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ZONIC POSTS 2ND QTR LOSS DUE TO SALES DECLINE & NON-RECURRING CHARGES

 CINCINNATI, Nov. 23 ~PRNewswire~ -- Zonic Corporation (NASDAQ: ZNIC) reported a substantial loss for its fiscal second quarter due to a significant decline in sales and a non-recurring charge related to an aggressive company-wide restructuring and cost reduction program.
 Gerald J. Zobrist, president and chief executive officer, attributed the sales decline to a continuing slowdown in the world economy which he said is impacting Zonic both in the U.S. and abroad.
 "Our products are capital intensive - and this is a segment of the economy that has been particularly hard hit," the Zonic CEO noted. He said the decline in the company's business "does not appear to be caused in the main by competitive pressures, but more a postponement of potential orders into future quarters."
 He said the restructuring and cost reduction program was designed to help the company "maximize results when the economy eventually improves."
 Zobrist noted too that Zonic was continuing to negotiate a $2,500,000 debt financing arrangement with A&D Co., Ltd. of Japan which "should reduce Zonic's serious cash flow problems and assist us in our recovery."
 He said that, "if obtained, the financing agreement will grant A&D Co. Ltd. certain operational and financial controls related to Zonic's operating budget and give A&D options to purchase substantial amounts of Zonic common stock.
 For the three months ended September 30, 1992, Zonic had a loss of $1,856,339 or 59 cents per share compared to a profit of $179,985 or 6 cents per share in the comparable year-ago period. The loss includes non-recurring charges of $1,336,876 or 43 cents per share for restructuring and bad debt reserves.
 Sales for the three months were $1,758,855 compared with $2,856,022 in the period last year.
 For the six months ended Sept. 30, 1992, Zonic reported a loss of $1,823,177 or 58 cents per share on sales of $4,000,855 compared with net profit of $291,919 or 9 cents per share on sales of $4,825,382 in the comparable year-ago period.
 AGGRESSIVE ACTIONS
 Commenting on the company's write-offs and non-recurring charges during the second quarter, Zobrist said Zonic is taking aggressive steps to pare down overhead and reduce expenses.
 "We're not alone in being impacted by the world-wide recession," Zobrist said, "but we're instituting far-reaching measures as far as our company is concerned to help us compete better during these difficult times, and to prepare us for improvements in the business cycle when they come."
 The company's non-recurring restructuring charges total $896,876 for software write-offs, financing costs and Zonic's reduction-of force- program. In addition, there are non-recurring charges of $440,000 relating to a reserve for long overdue receivables from the company's European affiliate.
 QUALITY PRODUCT LINE
 Zobrist said that the current situation, "while difficult," is "nevertheless manageable. We feel confident that our quality product line and state-of-the-art technology will enable us to compete effectively in this most difficult business period.
 He said he expected the worldwide recession to continue for the remainder of the year, and possibly into next year, after which he expected capital purchases to pick up worldwide.
 He said the company's cost reduction program would focus on product development, sales and marketing, and administrative expenditures.
 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
 CONSOLIDATED INCOME STATEMENT DATA
 (unaudited)
 Three Months Ended
 9~30~92 9~30~91
 Revenue:
 Products & Services $1,648,100 $2,485,540
 Development Contracts, Other 110,755 370,482
 Total 1,758,855 2,856,022
 Operating & Other Expenses 2,278,318 2,676,037
 Non-Recurring Restructuring
 Expenses 896,876 ---
 Non-Recurring Bad Debt
 Expense-Affiliate 440,000 ---
 Earnings (loss) (1,856,339) 179,985
 Earnings per share $ (0.59) $ 0.06
 Weighted Average Shares 3,121,869 3,194,935
 Backlog of Orders 1,560,000 3,256,000
 ZONIC CORPORATION
 CONSOLIDATED INCOME STATEMENT DATA
 (unaudited)
 Six Months Ended
 9~30~92 9~30~91
 Revenue:
 Products & Services $3,762,625 $4,151,996
 Development Contracts, Other 238,230 673,386
 Total 4,000,855 4,825,382
 Operating & Other Expenses 4,487,156 4,533,463
 Non-Recurring Restructuring
 Expenses 896,876 ---
 Non-Recurring Bad Debt
 Expense-Affiliate 440,000 ---
 Earnings (loss) (1,823,177) 291,919
 Earnings per share $ (0.58) $ 0.09
 Weighted Average Shares 3,121,869 3,194,935
 Backlog of Orders 1,560,000 3,256,000
 -0- 11~23~92
 ~CONTACT: T. Clay Lehmann, treasurer & chief financial officer, 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

BM -- CL016 -- 0596 11~23~92 13:40 EST
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Date:Nov 23, 1992
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