Norand Reports First Quarter Results for Fiscal 1997

Business Wire, Dec 26, 1996

CEDAR RAPIDS, Iowa--(BUSINESS WIRE)--Dec. 26, 1996--Norand Corporation (Nasdaq: NRND), a leading designer, manufacturer and marketer of mobile computing solutions, today reported results for its first quarter of fiscal 1997, ended November 30, 1996.

Revenues of $55.4 million for the first quarter increased 11.3% from revenues of $49.8 million for the first quarter of 1996. Gross profit margins of $23.7 million or 42.8% of revenues increased from $18.8 million or 37.8% of revenues in the first quarter of 1996. Operating expenses totaled $22.3 million or 40.3% of revenues compared to $24.3 million or 48.9% of revenues in the first quarter of 1996. Income from operations for the first quarter was $1.4 million compared to an operating loss of $5.5 million in the first quarter of 1996. The increase in operating income compared to the prior year is due to increased revenues and gross margin percentages combined with lower operating expenses. Interest and other expenses increased to $1.7 million from $1.1 million for the first quarter of 1996. The Company recorded a net loss for the first quarter of $0.2 million or $0.03 per share compared to a first quarter net loss of $4.8 million or $0.63 per share in the previous year.

Bank debt at the end of the first quarter of 1997 was $49.4 million down from $61.2 million in the first quarter of fiscal 1996 and $52.4 million at the end of fiscal 1996. The continued decrease in bank debt has resulted from improved cash flows from operations, which amounted to $5.1 million in the first quarter, and reduced capital expenditures. As previously announced, the Company and its lending group amended its current Credit Agreement, which has been extended through September 30, 1997. Additionally, the Company is pursuing a plan to obtain a new long-term credit agreement to replace its existing Credit Agreement, with terms more advantageous to the Company.

N. Robert Hammer, President, Chief Executive Officer and Chairman, said, "The Company has continued to experience significant growth in revenues and gross margin percentages. Revenues over the past six months have grown at a rate of 14.6% compared to a growth rate of 4.6% for the first three quarters of fiscal 1996. Our gross margins have continued to improve as a result of our product cost reduction initiatives. We have continued to maintain tight control over operating expenses. We have reduced bank debt and plan to obtain a new credit agreement to replace our current credit facility."

"Our goal now is to continue improving the profitability of the business. Our key operating initiatives are now in place. Management is confident that the Company is positioned for improved financial performance in fiscal 1997."

Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that involve risks and uncertainties and actual results could differ materially from expected results. Potential risks and uncertainties include, without limitation, continued pressures in the marketplace, the future need for restructuring, the Company's ability to achieve increased revenues from new products and markets at improved margins, and lower operating expenses.

Shareholders can find additional information about this and other factors which may affect the Company's actual results in the Company's filing with the Securities and Exchange Commission.

Norand designs, manufactures and markets mobile computing systems and wireless data communications networks using radio frequency technology. NORAND(R) systems allow businesses worldwide to apply information technology to industrial and field automation settings. Typical applications include route accounting, field sales automation and inventory database management in manufacturing, warehouse and retail settings. Norand and its partners provide hardware, application software, systems integration and support to thousands of customers in dozens of industries to improve accountability, productivity and management control. Corporate offices are at 550 Second Street Southeast in Cedar Rapids, Iowa. -0-

                          Norand Corporation
                Consolidated Statements of Operations
                        (Dollars in thousands)

                                           Three Months Ended
                                        November 30,  December 2,
                                            1996         1995
                                        (Unaudited)  (Unaudited)
Revenues:
   Product sales revenue                  $44,836      $39,231
   Customer service revenue                10,600       10,575
       Total revenues                      55,436       49,806

Cost of products and services              31,692       30,966

   Gross profit                            23,744       18,840

Operating expenses:
   Product development and
       engineering expenses                 5,174        7,020
   Selling expenses                        12,996       13,126
   General and administrative expenses      4,167        4,201

       Total operating expenses            22,337       24,347

   Income (loss) from operations            1,407       (5,507)

Interest and other expenses                 1,740        1,112

Litigation settlement                          --          300

   Loss before income taxes                  (333)      (6,919)

Income tax benefit                           (100)      (2,076)

   Net loss                                 ($233)     ($4,843)

Net income per common share                ($0.03)      ($0.63)

Average number of common and common
   equivalent shares outstanding        7,664,865    7,663,691