PSC Expects Strong First Quarter Results; Completes Consolidation of Some Manufacturing Operations

Business Wire, March 19, 1999

ROCHESTER, N.Y.--(BUSINESS WIRE)--March 19, 1999--PSC Inc. (Nasdaq: PSCX), a leading manufacturer and marketer of bar code scanners, today announced that it expects earnings for the first quarter ending April 2, 1999 will be in the range of $0.22 to $0.25, before special charges, well above analysts' consensus estimate of $0.19, as reported by First Call. The Company anticipates revenues will be in the range of $57 million to $59 million, reflecting strong sales of Magellan SL(tm) Scanners and U-Scan(R) Express Self-Checkout Systems.

The Company also announced plans to complete the consolidation of all high volume handheld scanner manufacturing at its Eugene, Oregon facility over the next four months. In the second half of 1997, the Company adopted a new operating plan that focused the Eugene plant solely on high volume production and the Webster manufacturing facility on producing lower volume, customized products and systems.

The planned consolidation will include transferring production of the 5300 Handheld Bar Code Scanner line, currently manufactured in Webster, New York. The Webster plant will continue to develop and manufacture customized high-speed unattended scanners and multi-sided scanning tunnel systems for automated materials handling and sortation applications; U-Scan(R) Express Self-Checkout Systems; bar code verifiers; and digital imaging products. To support this consolidation, the Eugene organization will add approximately 90 positions and approximately 120 people will be released in Webster.

"Even though the decision to complete the streamlining of our manufacturing operations is difficult because it affects a significant number of employees, it will enable PSC to further reduce costs and more effectively increase unit production to support our higher level of sales," said Robert C. Strandberg, PSC's President and Chief Executive Officer. "We will continue to focus on operating efficiently while investing strategically in new product development, marketing and other growth drivers to produce even better results that will enhance value for our shareholders. I am pleased with the excellent progress we've made this quarter to meet our 1999 goals for sales and earnings growth."

Strandberg said that in addition to the transfer of some product manufacturing from Webster to Eugene, PSC plans to consolidate all remaining Webster manufacturing at its headquarters facility at 675 Basket Road and exit leased space in Webster.

PSC expects to announce complete financial results for the first quarter ended April 2, 1999 on April 26, 1999. The Company said that it expects to record a pre-tax charge for the consolidations of approximately $2.1 million or $0.10 per share after tax. The manufacturing consolidations will result in annualized savings of approximately $1.5 million.

PSC Inc. is a leading manufacturer and marketer of bar code scanning and automatic data collection solutions of the highest quality and exceptional reliability. Its broad range of products includes a line of laser and non-laser based handheld and fixed position bar code scanners, bar code engines and verifiers and automated carton dimensioning systems. These products are used in automated data collection solutions in the retail, manufacturing, warehousing, logistics and package handling markets. Headquartered in the Rochester, New York, suburb of Webster, PSC has manufacturing facilities in Webster and Eugene, Oregon. PSC has sales and service offices throughout Europe, Asia, Australia and the Americas.

The forward-looking statements contained in this release are based on estimates of future performance and are highly dependent upon a variety of factors that could cause actual results to differ materially from these estimates. These factors include the market acceptance of products, competitive product offerings and pricing pressures, the ability to control manufacturing and operating costs, foreign currency and interest rate fluctuations and the disposition of legal issues. Reference should be made to filings with the Securities and Exchange Commission for further discussions of factors that could affect PSC's future results.

PSC's internet address is: http://www.pscnet.com