Net income for the second quarter of 2000, before unusual charges, was $1.6 million, versus $5.7 million for the year-ago quarter on a full tax basis of 36%. Including unusual charges, the company recorded a net loss for the second quarter of 2000 of $1.0 million, equal to $0.04 per share on a diluted basis, as compared to a net income of $0.27 per share on a diluted basis for fiscal 1999.

Diluted earnings per share before unusual charges was $0.06 for the second quarter compared with $0.19 a year ago on a full tax basis of 36 %.

The one-time severance charges total $4.1 million, and are composed of a $3.2-million severance package for the company's former CEO and $0.9 million in other severance costs.

"Although much remains to be accomplished to reach significant, sustainable, and predictable bottom line growth, we are making progress as demonstrated by the performance of a number of our businesses," stated Chairman, President and Chief Executive Officer Robert M. Dutkowsky.

"The sweeping reorganization announced last week sets the stage for improved performance in all our businesses," Dutkowsky added. "We expect this reorganization-and our unrelenting focus on revenues, expenses and growth-to accelerate the reshaping of GenRad and to maximize the company's profitability."

Six Months

For the first six months of fiscal 2000, GenRad reported revenue of $153.7 million, up 32% from $116.7 million for the first six months of fiscal 1999. Excluding acquisitions, revenue increased 20%.

Net income for the first six months of 2000, before a reversal of a portion of the deferred tax valuation allowance and before unusual charges and gains, was $3.9 million, versus $9.8 million for the comparable year-ago six months on a full tax basis of 36%.

After including a reversal of a portion of the deferred tax valuation allowance and unusual charges and gains, net income for the first six months of 2000 was $17.0 million, or $0.60 per share on a diluted basis. For the comparable year-ago period, the company reported net income on a full tax basis of 36% and including a reversal of a portion of the deferred tax valuation allowance, of $14.3 million, equal to $0.49 per share on a diluted basis.

Financial Analysis

"During our last conference call, I promised investors that I would narrow the range of our earnings estimate per share for fiscal year 2000," Dutkowsky said. "Now that I have a 90-day perspective on the company's performance, I believe that our targeted earnings for the year should be in a range from $0.40 to $0.55 per share, as opposed to our previous statement of $0.50 to $0.85."

Looking Ahead

"Our core testing business is sound, with a solid customer base, and we expect it to continue to perform well. Diagnostic operations continue to show high potential, and are making solid progress as they diversify from their sole dependence on the automotive area into other more profitable diagnostic markets.

"Our software solutions are a value-add to customers, one that differentiates us from our competition," Dutkowsky explained. "While strategically important to GenRad, our software business is furthest away from producing satisfactory results, and will receive special focus in the coming months."

"Senior management shares my enthusiasm about our company's future and the steps we're taking." Dutkowsky said. "Our confidence is demonstrated by the board of directors' and management's purchase of the company's stock that's occurred since April."

About GenRad

GenRad, Inc. provides electronics OEMs and their customers with the hardware, software and services to increase productivity by optimizing product design, manufacturing and after-market service. GenRad, headquartered in Westford, MA, offers products and services through its Diagnostic Solutions, Functional Solutions and Process Solutions operations. For more information, visit GenRad's web site. or call its Fax on Demand Service at 800-469-1261.

Safe Harbor Statement

Statements made in this press release which are not historical, including statements regarding future performance, product capabilities and markets are forward looking statements and as such are subject to a number of risks. Factors that may cause results to differ materially from those projected are discussed in GenRad's 1999 Annual Report on Form 10-K for the fiscal year ending January 1, 2000 and form 10-Q for the quarter ended April 1, 2000 under the section "Management's Discussion and Analysis of Financial Conditions and Results of Operations - Factors That May Affect Future Results."

NOTE:
GenRad's second quarter earnings conference call will be held today, Thursday, July 20, at 10 a.m., hosted by GenRad Chairman and CEO, Robert M. Dutkowsky. For the conference call audio Web cast please visit: web cast site.

Contact Information
Richard M. Miles
Vice President, Global Communications
GenRad, Inc.
(978) 589-7144 Phone
(978) 589-2002 Fax