion of the debt financing in the next two weeks pending bank and director approvals. The financing agreement will grant A&D Co. Ltd. certain operational and financial approvals related to the company's operating budget.
 Commenting on the company's operating loss, Zobrist said it was "due to a sudden drop in new orders during September, causing sales to be below plan for the quarter.
 "The drop in new orders does not appear to be caused by competitive pressures, but rather a postponement of order placements into future quarters, because customers are unsure of the economy and are delaying their buying decisions," Zobrist said.
 "We expect this situation to continue until after the election and possibly into next year when capital purchases are expected to pick up worldwide."
 Zobrist said the company was implementing an aggressive restructuring program to reduce costs.
 He said the program would focus on product development, sales and marketing, and administrative expenditures as well as charges related to European operations and the company's recent financing activities.
 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.
 -0- 10/27/92
 /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:


KK -- CL011 -- 5284 10/27/92 10:19 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Oct 27, 1992
Words:475
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