SMS Reports Financial Results

22 December 1997

    AUSTIN, Texas, Dec. 22 -- Scientific Measurement Systems
(OTC Bulletin Board: SCMS) (SMS) today announced results for fiscal year end
1997, ended July 31, 1997.
    Revenues for fiscal 1997 were $3,724,000, an increase of 17.7% compared
with revenues of $3,165,000 for fiscal 1996.  Net income decreased
substantially compared to the previous year, from $277,000 in fiscal 1996 to a
loss of $1,121,000 in fiscal 1997.
    "Though the Company faced many challenges in fiscal 1997, we were able to
show positive revenue growth and make significant inroads into crucial
commercial markets," stated Howard L. Burris Jr., President and CEO of SMS.
"Gross margins remain unacceptable, but we have already begun making progress
on better managing quotes and controlling project costs.  With increased
demand on scanning services, we will also be focused on improving the
throughput of that critical segment of our business."  Mr. Burris noted that
systems backlog continues to demonstrate healthy demand for SMS' new
SmartScan(TM) CT machines.
    Mr. Burris also commented that the Company's new senior management is
focused on significantly expanding their presence in the automotive and
aerospace markets, and sees considerable customer demand for their software
analysis tools, scheduled for full commercial release in the current fiscal
year.
    The Company also announced its intent to hold its Annual Meeting on
Thursday, January 29, 1998 in the Austin Room of the Omni Hotel (700 San
Jacinto Street, Austin) at 10:30 A.M.
    SMS designs, manufactures, and sells industrial CT equipment and services
to a world wide customer base. The company is a recognized leader in the
development and commercialization of CT technology. SMS is a public company
traded on the OTC Bulletin Board under the symbol SCMS.

    Selected Data from Consolidated Financial Statements

                                             3 months ended 7/31/97
                                           1997                  1996

    Revenue                              $361,000              $840,000
    Net Income (Loss)                   ($904,000)              $18,000
    Net Income (Loss) per Share             ($.04)                 $.00

                                               Year ended 7/31/97
                                           1997                  1996

    Revenue                            $3,724,000            $3,165,000
    Net Income (Loss)                 ($1,121,000)             $277,000
    Net Income (Loss) per Share             ($.05)                 $.01

SOURCE  Scientific Measurement Systems