Harmon Industries NASDAQ: HRMN For Immediate Release

Charles M. Foudree (816) 229-3345 [email protected]

Pretax Earnings Double

Harmon Announces Record Sales, Orders and Earnings for 1998 First Quarter

BLUE SPRINGS, MO. (Thursday, April 30, 1998) -- Harmon Industries, Inc. announces all-time first quarter record sales, orders and earnings for the quarter ended March 31, 1998.

First quarter sales were $60.6 million, an increase of 68 percent from $36.0 million in the first quarter of 1997. Net earnings were $2.8 million for the first quarter, compared to $1.4 million a year ago, an increase of 94 percent. Earnings per share, both basic and diluted, were $.27 for the quarter, versus $.14 for the same quarter last year.

Orders increased to an all-time first quarter high of $77.5 million, a 67 percent increase from the first quarter of 1997. The company's backlog of orders was $89.4 million, up from $70.2 million at the same time last year, an increase of 28 percent.

Harmon's record order pace continues to be driven primarily by the North American freight railroad market. Railroad mergers have increased market demand for services and products as the railroads' operating systems are consolidated.

Harmon's impressive performance reflects the strength in the North American railroad market, merger-related improvements in the industry and a robust economy. Additional factors in the first quarter success are attributed to strong order trends in the grade crossing protection portion of Harmon's business, some of which may represent business deferred in 1997.

"The excellent first quarter that Harmon has achieved indicates good conditions in all facets of the rail industry," said Björn E. Olsson, president and chief executive officer. "Certainly, we are pleased with Harmon's performance and believe it reflects the success of our long-term strategy to provide exceptional services and technological excellence. Our performance in the first quarter reinforces our confidence that we will perform strongly for the 1998 year as whole."

Harmon Industries, Inc., a leading supplier of signal, inspection and train control products to railroads and rail 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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