Defiance, Inc. Anticipates Lower First Quarter Performance, Continues to Expect Full Year Results to Exceed Prior Year

18 September 1997
Defiance, Inc. Anticipates Lower First Quarter Performance, Continues to Expect Full Year Results to Exceed Prior Year

    CLEVELAND, Sept. 18 -- Defiance, Inc. today
announced it anticipates results for its first fiscal quarter ended September
30, 1997 will be slightly better than break-even.  Last year the Company
earned $0.11 in the first quarter.  The Company also said it continues to
expect earnings for the full fiscal year will exceed last year's results.
Defiance had net earnings of $0.67 per share for the fiscal year ended
June 30, 1997.
    Defiance, headquartered in Cleveland, is a supplier of tooling systems,
testing services, and specialty anti-friction bearings and precision-machined
products to the U.S. motor vehicle industry.
    Jerry A. Cooper, president and chief executive officer, said, "We are
experiencing substantially slower business conditions than we anticipated at
the start of the fiscal year.  The automotive industry has seen a significant
lack of new prototype and tooling program releases from the OEMs the past few
months.  Consistent with industry-wide experience, our tooling revenues for
the quarter are running between 15 percent and 20 percent below year-ago
levels.  We are also seeing a decline in testing revenues of between 5 percent
and 10 percent, reflecting scaled-back OEM testing levels.  Sales in our
bearings business have not been affected thus far."
    He continued, "Looking at the full year, we expect new testing and tooling
programs will be released, Chrysler cam follower roller and axle production
will continue to ramp up as anticipated, and operating efficiencies will
continue to improve at our Upper Sandusky plant.  Assuming the year unfolds as
we now see it, we look for substantial improvement in the second quarter
compared with the first, followed by a much stronger second half.  We continue
to believe fiscal 1998 earnings will exceed those of last year."
    This press release contains forward-looking statements within the meaning
of the Private Litigation Reform Act of 1995.  Actual results may differ
materially from anticipated results due to certain risks and uncertainties,
including but not limited to general economic conditions in the markets in
which Defiance operates, fluctuations in the production of vehicles for which
Defiance is a supplier, fluctuations in the level of new model development
activity at Defiance's significant customers, labor disputes involving
Defiance or its significant customers, and other risks detailed from time to
time in Defiance's Securities and Exchange Commission filings.

SOURCE  Defiance, Inc.