Active Voice Corp. announces sales and earnings for its fourth quarter and fiscal year ended March 31, 1996.

SEATTLE--(BUSINESS WIRE)--May 7, 1996--Active Voice Corp. (NASDAQ: ACVC) today announced its sales and earnings for the fourth quarter and fiscal year ended March 31, 1996.

The company reported fiscal year record sales of $45,138,000 and earnings of $5,162,000 ($1.11 per share), an increase in sales of 22%, compared with sales of $36,950,000 and earnings of $ 5,110,000 ($1.11 per share) at fiscal year end 1995. For the fourth quarter, the company reported sales of $11,002,000 and earnings of $669,000 ($0.14 per share), as compared with sales of $10,024,000 and earnings of $1,383,000 ($0.30 per share) for the comparable prior-year quarter. This represents an increase in sales of 10%.

"Despite the combination of factors that led to lower than expected revenues in the fourth quarter, the increase in sales for the year reflects continued increased customer demand for PC-based voice processing systems, increasing penetration of international voice mail markets, and the emergence of our computer-telephone integration (CTI) products," said Jose S. David, Active Voice chief financial officer.

"Fourth quarter revenue, margin, and earnings exceeded the company expectations that were stated in the fourth quarter and fiscal 1996 year end update released on March 13," David added. "We have addressed the factors that were cited in the March 13 release in several ways: 1) we recently added a major new OEM whose revenue we anticipate will start contributing in the second quarter of fiscal 1997, 2) we adjusted pricing in our mid and high range products, and 3) we entered a strategic agreement with Inacom, a large distributor that spans the data and telephony channels," he explained.

Robert L. Richmond, Active Voice chairman and chief executive officer stated, "The Inacom agreement is an extremely significant alliance for Active Voice. We have, by far, the most installations of desktop voice messaging with call control, and we also lead in features. Inacom is in an excellent position to help us make this productivity available to the wide range of companies whose corporate information technology purchases include both LANs and voice processing."

Active Voice Corp. is a leading manufacturer of PC-based voice processing systems and computer-telephone integration (CTI) products, with more than 35,000 installations worldwide. The Seattle-based corporation has offices in Australia, Canada, China, the Netherlands, and the United Kingdom. Active Voice products are sold through a global network of independent telecommunications dealers and computer resellers.

Certain statements in this earnings release contain "forward looking" information (as defined in the Private Securities Litigation Reform Act of 1995) that involves risk and uncertainty, including projections for sales and expenditures, and various business environment and trend projections. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks discussed in documents filed by the Company with the Securities and Exchange Commission. Investors are encouraged to consider the risks detailed in those filings. -0-

                        ACTIVE VOICE CORP.
        CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

                      Three Months Ended
                          March 31,         Year Ended March 31,
                       1996    1995           1996        1995

Net sales       $11,001,949  $10,023,732  $45,138,163  $36,949,635
Cost of
 goods sold       4,423,977    3,549,044   17,018,072   12,939,000
Gross profit      6,577,972    6,474,688   28,120,091   24,010,635

Operating expenses:
 Research and
  development     1,691,021    1,248,814    5,706,412    4,363,202
 Sales and
  marketing       3,190,683    2,438,736   11,490,892    9,141,864
 General and
  administrative    874,569      929,573    4,051,708    3,661,004
 Total operating
  expenses        5,756,273    4,617,123   21,249,012   17,166,070
Operating income    821,699    1,857,565    6,871,079    6,844,565

Interest income     191,100      148,683      700,863      533,892
Income before
 income taxes     1,012,799    2,006,248    7,571,942    7,378,457

Income tax
 provision          343,925      623,300    2,410,028    2,268,732

Net income      $   668,874  $ 1,382,948  $ 5,161,914  $ 5,109,725

Net income per
 common share         $0.14        $0.30        $1.11        $1.11

Average number
 of common and
 common equivalent
 shares
 outstanding      4,638,920    4,602,116    4,643,744    4,603,461

                            ACTIVE VOICE CORP.
                CONSOLIDATED BALANCE SHEETS (Unaudited)

                                   March 31,           March 31,
                                     1996                1995
ASSETS
Current assets:
 Cash and cash equivalents       $ 3,389,760         $    649,553
 Marketable securities             7,216,738            3,300,596
 Accounts receivable,
  less allowances                  8,628,280            6,460,765
 Inventories                       5,482,704            3,430,224
 Federal income taxes receivable                          334,453
 Deferred tax asset                1,023,324              601,177
 Prepaid expenses and other assets   774,316              618,709
   Total current assets           26,515,122           15,395,477

Marketable securities              8,461,607           11,158,801
Furniture and equipment, net       2,094,480            1,907,540
Other assets                         328,503              235,754
   Total assets                  $37,399,712          $28,697,572

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable               $  2,138,073        $  1,209,772
 Accrued compensation and benefits 1,871,755           1,649,096
 Other accrued expenses              762,340             389,178
 Federal income taxes payable        830,888
   Total current liabilities       5,603,056           3,248,046

Commitments

Stockholders' equity:
 Preferred stock, no par value:
  Authorized shares -
  2,000,000 - none outstanding
 Common stock, no par value:
  Authorized shares - 10,000,000
  Issued shares,
  including repurchased
  shares - 4,976,933              16,790,931          16,104,792
 Retained earnings                17,301,477          12,378,168
                                  34,092,408          28,482,960
 Less 421,988 and 507,036
  shares repurchased at
  March 31, 1996
  and 1995, respectively,
  at cost                         (2,295,752)         (3,033,434)
Total stockholders' equity        31,796,656          25,449,526
   Total liabilities and
    stockholders' equity         $37,399,712         $28,697,572

CONTACT: Active Voice Corp.

Financial: Jose S. David, 206/441-4700, ext. 105,

[e-mail]

Investors: Carolyn Paola, 206/441-4700, ext. 197,

[e-mail]

Marketing and public relations:

Diane M. Williams, 206/441-4700,ext.132,

[e-mail]

Web Site: www.activevoice.com

NOTE TO EDITORS: In the Internet/email addresses noted in this news release, there is an "at" symbol between jdavid and activevoice.com, between ir and activevoice.com, and between dwilliams and activevoice.com. This symbol may not appear properly in some systems.