Computone: Earnings News Release PRESS RELEASE Computone Investor Relations: Dianne Will FOR IMMEDIATE RELEASE (214) 954-9300, FAX: (214) 954-9333 Computone Media Contact: Dave Arner (770) 475-2725 x280, FAX: (770) 664-1410 Computone Reports Fiscal Year 1997 Sales Up 33% ROSWELL, GA.--Computone Corporation (NASDAQ:CMPT), a leading designer and manufacturer of remote access hardware and software solutions, today reported results for its fiscal year ended April 4, 1997. Sales in fiscal year 1997 increased 33% to $12.9 million from $9.7 million in fiscal year 1996. Net income was $49,000, or $.01 per share in fiscal 1997 compared with a loss of $2.3 million, or $.35 per share in fiscal 1996. Tom Anderson, Computone's Chief Executive Officer and President, commented, "We were very pleased with our sales growth during fiscal 1997. We believe we have successfully made the transition of our sales focus to the higher growth opportunities in the Internet and Intranet marketplace. Sales of remote access products increased to $4.4 million, or 34% of revenues during fiscal 1997 versus $2.2 million, or 23% of revenues during fiscal 1996. In addition, sales to corporate accounts and OEM's, such as Wal-Mart and Data General, continued to grow during fiscal 1997 and we expect this sales momentum to continue during fiscal 1998. While corporate and OEM sales are major growth opportunities for the Company, these sales channels are typically more volatile than our traditional sales channels...VARs, distributors and Internet Service Providers (ISP's)" The Company was also able to report a profit this year which is a tremendous accomplishment compared to the loss reported last year. All areas of the Company were strengthened during the fiscal year. This can be attributed to a 79% increase in our gross margin dollars from $3.0 million in fiscal 1996 to $5.4 million in fiscal 1997, or 31% of revenues in fiscal 1996 to 42% in fiscal 1997. Also, there was a reduction in our selling, general and administrative costs as a percentage of net revenues from 41% of revenues in fiscal 1996 to 33% of revenues in fiscal 1997. Two brand new products were introduced during the past year, the Power RackPort and the PowerSurfer, an ISDN Terminal Adapter. Both products offer the fastest data transmission speeds in the industry, an unsurpassed 921.6 Kbps. Shipments of the Power RackPort started in the fourth quarter and we expect to begin shipping the PowerSurfer in July, 1997. In addition, a vastly enhanced version of the PowerRack, our remote access communications server, version 1.5, began shipping in February, 1997. These new products, coupled with our focus on the Internet and Intranet markets will allow for the continuation of the strong sales momentum that the Company experienced during the past fiscal year." Note: The forward looking statements included above are based on current expectations, however actual results may differ materially due to risks and uncertainties including: changes in business and economic conditions, competition, product shortages, and the risk factors listed in the reports that Computone files with the Securities and Exchange Commission, including the most recent Form 10-QSB filed February, 1997. Established in 1984, Computone offers an extensive line of Ethernet, remote access/Internet communications servers, multi-port solutions for PCI, ISA, and EISA computer systems; and UNIX-to-SNA/X.25 connectivity solutions. Computone is located at 1100 Northmeadow Pkwy, Roswell, GA 30076. To reach Computone Sales: call (800) 241- 3946 or (770) 475-2725, Facsimile: (770) 664-1510, email: sales @ computone.com or visit our Web site - http://www.computone.com. Consolidated Statements of Operations (in thousands except per share amounts) Fiscal Year Ended April 4, April 5, 1997 1996 Revenues: Product sales $ 12,898 9,665 Cost of products sold 7,484 6,640 Gross Margin 5,414 3,025 Expenses: Selling, general and administrative 4,215 3,934 Product development 1,065 1,294 5,280 Operating income from continuing operations 134 (2,203) Non-Operating income (expense): Other income (expense) 31 8 Interest expense (116) (112) Income from continuing operations before taxes 49 (2,307) Income tax expense (benefit): Current - - - - Deferred - - - - - - - - Net Income 49 (2,307) Preferred stock dividends - - (32) Net income applicable to common stock $ 49 (2,339) Net income per common share and common share equivalents $ 0.01 (0.35) Weighted average common shares and common share equivalents outstanding 7,020 6,502 End