Aurora Electronics reports results for fiscal 1996.

IRVINE, Calif.--(BUSINESS WIRE)--Dec. 30, 1996--Aurora Electronics Inc. (ASE:AUR) Monday announced results for its fiscal year ended Sept. 30, 1996.

The company reported revenues for fiscal 1996 of approximately $98.0 million, as compared with approximately $141.9 million for fiscal 1995. The decline in revenues is due primarily to the discontinuation of the unprofitable Premier Division, which accounted for approximately $36.3 million in revenues in fiscal 1995.

Excluding the Premier Division, net revenues for fiscal 1996 decreased 7.2% from fiscal 1995, comprised of a 27.4% decline in revenues for the Asset Recovery Services Division, offset by a 5.3% increase in revenues for the Parts Support Services Division. The decline in revenues for the ARS Division was due primarily to an 87% decline in the average sales price for DRAM chips during fiscal 1996.

Net loss for fiscal 1996 was $31.8 million (loss per share of $4.44) vs. a net loss of $15.0 million (loss per share of $1.79) for the same period last year. The fiscal 1996 loss included $6.3 million of reduced income from the ARS Division when compared to fiscal 1995.

Also contributing to the 1996 loss were several non-operating items, including the write-off of goodwill related to the acquisition of Micro-C Corp. (predecessor to the company's ARS Division) totaling $16.6 million, approximately $6.6 million of charges incurred due to the company's recapitalization transaction in March 1996, $1.4 million in dividends on the preferred stock issued in the recapitalization, and write-downs and disposals of property and equipment of $1.4 million.

Jim C. Cowart, chairman and CEO of Aurora, commented on the results, saying: "Despite what has been a difficult year due to depressed conditions in the market for recycled computer memory chips, we continue to be confident in the fundamentals and strategy of the company. We have broadened the range of our recycling services to include whole systems recycling, and have been pleased by the response of our customers.

"In our spare parts distribution business, we continue to focus on broadening penetration of key accounts in the computer maintenance market, strengthening our information systems, streamlining operations and reducing costs. Despite adverse operating conditions, net operating cash flows for the company remained positive due to aggressive management of working capital."

With headquarters in Irvine, Aurora Electronics provides computer OEMs and service organizations with spare parts distribution and electronics recycling services. The company has facilities located in the United States, Europe and Canada. -0-

This news release may contain forward-looking statements. Any such statements are subject to risks and uncertainties that could cause actual results to vary materially from those anticipated; among them are pricing for memory chips and computer components. Additional information with respect to these and other factors which could materially affect the company is included in the company's filings with the Securities and Exchange Commission, including its proxy statement, 10-K and 10-Q. -0-

              AURORA ELECTRONICS INC. AND SUBSIDIARIES
                         Income Statement
              (In thousands, except per-share figures)

                              Three Months Ended   Fiscal Year Ended
                                  Sept. 30,            Sept. 30,
                                1996     1995       1996      1995

Net revenues                  $19,081  $34,519    $98,019  $141,852
Cost of sales                  14,566   25,654     73,576   107,270
Gross profit                    4,515    8,865     24,443    34,582
Selling, general and
 administrative expenses        5,452    6,596     25,943    28,170
Amortization expense           16,945      361     18,042     9,073
Restructuring charge and
 other                             --       --         --     5,643
Operating income (loss)       (17,882)   1,908    (19,542)   (8,304)
Interest expense, net            (747)  (1,371)    (6,221)   (5,522)
Other income (expense), net    (1,280)     (11)    (1,284)      116
Loss before provision
 for income taxes             (19,909)     526    (27,047)  (13,710)
Provision for income taxes        (67)     184      3,306     1,320
Net income (loss)             (19,842)     342    (30,353)  (15,030)
Dividends on preferred stock     (700)      --     (1,400)       --
Net income (loss) applicable
 to common stockholders      $(20,542)    $342   $(31,753) $(15,030)

Income (loss) per share
 (primary):
Net income (loss)              $(2.87)   $0.04     $(4.44)   $(1.79)

Weighted average shares
 outstanding: Primary           7,159    8,379      7,159     8,379

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                     Selected Balance Sheet Data

                            Sept. 30, 1996    Sept. 30, 1995

Current assets                 $15,480            $21,978
Net property, plant
 and equipment                   4,811              5,752
Other assets                    32,497             52,986
Total assets                    52,788            $80,716

Current liabilities            $14,870            $21,782
Long-term debt                  28,208             46,596
Redeemable convertible
 preferred stock                41,400                 --
Common stockholders' equity    (31,690)            12,338
Total liabilities and equity   $52,788            $80,716

CONTACT: Aurora Investor Relations, 714/660-1232