Harmon Announces First Quarter Results

BLUE SPRINGS, Mo. (Tuesday, April 29, 1997) -- Harmon Industries, Inc. today announced first quarter results for the period ended March 31, 1997.

Net sales for the first quarter were $36 million compared to $38.4 million in the first quarter of 1996. Net earnings were $1.4 million for the period ended March 31, compared with $2.1 million a year ago. Earnings per share were $0.21 in the first quarter of 1997, compared with $0.30 for the same period in 1996.

"As expected, we fell short of the record first quarter results set in 1996," said Björn E. Olsson, president and CEO of Harmon Industries, Inc. "However, we have a bright outlook for the remainder of this year and beyond. In fact, as a result of our order rate and related growing backlog, we are in the process of adding staff and manufacturing resources to meet increasing demand."

Olsson noted that the lower sales volume in the first quarter was the principal reason for the earnings decrease. Lower sales volume primarily resulted from the interruption of capital expenditures from several major railroads in merger negotiations. Severe weather including the adverse winter conditions in the North and flooding in the Northwest also negatively impacted deliveries.

Harmon's order bookings for the first quarter were a record $46.6 million, a 33 percent increase from the first quarter of 1996. Olsson said that this is an indication of the strong market conditions under which Harmon currently is operating, and that these conditions are expected to continue throughout 1997.

The Harmon backlog currently is at a record level of $70.2 million, which is nearly $30 million higher than at the end of first quarter 1996.

Olsson also said the international market continues to provide opportunities for Harmon. The company's British subsidiary, Vaughn Harmon Systems, Ltd., recorded yet another strong quarter with orders of $5.4 million. According to Olsson, the aggressive capital investment program underway on the railway systems in the United Kingdom is the leading driver of Harmon's growth in the international market.

In response to increasing customer demand, Olsson said the company is set to begin construction of a major addition to its manufacturing facility in Grain Valley, Mo. later this week. Harmon also is completing negotiations for the acquisition of an additional manufacturing facility in Warrensburg, Mo.

Harmon Industries, Inc., a leading supplier of signal and train control products to railroads and transit systems throughout North America and the world, is traded on the Nasdaq Stock Market under the symbol "HRMN." For further information, please contact Charles M. Foudree, executive vice president-finance and chief financial officer, Harmon Industries, Inc., 1300 Jefferson Court, Blue Springs, MO 64015. The telephone number is (816) 229-3345.

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