Active Voice announces financial results for its fourth quarter and fiscal year ended March 31, 1997.

SEATTLE--(BUSINESS WIRE)--May 13, 1997--Active Voice Corp. (Nasdaq: ACVC), a leader in PC-based voice processing systems and computer-telephone integration (CTI) products, today reported revenue and earnings for its fourth quarter and fiscal year ended March 31, 1997, which reflects the effects of the company's acquisition of a majority interest in Pronexus Inc. (January 1997).

The company announced net sales for the fourth quarter of $12,924,000, a 17.5% increase from sales of $11,002,000 in the similar prior-year quarter. Due to a $1,769,000 non-recurring charge for the write-off of in-process research and development resulting from the Pronexus transaction, the company reported a net loss for the quarter of $1,092,000 ($0.24 per share). Excluding the non-recurring charge, fourth quarter earnings would have been $677,000 ($0.14 per share), as compared with $669,000 ($0.14 per share) in the comparable prior-year quarter. For the year, net sales were $49,515,000, an increase of 9.7% as compared with sales of $45,138,000 in fiscal year 1996. The company reported earnings for the year of $1,751,000 ($0.38 per share). Excluding the non-recurring charge, fiscal year earnings would have been $3,520,000 ($0.76 per share), as compared to $5,162,000 ($1.11 per share) in fiscal 1996.

"The increase in sales reflects our core strategy of increasing market share by partnering with telephone switch manufacturers to provide affordable, feature-rich PC-based voice processing and CTI products to small-and medium-sized businesses. Additionally, the growth is due to increasing penetration of international voice mail markets and increased sales volumes of our CTI products," said Jose S. David, Active Voice chief financial officer. "Despite lower than expected revenues in the fourth quarter, we are pleased with the increase in sales for the year and the quarter and the steps taken to ensure continued long term growth," David stated. "In addition, expenses were in line with management expectations and gross margin continued to be within our expected range of 56-59%."

"We have established a solid foundation for our strategy of investing in the future with our focus on product development, adding new features and capabilities to our existing products, and addressing the needs of our successful partner channel," said Robert L. Richmond, Active Voice chairman and chief executive officer. "1997 was a year in which we shipped additional unified messaging products -- ViewMail for Microsoft Messaging and Message Integration for Novell GroupWise -- and increased our emphasis on adding new strategic partners, such as Tadiran Telecommunications Ltd., Executone Information Systems Inc., and Siemens Business Communications Systems Inc. We are developing scaleable products that expand our potential market, and we believe these continued investments in the coming year will make us attractive to more strategic partners and larger end-users," Richmond stated.

Founded in 1983, Seattle-based Active Voice has offices in Australia, Canada, China, India, the Netherlands and the United Kingdom. The company has more than 41,000 installations in virtually every type of business in 60 nations worldwide. Active Voice products are sold through a global network of independent telecommunications dealers and computer resellers. More information about Active Voice Corp. and its products is available at the company's web site, www.activevoice.com . -0-

Certain statements in this news release (for example, statements using the expressions, "the company expects" or "the company anticipates" and other similar statements) contain "forward looking" information (as defined in the Private Securities Litigation Reform Act of 1995) involving risks and uncertainties, including without limitation, 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. The company assumes no obligation to release publicly any changes to these "forward looking statements" that may arise from the development of unanticipated events or circumstances that occur after the date of the original projection.

For more information, please contact the following: Financial: Jose S. David, 206-441-4700, ext. 105, [e-mail]

Investor Relations: Carolyn Paola, 206-441-4700, ext. 197, [e-mail]

Brand and product names described herein are trademarks of their respective owners. -0-

                              ACTIVE VOICE CORP.
                     CONSOLIDATED STATEMENTS OF INCOME

                          Three Months Ended        Year Ended
                              March 31,              March 31,
                            1997    1996         1997        1996

Net sales            $12,924,078 $11,001,949  $49,514,823 $45,138,163
Cost of goods sold     5,598,536   4,423,977   20,735,261  17,018,072
Gross profit           7,325,542   6,577,972   28,779,562  28,120,091

Operating expenses:
 Research
  development          1,805,809   1,691,021    6,757,201   5,706,412
 Sales and Marketing   3,729,663   3,190,683   13,300,530  11,490,892
 General and
  administrative       1,044,819     874,569    4,383,818   4,051,708
 Non-recurring charge for
  purchased, in-process
  research and
  development          1,769,000                1,769,000

   Total operating
    expenses           8,349,291   5,756,273   26,210,549  21,249,012
Operating income(loss)(1,023,749)    821,699    2,569,013   6,871,079

Interest income          164,693     191,100      744,983     700,863
Income (loss) before
 income taxes and
 minority interest      (859,056)  1,012,799    3,313,996   7,571,942

Income tax provision    (256,416)   (343,925)  (1,586,885) (2,410,028)
Minority interest in loss
 of consolidated
 subsidiary               23,911                   23,911
Net income (loss)    $(1,091,561)  $ 668,874  $ 1,751,022 $ 5,161,914

Net income (loss) per
 common share             $(0.24)      $0.14        $0.38       $1.11

Average number of common
 and dilutive common
 equivalent shares
 outstanding           4,601,842   4,638,920    4,623,140   4,643,744

-0-
                           ACTIVE VOICE CORP.
                      CONSOLIDATED BALANCE SHEETS

                                  March 31,         March 31,
                                    1997              1996
ASSETS
Current assets:
 Cash and cash equivalents      $ 1,542,047        $ 3,389,760
 Marketable securities            6,222,491          7,216,738
 Accounts receivable,
  less allowances                10,410,019          8,628,280
 Inventories                      7,008,912          5,482,704
 Deferred tax asset               1,008,363          1,023,324
 Prepaid expenses and other
  assets                          1,258,026            774,316
    Total current assets         27,449,858         26,515,122

Marketable securities             7,530,570          8,461,607
Furniture and equipment, net      2,408,302          2,094,480
Other assets                      1,551,900            328,503
    Total assets                $38,940,630        $37,399,712

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable              $  2,341,498       $  2,138,073
 Accrued compensation and
  benefits                        1,682,482          1,871,755
 Other accrued expenses             932,540            762,340
 Federal income taxes payable         4,017            830,888
    Total current liabilities     4,960,537          5,603,056

Commitments

Minority interest  (103,684)
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 17,002,911         16,790,931
 Retained earnings               19,025,866         17,317,920
 Unrealized gain (loss) on
  marketable securities               3,020            (16,443)
 Translation adjustment               4,173
                                 36,035,970         34,092,408

 Less 358,859 and 421,988 shares
  repurchased at March 31, 1997
  and 1996, respectively, at cost(1,952,193)        (2,295,752)

 Total stockholders' equity      34,083,777         31,796,656
  Total liabilities and
   stockholders' equity         $38,940,630        $37,399,712

-0-

CONTACT: Jose S. David

206-441-4700, ext. 105

[e-mail]