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Envirotest to Achieve Strong First Quarter Performances In Both Profitability And Revenues

3 February 1998

Envirotest to Achieve Strong First Quarter Performances In Both Profitability And Revenues

  Company Tells Investors it is Well Poised For Growth For Both Fiscal 1998
                                And Long Term

          - Current Business Backlog at Approximately $920 Million -

    SUNNYVALE, Calif., Feb. 3 -- "Envirotest Systems Corp.
(AMEX: ENR) expects to achieve net income of approximately $625,000, or about
$0.05 per share, compared to a net loss of $6.2 million, or $0.37 per share,
for the first fiscal quarter of a year ago.  The results of the first fiscal
quarter ended December 31, 1997, traditionally the company's weakest quarter,
marks the third quarter in a row in which the company achieved operating
profitability," Chester Davenport, Chairman of Envirotest, today told
investors.
   Mr. Davenport emphasized, "Envirotest's momentum, following its turnaround
initiatives during fiscal 1997, is continuing to build.  For the fiscal 1998
first quarter ended this past December, Envirotest grew revenues more than 18%
over the year ago fiscal first quarter to nearly $37 million compared to
$31.2 million for the 1997 fiscal first quarter.  Furthermore, for the first
quarter of fiscal 1998, Envirotest's EBITDA, or earnings before interest taxes
depreciation and amortization, for the period will be about $14.8 million, up
approximately 95 percent over last year's fiscal first quarter.
    "This year's first quarter, combined with the company's revenue growth and
profitable performances in the two preceding quarters, indicate Envirotest is
ready to capitalize on the growing demand by states and localities to achieve
clean air.  With vehicle emissions representing one of the primary sources of
air pollutants, vehicle emissions testing has become an integral component in
communities' efforts to assure clean air.  As the leading and largest company
in vehicle emissions testing, Envirotest is well positioned in terms of
expertise, resources, contracts and technology to be in the forefront of this
industry both domestically and internationally.  Envirotest's turnaround,
which began during fiscal 1997, reflects a mix of new contracts such as the
10 year $65 million aggregate revenue Indiana contract, expansions of existing
contracts such as the 9 year $385 million aggregate revenue Illinois contract,
and increased cost efficiencies across the company's operations.
    "Moving forward in fiscal 1998, Envirotest's strategy is to continue to
build its presence domestically where it has approximately $920 million in
backlog as well as to establish itself internationally as the premiere vehicle
emissions testing firm.  The company's present contract base provides
Envirotest with a stable revenue stream which is expected to produce revenues
of over $160 million for fiscal 1998, representing at least a 13% increase
over fiscal 1997.
    "In summary, Envirotest is sound financially.  The company has in place a
sizable backlog of business that is producing profitable results.  Committed
to building its value to shareholders, Envirotest has established the
resources and expertise required to take advantage of the growing demand for
clean air and the growth potential of vehicle emissions testing both in the
United States and abroad," Mr. Davenport told the investors.
    Envirotest Systems Corp. is the largest provider of vehicle inspection
services in the country and the only domestic company that provides vehicle
inspection services outside the United States.
    This press release contains statements that are forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934,
which represent the Company's expectations or beliefs concerning future
events.
    The Company cautions that these statements are further qualified by
important factors that could cause actual results to differ materially from
those in the forward looking statements.  A number of such factors are set
forth in the Company's filings with the Securities and Exchange Commission,
including the Company's Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q.

SOURCE  Envirotest Systems Corp.