Aavid Thermal Technologies Third Quarter Sales Increase 70% to $43.7 Million; EPS $0.25 vs. $0.10.

CONCORD, N.H.--(BUSINESS WIRE)--Oct. 21, 1997--Aavid Thermal Technologies Inc. (NASDAQ:AATT) today reported third quarter 1997 revenues of $43.7 million, an increase of 70 percent over third quarter 1996 sales of $25.7 million.

Earnings per share for the third quarter of 1997 were $0.25 based on $2.2 million of net income, compared to $.10 on $0.8 million of net income for the same quarter a year earlier.

Aavid Chairman and CEO Ronald F. Borelli said, "The third quarter presented exciting growth opportunities for Aavid's thermal management solutions, particularly in the computer segment of our business where more powerful microprocessors began to enter the market in higher volumes. We believe this momementum will carry through the fourth quarter and into 1998 as we continue to position Aavid for increased marketshare through global expansion of our production capacity and strategic customer relationships.

"We are also pleased to report that our Applied Thermal Technologies design service business continues to grow -- confirming our view that the demand for outsourcing of thermal management solutions will accelerate with the rapidly increasing thermal management challenges facing the electronics industry. We believe that Aavid is uniquely positioned to take advantage of this opportunity, by providing our customers with the total thermal solution: thermal analysis through Fluent's software tools; thermal design and validation through Applied Thermal Technologies' design and test services; and local fabrication through Aavid Thermal Products' global manufacturing and distribution.

"We are also pleased to announce our acquisition of the remaining 49 percent of our Taiwanese joint venture. This acquisition greatly increases Aavid's presence in one of the most important manufacturing regions in the world. The significance of the region to our thermal products business had already proven itself with the initial success of the joint venture. We intend to expand our technology and manufacturing investment in this operation to better support our Asian customer base," Borelli concluded.

Third Quarter Highlights

-- Aavid's thermal products group opened a facility dedicated to developing thermal solutions for the computer market. The new 47,000 square foot facility houses manufacturing and engineering operations less than an hour away from Aavid's largest manufacturing site in Laconia, N.H. and the headquarters of its Fluent software operations in Hanover, N.H. The new facility supports Aavid's customers in the computer industry, who often face volatile market demands and short product cycles, without disrupting efforts in existing plants for other customers' thermal solution needs. -- Aavid's thermal products group announced a $1 million European investment to meet demand for its new range of thermal solutions for OEMs using Intel's Pentium(r) II microprocessor. The investment in its UK-based manufacturing facility increases Aavid's total worldwide manufacturing capacity to more than 500,000 square feet and will allow Aavid to respond more rapidly and flexibly to European customers with engineering support. -- Aavid's software business opened an office in Santa Clara to meet Silicon Valley demand for sales, training and technical support for their electronics cooling software product, IcePak. IcePak analyzes airflow and heat rejection in computer and electronics systems and components, and is used by engineers and designers to improve performance, reduce design cost, and reduce time-to-market for products using the next generation of high-performance microprocessors. -- Aavid's thermal products group entered into a sales and marketing agreement with Tellurex Corp., a leading manufacturer and supplier of thermoelectric modules (TECs), often referred to as solid-state refrigerators. TECs require at least one high efficiency thermal solution per module to ensure proper heat removal and are used in a wide variety of applications. In 1996 the global TEC market was $114.6 million and is projected to reach $203.3 million by 2000 with units ranging from $20 to $25 in small quantities. -- Aavid Thermal Technologies, Inc. announced that the U.S. Court of Appeals for the Federal Circuit has affirmed Aavid's lower court summary judgment that declared a Thermalloy Inc. patent invalid. On Aug. 22, a three-judge panel of the Federal Circuit unanimously affirmed the invalidity of the patent, because Thermalloy had impermissibly broadened its patent during reexamination. The patent at issue involved the cross-cutting of extruded aluminum to make heat sinks for microprocessors.

Company Background

Aavid Thermal Technologies is a leading provider of thermal management solutions for dissipating potentially damaging heat from digital and power electronics. Aavid serves a highly diversified range of markets, principally in North America, Europe and the Far East. 1996 sales, which totaled approximately $107 million, were driven by the principal industries served by Aavid including: modeling and analysis software,; computer; industrial; communication; and instrument (including power supplies). Aavid's thermal products division is evolving from a North American thermal component manufacturer, to a worldwide total solutions provider.

Aavid is also the world leader in sophisticated flow modeling and analysis software. Design engineers use Fluent's CFD (computational fluid dynamics) based software to optimize the design of products and manufacturing processes in a wide range of industries including combustion, chemical process, electronics, aerospace and food processing. The Fluent software provides detailed computer models of products in development in detail, faster than physical prototyping and testing, for less money, and with lower risk than traditional practices involving iterative design, prototype and test cycles.

Additional information on Aavid Thermal Technologies is available on the World Wide Web at http://www.aatt.com .

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

Matters discussed in this news release contain forward looking statements that involve risks and uncertainties including, but not limited to, economic conditions in the semiconductor market, product demand and industry capacity, competitive products and pricing, and other risks indicated in Aavid's filings with the Securities and Exchange Commission.

-0-

AAVID THERMAL TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Amounts in thousands, except share data)

                                        (Unaudited)
                                   Sept. 27,    Dec. 31,
                                     1997        1996
ASSETS

Current Assets:
Cash and cash equivalents     $     5,336   $    4,093
Accounts receivable trade          34,078       22,807
Inventories                        12,198        9,565
Deferred income taxes               1,686        1,750
Prepaid and other current assets    2,386        1,604
Total current assets               55,684       39,819

Property, plant and equipment
  - net                            38,154       33,528

Other assets, net                   8,127        6,874

Total Assets                   $  101,965   $   80,221

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Current portion of debt
   obligations                 $    4,553   $    5,953
Accounts payable, trade            14,136       11,575
Accrued expenses and other
   current liabilities             16,753       12,917

Total current liabilities          35,442       30,445

Debt obligations, net of current
  portion                          25,700       17,367
Minority interest                      --          794
Deferred income taxes               1,598        2,262
Total liabilities                  62,740       50,868

Stockholders' Equity

Common stock, $0.01 par value          74           65
Additional paid-in capital         34,780       30,254
Retained earnings (deficit)         4,674       (1,194)
Cumulative translation adjustment    (303)         228
Total stockholders' equity         39,225       29,353

Total liabilities and
  stockholders' equity         $  101,965   $   80,221

-0-

AAVID THERMAL TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Amounts in thousands, except share data)

                              (Unaudited)           (Unaudited)
                            Quarter ended    First nine months ended:
                          Sept. 27  Sept. 28  Sept. 27   Sept. 28
                            1997       1996     1997        1996

Net sales                $ 43,695   $ 25,727   $115,175  $ 74,762
Cost of goods sold         29,097     15,884     72,769    46,553
Gross profit               14,598      9,843     42,406    28,209

Selling, general and
 administrative expenses    8,904      6,425     25,845    19,285
Research and development    1,592      1,611      5,109     4,170
Purchased undeveloped
 technology charge            -            -        -       3,446
Income from operations      4,102      1,807     11,452     1,308

Interest expense, net        (606)      (348)    (1,603)   (1,107)
Other income (expense),
 net                          (42)      (250)      (716)     (168)
Income (loss) before income
 taxes and extraordinary
 item                       3,454      1,209      9,133        43

Income tax (expense)
 benefit                   (1,259)      (407)    (3,310)   (1,252)
Income before
 extraordinary item         2,195        802      5,823    (1,209)

Extraordinary item, net
 of tax                       -          -          -        (171)
Net income (loss)        $  2,195   $    802   $  5,823  $ (1,380)

Earnings per share
 available
 to shareholders:
   From operations       $   0.25   $   0.10   $   0.67   $ (0.21)
   Extraordinary item    $          $          $          $ (0.03)
                                -          -          -
   Net income per share  $   0.25   $   0.10   $   0.67   $ (0.24)

Weighted ave. common
 shares and
 equivalents          8,858,925  7,818,000  8,684,385   6,161,317

CONTACT: Aavid Thermal Technologies Inc.

Patrick J. Riley, 603/224-1117

[e-mail]