150 Per Cent Earnings Increase Highlights, Norsat's first Quarter Results.

SURREY, BRITISH COLUMBIA--(BUSINESS WIRE)--May 7, 1997--NII NORSAT INT'L (TSE NII., NASDAQ NSATF.) NII Norsat International Inc., building on the record results posted in fiscal 1996, today announced first quarter results highlighted by an earnings increase of 150 per cent.

For the three months ended March 31, 1997, net earnings increased to $701,227 or $0.04 per share, versus $279,994 or $0.01 per share for the comparable three months of last year. Sales also increased by 12 per cent to $15.4 million, from $13.7 million during the same period in 1996.

"Norsat is off to an excellent start in what we expect to be another record year," says Norsat's President and CEO Bruce Chapman. "Our financial performance has exceeded projections and our development of new products with broadened international appeal is ahead of schedule. These results reflect the steps we have taken to ensure increased sales of our higher margin commercial products and our renewed commitment to technological innovation and product development."

During the first quarter, sales of Norsat's commercial products increased by 64 per cent over the same period in 1996. Commercial product sales now comprise 45 per cent of total sales, versus 30 per cent last year.

Our Commercial Products division continued to make strides in expanding its customer base and breaking into potentially significant markets for our high-quality satellite and cable communications products. As part of the federal government's Team Canada trade mission to Southeast Asia in January, Norsat signed an agreement with Samart Cable Systems, establishing this diversified Thai communications company as a distributor of Norsat products, specifically low noise block downconverters (LNBs) and Channel-On- Demand (COD) private cable systems, throughout Thailand and the surrounding region.

In addition to strengthening our leadership position in Asia, we also targeted sales opportunities in South America and, most recently, in India. In doing so, we relied on the blueprint for success we developed in China: hiring technically competent, multi- lingual individuals with extensive contacts and an understanding of local customs and the region's unique business climate. In South America, the efforts of our new sales representative has already resulted in the establishment of a major distributorship in Argentina, focused on supplying Norsat LNBs to telephone and cable companies, and VSAT users.

Sales remained steady for our North American consumer satellite distribution businesses, despite General Instrument's delay in shipping its new digital/analogue 4DTV system, which we had expected to have available for delivery in the first quarter. We continue to project that 4DTV will have a significant impact on sales in both Canada and the U.S. during the remainder of 1997.

Our U.S. subsidiary, Diamond Pacific, Inc. (DPI) continued to diversify its product line by adding Silent Witness surveillance equipment and the TELEtranslator English-to-Spanish broadcast translation device to its product line-up. DPI also opened an office in Dallas bringing its branch network to 11 locations.

"Norsat continues to perform strongly and meet targeted financial goals," adds Chapman. "Given our excellent start, we are very optimistic about 1997." -0-

                  NII Norsat International Inc.
           Summary Consolidated Financial Information
            (Unaudited, in thousands of Cdn. dollars,
           except per share amounts and shares issued)

                                  Three months ended March 31
                                       1997          1996

Sales                               $15,411       $13,746
Earnings before interest, taxes
 depreciation and amortization          948           491
Net earnings                            701           280
Earnings per share                    $0.04         $0.01
Shares issued                    19,788,410    19,753,405

CONTACT: NII Norsat International Inc.

Eduarda Hodgins, 604/ 597-6212

or

NII Norsat International Inc.

Derick Walker, 604/ 597-6283

http://www.norsat.com

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