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OEA Announces Second Quarter Earnings Expectations

6 February 1998

OEA Announces Second Quarter Earnings Expectations

    DENVER, Feb. 6 -- OEA, Inc. today reported the
following:
    Charles B. Kafadar, President and Chief Executive Officer, announced that
second quarter sales and earnings will fall below analysts' expectations due
mainly to shortages from a parts supplier and, to a lesser extent, to delays
in reaching target efficiencies on the recently installed inflator production
lines.  The Company believes appropriate steps are in place to obtain ample
supplies of parts and to achieve projected efficiencies by the end of the
third quarter.
    Sales for the second quarter are expected to exceed $59 million, resulting
in anticipated net earnings of $4.5 to $5.0 million with EPS of $.22 to $.24.
Final results for the quarter will be released the last week in February.
Demand for the company's products remains strong as inflator backlogs continue
to grow.  Strong sales and planned cost improvements are expected to result in
significantly improved earnings by the fourth quarter.
    Dr. Kafadar also announced that OEA anticipates immediate adoption of the
AICPA:s new proposed accounting standards for start-up costs, pending final
AICPA approval which is expected to be in OEA's fiscal third quarter.  If the
proposal is adopted in its current form, it will result in a one-time charge
to earnings of approximately $12 million (after tax), or $.58 per share.  This
charge to earnings will eliminate yearly amortization of approximately $.11
per share for the next five years.
    OEA is a leading manufacturer of air bag initiators and a major supplier
of air bag inflators.  OEA is also a leader in the development and production
of personnel escape systems for military aircraft and high-reliability devices
for missile and space applications.
    The information set forth above includes "forward-looking" statements for
purposes of the federal securities laws.  Reference is made to the cautionary
statements under the caption "Forward-Looking Statements" in OEA's Annual
Report on Form 10K for the year ended July 31, 1997 for a description of
various factors that might cause OEA's actual results to differ materially
from those contemplated by such forward-looking statements.

SOURCE  OEA, Inc.