Lancer Corporation (Amex: LAN) announced results of operations for the second quarter and six months ended June 30, 2000.

The Company reported second quarter earnings of $806,000, or $0.09 per diluted share, compared to $1,450,000, or $0.16 in the second quarter of 1999. Net sales were $31,551,000 in the second quarter of 2000, down from $38,072,000 in the second quarter last year.

Net earnings for the first six months of 2000 were $1,121,000, or $0.12 per diluted share, compared to net earnings of $2,901,000, or $0.31 per diluted share, in the same period last year. Net sales for the first half of 2000 were $59,280,000, versus $74,300,000 in the first half of 1999.

Sales were strong in Europe and the Pacific region. North American revenue declined principally because of lower sales of frozen beverage equipment, which faced a difficult comparison with the second quarter of 1999. The Company's business in Asia and Latin America continued to suffer from weak market conditions.

George F. Schroeder, Lancer's President and CEO, commented: "Our sales decline relative to last year's second quarter was driven by a decline in sales of frozen beverage dispensers. Excluding the frozen business, our sales were roughly flat. Improved performance by our manufacturing group and a favorable sales mix helped raise our gross margin. Selling, general and administrative expenses rose from the second quarter last year primarily because of new product development and expenses associated with our new ABS distribution subsidiary in Chicago.

"The second quarter is generally our strongest quarter of the year. While there are signs that our business has bottomed out in certain segments and regions, we expect industry conditions to remain difficult for the remainder of 2000."

Lancer is a leading manufacturer and distributor of beverage dispensing equipment and related parts and components serving customers worldwide. The Company, headquartered in San Antonio, Texas, has manufacturing facilities in San Antonio, Texas; Adelaide, Australia; Sao Paulo, Brazil; and Piedras Negras, Mexico. Lancer operates distribution centers in Chicago, Illinois; Sydney, Australia; Brussels, Belgium; Quito, Ecuador; Monterrey, Mexico; Auckland, New Zealand; and Moscow, Russia.

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company cautions investors that any forward-looking statements or projections made by the Company, including those made in this document, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, uncertainties related to economic conditions and market demand for the Company's products.


LANCER CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

ASSETS

June 30, December 31,
2000 1999
(Unaudited)
Assets:
Cash $ 830 $ 1,227
Net receivables 20,562 17,606
Total inventories 38,887 36,166
Other assets 45,140 48,055
Total assets $ 105,419 $ 103,054

LIABILITIES AND SHAREHOLDERS' EQUITY

June 30, December 31,
2000 1999
(Unaudited)
Liabilities:
Accounts payable $ 9,592 $ 9,119
Debt 36,718 36,605
Other liabilities 13,814 12,312
Total liabilities $ 60,124 $ 58,036

Minority interest 406 542

Shareholders' equity 44,889 44,476

Total liabilities and
shareholders' equity $ 105,419 $ 103,054

LANCER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in thousands, except share data)

Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999

Net sales $ 31,551 $ 38,072 $ 59,280 $ 74,300
Cost of sales 23,395 30,498 44,887 58,658
Gross profit 8,156 7,574 14,393 15,642

Selling, general and
administrative expenses 6,093 5,355 11,085 10,548

Operating income 2,063 2,219 3,308 5,094

Other expense (income):
Interest expense 802 896 1,468 1,804
Other income, net (171) (995) (153) (1,535)
631 (99) 1,315 269

Income before
income taxes 1,432 2,318 1,993 4,825

Income tax expense 626 868 872 1,924

Net earnings $ 806 $ 1,450 $ 1,121 $ 2,901

Common Shares and
Equivalents Outstanding:
Basic 9,124,857 9,121,482 9,124,857 9,121,482
Diluted 9,263,726 9,283,841 9,283,900 9,313,484

Earnings Per Share:
Basic $ 0.09 $ 0.16 $ 0.12 $ 0.32
Diluted $ 0.09 $ 0.16 $ 0.12 $ 0.31

Contact: Scott Adams
Lancer Corporation
210-310-7065