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Sheldahl Expects to Report Revenue Growth in Line With Expectations

21 October 1999

Sheldahl Expects to Report Revenue Growth in Line With Expectations; Fourth Quarter Loss Greater Than Anticipated

    NORTHFIELD, Minn., Oct. 21 -- Sheldahl, Inc.
said today that it expects to report record sales for its fourth quarter ended
August 27, 1999, in line with expectations.  Sales are expected to slightly
exceed that of the third quarter which ended May 28, 1999, when sales rose to
$32.6 million; fourth quarter sales are expected to demonstrate strong
progress over last year's fourth quarter sales of $28.4 million.
    Despite the record sales, the Company expects a greater loss than
originally anticipated due, in part, to temporary increases in a number of
operating expenses.  More specifically, in the fourth quarter research and
development expenditures for future product development increased, freight and
contract labor charges for outside manufacturing rose and maintenance expenses
increased.
    Sheldahl's Micro Products business continued to make progress with sales
growing to approximately $700,000 in the fourth quarter compared with third
quarter sales of $211,000 and backlog entering Q1 reaching $1.2 million.  This
reflects growing market demand for two metal-layered tape that is increasingly
being used as dies shrink and increased density is demanded for more
sophisticated, smaller scale electronics.
    In addition, a charge largely related to unutilized fixed assets will
negatively impact results by approximately $8.1 million.  This action, which
was ratified by the Board of Directors at an October 21, 1999 meeting, is
necessary to remove production equipment at Longmont and information
technology systems and software that were deemed by management during the
quarter to have no future production value.
    Edward L. Lundstrom, President and Chief Executive Officer, stated,
"During the fourth quarter Sheldahl achieved its overall sales objective,
continued to invest in new products and research and development.  Throughout
the past year, we took aggressive steps to optimize the cost reduction taken
during late 1998 and 1999 and to optimize cash flow, setting the stage for a
return to profitability.  Sheldahl enters 2000 with a solid business plan,
strong products, expanded marketing capabilities, enhanced business processes
and a stronger organization.  We are excited about the opportunities ahead."
    The Company expects to release official figures Monday, October 25, 1999.
    Sheldahl is a leading producer of high-density substrates, high quality
flexible printed circuitry, and flexible laminates primarily for sale to the
automotive electronics and data communications markets.  The Company, which is
headquartered in Northfield, Minn., has operations in Northfield; Longmont,
Colo.; Detroit, Mich.; South Dakota; Toronto, Ontario, Canada; and Chihuahua,
Chih., Mexico.  Its sales offices are located in Hong Kong, China; Singapore;
and Mainz, Germany.  Sheldahl's common stock trades on the Nasdaq National
Market tier of the Nasdaq Stock Market under the symbol: SHEL.  Sheldahl news
and information can be found on the World Wide Web at http://www.sheldahl.com
    Statements contained herein, other than historical data, may be
forward-looking and subject to risks and uncertainties including, but not
limited to, those set forth in the Company's annual report, 10-K, 10-Q's and
other SEC filings.