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Productivity Technologies Corp. Announces Second Quarter Results

8 February 1999

Productivity Technologies Corp. Announces Second Quarter Results

                      Earnings Per Share at 3 Cent Loss

    NEW YORK, Feb. 8 -- Productivity Technologies Corporation
announced today consolidated operating results for its second
fiscal quarter and for the six months ended Dec. 31, 1998.
    The company reported sales of $7.8 million for the second quarter of
fiscal 1999, compared to $11.3 million in the comparable period a year
earlier, a decrease of 31 percent.  The decrease reflects abnormally low order
closings and delays of certain key projects during the first half of the year.
The lower sales adversely affected gross profits which decreased to
$1.9 million in the quarter from $3.5 million a year earlier, and gross
margins which decreased to 24 percent in the quarter, from 31 percent a year
ago.
    Sales are projected to increase during the second half of the year as a
result of anticipated increased order closings in the near term.  An
acceleration in order closings could grow the current $12 million backlog to a
range in excess of $20 million in the course of the 3rd and 4th quarters.  The
increased revenues, with recent cost reductions, are expected to benefit
earnings in the second half of the 1999 fiscal year.
    For the quarter ended December 31, the company incurred a net loss of
$76,885, compared to earnings of $424,233 in the quarter last year.  For the
first half of fiscal 1999, net earnings were $112,535, compared to $590,078 a
year earlier.  Earnings per share were a loss of 3 cents in the quarter,
compared to income of 20 cents last year.  For six months, earnings per share
were 5 cents, compared to 28 cents a year earlier.

                    Quarter        Quarter      Six Months     Six Months
                     Ended          Ended          Ended          Ended
                   Dec. 1998      Dec. 1997      Dec. 1998      Dec. 1997

    Net Sales     $7,849,570    $11,336,341    $16,000,252    $20,688,827
    Gross Profit  $1,899,766     $3,462,552    $ 4,377,698    $ 6,179,958
    Oper. Inc.    $   27,513     $  789,438    $   473,021    $ 1,239,290
    Pre-Tax Inc.  $ (116,224)    $  596,233    $   158,196    $   872,578
    Net Income    $  (76,885)    $  424,233    $   112,535    $   590,078
    Primary EPS*  $    (0.03)    $     0.20    $      0.05    $      0.28
    (undiluted)

    *  1997 total number of shares outstanding -- 2,125,000
    *  1998 total number of shares outstanding -- 2,425,000

    Cautionary Statement Under the Private Litigation Reform Act of 1995
    Statements of this Press Release may constitute "Forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 that are based on the beliefs of the company and its management.  Any
statements contained herein which are not historical facts or which contain
the words expect, believe, project, estimate, anticipate and similar
statements shall be deemed forward-looking statements.