Applied Magnetics Corp. announces unaudited fiscal year 1995 results.

GOLETA, Calif.--(BUSINESS WIRE)--Oct. 24, 1995--Applied Magnetics Corp. (APM:NYSE) Tuesday announced operating results for its fourth quarter and fiscal year ended Sept. 30, 1995.

                           Three Months Ended   Fiscal Year Ended
                                Sept. 30,          Sept. 30,
(in 000s)                   1995     1994        1995      1994

Thin Film Sales, net      $81,060  $38,023     $252,726  $133,910
Ferrite Sales, net          9,353   21,902       28,590   123,253
Tape Sales, net             2,035    4,635       11,284    18,764
Total Net Sales           $92,448  $64,560     $292,600  $275,927

Net income (loss)         $ 9,432 ($20,545)    $  1,748  ($52,670)
Net income (loss)
  per share                 $0.40   ($0.93)       $0.08    ($2.39)

Thin-film disk head sales continued to be strong, increasing over the prior year's fourth quarter and the fiscal year by 113% and 89%, respectively, as the company made significant progress with production process improvements and increased production capacity.

Ferrite disk head sales declined in comparison to prior years' sales as the company focused its resources on thin-film business.

The results for the fourth quarter of fiscal 1995 include $1.0 million in other income related to the completion of performance milestones pursuant to the sale of the company's tape head operations to Seagate Technology Inc. in Dec. 1994. Also, included in gross profit for the fourth quarter of fiscal 1995 is a $1.0 million cost recovery from a business interruption claim related to a power outage which the company's Malaysian production facility experienced at the end of the third quarter of fiscal 1995.

The results for the prior year's fourth quarter included a benefit of $2.7 million of cost offsets to research and development expenses from a license and technology agreement with Hitachi Metals Ltd., which was concluded in fiscal 1994, and a $6.2 million reserve provision for excess inventories.

Cash and equivalents increased from $20.8 million at Sept. 30, 1994 to $48.2 million at Sept. 30, 1995.

Craig Crisman, president and chief executive officer, stated: "The company's operating results and liquidity have improved significantly as a result of dedication by the company to the turnaround plan established at the beginning of the fiscal year. We continue to experience strong customer demand for our products."

Applied Magnetics, with headquarters in Goleta, is a major independent supplier of magnetic recording heads for disk drive applications for the worldwide data storage segment of the computer industry. -0-

                Applied Magnetics Corp. and Subsidiaries
       Condensed Consolidated Summary of Operations -- Unaudited
          (In thousands, except share and per share data)

                              Three months ended    Fiscal year ended
                                  Sept. 30,             Sept. 30,
                               1995       1994       1995       1994

Net sales                    $92,448    $64,560    $292,600   $275,927
Gross profit (loss)           19,181     (8,044)     39,916     (6,070)
Research and development
 expenses, net                 9,976      5,935      33,655     24,682
Selling, general and
 administrative expenses       1,664      5,033       7,434     17,267
Total operating expenses, net 11,640     10,968      41,089     41,949
Income (loss) from operations  7,541    (19,012)     (1,173)   (48,019)
Interest expense, net           (490)      (900)     (2,830)    (3,391)
Other income (expense)         2,521       (256)      6,335       (160)
Income (loss) before taxes     9,572    (20,168)      2,332    (51,570)
Provision for income taxes       140        377         584      1,100
Net income (loss)             $9,432   ($20,545)     $1,748   ($52,670)
Net income (loss) per share:   $0.40     ($0.93)      $0.08     ($2.39)
Weighted average common and
 dilutive equivalent
 shares outstanding:      23,576,901 22,079,652  22,619,917 22,081,751

Note 1: Other income (expense) includes $1.0 million and $4.9 million of other income recognized as the company completed certain performance milestones pursuant to the Seagate agreement, for the three months and fiscal year ended Sept. 30, 1995, respectively.

Note 2: Gross profit for the three months ended Sept. 30, 1995, includes $1.0 million cost recovery from a business interruption insurance claim related to a power outage experienced by the company's Malaysia production facility at the end of the third quarter of fiscal 1995. Consequently, there is no gross profit impact for the fiscal year.

Note 3: Certain prior year and current year G&A expense amounts have been reclassified to cost of sales to conform to current quarter and fiscal year 1995 presentation.

Note 4: In fiscal 1994, in connection with the HML agreement, research and development expenses related to inductive and MR thin-film activities were net of cost offsets of approximately $2.7 million and $13.2 million for the three months and fiscal year ended Sept. 30, 1994, respectively.

CONTACT: Applied Magnetics Corp., Goleta

Craig D. Crisman, 805/683-5353