The Ohio Art Company Reports Operating Results For The First Half Of 1998

Business Wire, August 26, 1998

BRYAN, Ohio--(BUSINESS WIRE)--Aug. 26, 1998--The Ohio Art Co., (ASE:OAR), today announced operating results for the first half ended July 31, 1998.

Net sales increased 37.8 percent from $12,982,000 for the six months ended June 30, 1997, to $17,891,000 for the six months ended July 31, 1998. Approximately 50% of the 1998 shipments resulted from 1998 new product introductions, such as the Betty Spaghetty(TM) fashion doll, Water T-Ball(TM) outdoor water toy, Bull Frogg(TM) interactive plush and Giggle Writer(TM) drawing toy. Domestic and international toy sales have both contributed at least 40% increases in shipments during the period.

A net profit was experienced for the second quarter amounting to $301,000 or $.34 per share, on 892,000 average shares outstanding, versus a net loss of $2,364,000 or $2.60 per share, on 908,000 average shares outstanding during the quarter ended June 30, 1997. All operating units further contributed to the positive results by improving gross margins and controlling operating costs.

Net loss for the six months ended July 31, 1998 amounted to $607,000, or $.68 per share on 892,000 average shares outstanding versus a net loss of $3,587,000, or $3.94 per share, on 911,000 average shares outstanding during the six months ended June 30, 1997. The Diversified Products Division's rate of sales increase slowed during the second quarter, as demand for metal lithography flattened out, but operating profit more than doubled on the strength of both a solid performance by Strydel Inc., the company's injection molding subsidiary, and the favorable production and cost savings which resulted from the recent expansion of our metal decorating capability and material handling systems.

Established in 1908 and headquartered in Bryan, Ohio, The Ohio Art Company manufactures and markets the world famous Etch A Sketch(R) drawing toy, as well as a complete line of toys that enhance and provide development, creativity and positive reinforcement. Product lines include "Making Creativity Fun" activity toys such as Etch A Sketch(R), Glitter Writer(R), Zooper(TM) Sounds Etch A Sketch(R), Betty Spaghetty(TM) doll and Spray FX Power Airbrush(TM). In addition, the company's Diversified Products Division manufactures specialty plastic and lithographed products for the automotive, photographic, food container and specialty premium markets. -0-

               THE OHIO ART COMPANY AND SUBSIDIARIES(a)
                  (Thousands Except Per Share Data)

                         Six Months Ended           Three Months Ended
                      7/31/98      6/30/97      7/31/98        6/30/97

Net Sales            $ 17,891     $ 12,982     $ 11,605      $  6,871

Profit (Loss) Before
  Income Taxes           (607)      (4,783)         301        (2,902)

Tax Credit                  0        1,196            0           538

Net Profit (Loss)        (607)      (3,587)         301        (2,364)

Net Profit (Loss) Per
  Share                  (.68)       (3.94)         .34         (2.60)

Average Shares
  Outstanding             892          911          892           908

(a)  Unaudited and subject to year-end adjustments.

CONTACT: The Ohio Art Company, Bryan

Paul R. McCusty

419/636-3141

or

Ron Como & Associates Inc., New York

212/227-3010