Harmon Industries NASDAQ: HRMN For Immediate Release

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

Harmon Industries Posts Record Year In Sales And Earnings

Blue Springs, MO. (Tueday, February 4, 1997) -- Harmon Industries, Inc. today announced financial results for 1996.

In the fourth quarter, sales increased 53 percent to $56 million compared with $36.5 million in 1995. Net earnings increased 14 percent to $2.1 million for the quarter compared with $1.8 million in 1995. Earnings per share increased 15 percent to $0.31 from $0.27 in 1995.

Sales increased 28 percent in fiscal year 1996 to $175.4 million from $136.8 million in 1995. Net earnings for the year were $9.3 million compared with $6.9 million in 1995, an increase of 36 percent. Earnings per share were $1.36 in 1996, compared with $1.01 in 1995, an increase of 35 percent.

"1996 was a great year for Harmon. We enjoyed record sales and earnings, which is exceptional when you consider the downward general trends in the rail-supply industry," said Björn E. Olsson, president and chief executive officer of Harmon Industries. "Our strength is a result of the technological leadership Harmon has in the rail-supply industry, and the partnership approach to customer service we implemented as part of our long-term growth strategy."

In fiscal 1996, Harmon experienced major increases in demand for its asset management services and in orders for the company's train control and signaling systems. Vaughan Harmon Systems Ltd. in Ware, England, a July 1996 acquisition, also added to the company's third and fourth quarter volume.

During 1996 Harmon celebrated the 50th anniversary of its founding, as well as a number of significant accomplishments. • Harmon completed its portion of the design, rebuilding and installation of the new signaling system used in the Chicago Transit Authority Green Line Rehabilitation project.

• Harmon was selected to design and build the train control system for the Hudson-Bergen Light Rail Transit System to be used on the New Jersey Transit line.

• Harmon successfully demonstrated its Incremental Train Control System (ITCS) for high-speed carrier applications in a joint project between Amtrak, the Federal Railroad Administration and the Michigan Department of Transportation.

• Harmon made a number of acquisitions, which will help penetrate new markets, strengthen and broaden its product line, and further strengthen its engineering capabilities.

• Three of Harmon's facilities received ISO certification, including TickIt certification for software engineering.

• Harmon was selected by the Florida Overland eXpress consortium as the signaling and train control system supplier for its high-speed rail project between Miami, Orlando and Tampa Bay.

• The company reorganized from a subsidiary-based company into one organized by functional areas to better serve its customers.

Harmon Industries, Inc., is a leading supplier of signal and train control products to railroads and transit systems throughout North America and the world. Its stock 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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