BBN reports fourth quarter and year-end 1995 results.

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Aug. 8, 1995--BBN (Bolt Beranek and Newman Inc., NYSE: BBN) today reported a net loss of $5,889,000, or $.34 per share, for the fourth quarter of fiscal year 1995, compared to a net loss of $1,952,000, or $.12 per share, for the same period a year ago.

The company reported fourth quarter 1995 sales of $60,159,000, a 22 percent increase over the $49,242,000 in sales from the same quarter in fiscal year 1994.

For the fiscal year, BBN reported net income of $64,844,000, or $3.61 per share, on sales of $215,031,000. These results include the $105,000,000 pre-tax gain from the previously announced sale of the assets of LightStream Corp. to Cisco Systems Inc. in January 1995. For the year, BBN reported a loss from operations of $18,814,000, compared to an $8,444,000 loss for the same period a year earlier. These results reflect revenues of $8,445,000 and an operating loss of $3,689,000 relating to LightStream. BBN's fiscal 1995 results compare with a net loss of $7,824,000, or $.48 per share, on sales of $196,104,000 for the same period a year earlier.

BBN's losses from operations for both the fourth quarter and full fiscal year 1995 reflect significant investments in sales, marketing and new product development of BBN's internetworking capabilities, software and collaborative technologies for business users.

BBN Planet Corp., BBN's Internet services subsidiary, had fourth quarter 1995 revenue of $6,649,000 and an operating loss of $6,426,000. For fiscal year 1995, BBN Planet generated revenue of $14,156,000 and an operating loss of $12,707,000. BBN Planet CEO Paul R. Gudonis said, "BBN Planet started the fiscal year as a regional provider with fewer than 50 employes and approximately 300 customers. During the year we acquired two additional regional Internet access providers, growing our company to more than 250 employees with more than 1,300 customers. While we expand our nationwide infrastructure, we are consolidating operations, standardizing processes and investing in the development of specific value-added services. Recently, the company has forged a partnership with AT&T that will take advantage of BBN Planet's capabilities while broadening our channels of distribution."

BBN Software Products Corp., BBN's data visualization and process optimization subsidiary, had fourth quarter revenue of $12,821,000, a 37 percent increase over the same period a year ago, and returned to profitability. For fiscal year 1995, BBN Software Products had revenue of $39,428,000 and an operating loss of $3,731,000. BBN Software Products CEO John T. Kish said, "In fiscal year 1995, we focused on the pharmaceutical and manufacturing markets, revamped our product line to capitalize on client/server and Windows (TM) applications, and developed relationships with key industry leaders, such as Eli Lilly, Hoechst-Roussel and Ciba-Geigy. These actions contributed significantly to a profitable fourth quarter."

Revenues for BBN's Systems and Technologies Division, which offers research, development and advanced technologies to government and commerical customers, were comparable to last year. The division experienced a reduction in profitability due to declines in the defense communications and acoustics businesses, and an increased investment in sales and marketing. The division generated revenue growth in collaborative systems. During the year, the division also announced a contract to expand and operate a portion of the America Online dial-in network. Newly appointed BBN Systems and Technologies President David N. Campbell said, "BBN Systems and Technologies is targeting its advanced networking and collaborative expertise to a number of new government and commerical initiatives."

BBN HARK Systems Corp., BBN's speech recognition subsidiary, continued to invest in sales, marketing and new product development. BBN HARK experienced revenue growth and increased operating losses for fiscal year 1995, and has recently announced reseller agreements with IBM, AT&T and Digital. BBN HARK CEO Julie Donahue said, "BBN HARK is investing in creating a business infrastructure and focusing on developing speech applications for what BBN has named the `virtual call center.'"

BBN President and CEO George H. Conrades said, "We continue to invest significantly in the commercialization of our technologies, while creating partnerships with industry leaders. At the same time, we have strengthened our management team across all of our business units and focused our investments on internetworking and collaborative systems. We believe these investments are essential to capitalize on emerging market opportunities."

Major announcements in BBN's key business segments over the past year included:

--Appointments of senior executives to head up BBN's four business units- David N. Campbell as president of Systems and Technologies, Paul R. Gudonis as CEO of BBN Planet, Julie Donahue as CEO of BBN HARK and John T. Kish as CEO of BBN Software Products;

--Appointments of additional board members for BBN and its three subsidiaries- Lucie J. Fjeldstad, president of Video Systems Division, Tektronix Inc., to BBN board; Max D. Hopper, former chairman of AMR's SABRE Group, to BBN Planet board; Thomas O. Pyle, senior advisor to the Boston Consulting Group, to BBN Software Products board; and Michell E. Kertzman, chairman and CEO of Powersoft Corp., to BBN HARK board.

In the BBN internetworking business segment:

--BBN established its Internet services subsidiary, now named BBN Planet;

--BBN Planet acquired regional Internet access providers- BARRNET and SURAnet;

-- BBN Planet launched its nationwide, dedicated Internet services expansion;

-- AT&T and BBN Planet joined forces to provide business with a range of services for reliable and secure access to the Internet;

-- AT&T Ventures invested $8 million in BBN Planet;

-- Cisco Systems Inc. acquired substantially all of the assets of LightStream Corp., BBN's Asynchronous Transfer Mode (ATM) subsidiary, for $120 million. Cisco also chose BBN Planet to provide it with Internet access;

-- BBN Systems and Technologies to expand and operate a portion of the America Online nationwide dial-in network;

-- BBN Systems and Technologies won a number of contracts to develop advanced technologies in the areas of wireless communications, internetworking and high-capacity routers.

In the BBN data analysis business segment:

-- BBN Software Products acquired IBM's Process Analysis Navigation System for proposed BBN products and services to help manufacturing companies improve yields and optimize their production processes;

-- Ciba-Geigy Ltd. agreed to standardize on BBN Software Products Clintrial(TM) clinical data management software for worldwide drug development projects;

-- Eli Lilly and Co. chose BBN Software Products' clinical research software to help accelerate global drug development.

In the BBN collaborative systems and acoustics business segment:

-- The Dade County Public School system selected BBN Systems and Technologies for a partnership under which they will jointly create three model middle schools in the Miami area;

-- Time Warner Cable selected BBN HARK to develop system design for integrating speech recognition into its Full Service Network(TM).

-- IBM agreed to distribute BBN HARK Recognizer speech technology for use with IBM DirectTalk/6000;

-- AT&T agreed to pilot BBN HARK speech recognition software in call center applications;

-- BBN Systems and Technologies created the Acoustic Technologies Division to focus on government and commercial opportunities in noise and vibration control.

                         BOLT BERANEK AND NEWMAN INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                               (unaudited)

The following is a summary of business segments information for
the three months and year ended June 30, 1995 and 1994.  All data
are shown net of intersegment transactions:

                          Three Months Ended         Year Ended
                               June 30                June 30
Dollars in thousands       1995         1994      1995         1994

Revenue:
 Internetworking          $22,647      $19,501   $88,259      $76,765
 Data analysis software    12,821        9,336    39,428       35,393
 Collaborative systems
  and acoustic
   technologies            24,691       20,405    87,344       83,946
                           ------       ------   -------      -------
                          $60,159      $49,242  $215,031     $196,104
                           ======       ======   =======      =======

Income (loss) from
 operations:
 Internetworking         $(5,323)     $(1,665)  $(10,147)     $(9,362)
 Data analysis software      125          (5)     (3,621)         497
 Collaborative
  systems and acoustic
   technologies           (1,039)         270     (2,210)       2,095
 Unallocated
  corporate expenses        (381)        (636)    (2,836)      (1,674)
                           ------       ------   -------      -------
                         $(6,618)      $(2,036) $(18,814)     $(8,444)
                           ======       ======   =======      =======

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                        BOLT BERANEK AND NEWMAN INC.
                        CONSOLIDATED BALANCE SHEETS

                                     June 30         June 30
Dollars in thousands                   1995             1994
                                    (unaudited)

Assets:

  Cash and equivalents (includes
   restricted cash of $12,134 at
   June 30, 1995)                     $110,792        $ 67,115
  Accounts receivable, net              53,933          41,503
  Inventories, net                         546           1,114
  Other current assets                   3,060           3,592
                                       -------         -------
    Total current assets               168,331         113,324

  Property, net                         30,075          19,658
  Goodwill, net                         17,927
  Other assets                           3,133           2,958
                                       -------         -------
                                      $219,466        $135,940
                                       =======         =======

Liabilities and Shareholders' Equity:

  Payables and other liabilities      $ 33,803        $ 29,309
  Accrued restructuring                  9,216          12,566
  Deferred revenue                      16,914          11,112
                                      --------        --------
    Total current liabilities           59,933          52,987

  6% convertible subordinated
   debentures due 2012                  73,510          73,510
  Minority interests                     3,471           2,172
  Shareholders' equity, net of
   treasury stock                       82,552           7,271
                                       -------         -------
                                      $219,466        $135,940
                                       =======         =======

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                        BOLT BERANEK AND NEWMAN INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS

                          Three Months Ended         Year Ended
                               June 30                June 30
Dollars in thousands,
 except per-share data     1995       1994         1995         1994
Revenue:
Services                $47,938    $ 41,669    $176,284     $165,759
Products                 12,221       7,573      38,747       30,345
                         60,159      49,242     215,031      196,104
Costs and expenses:
Cost of services         36,753      27,908     123,554      114,723
Cost of products          2,354       2,690      11,697       11,721
Research and development
 expenses                 6,474       6,127      25,306       23,306
Selling, general and
 administrative expenses  21,196      14,553      73,288       54,798
                         66,777      51,278     233,845      204,548
Loss from operations     (6,618)     (2,036)    (18,814)      (8,444)
Interest income           1,489         562       4,422        2,190
Interest expense         (1,111)     (1,218)     (4,434)      (4,606)
Minority interests         (110)        743     (11,195)       2,071
Other income/(expense),
 net(1)                      17          (3)    108,648          965
Income (loss) before
 income taxes            (6,333)     (1,952)     78,627       (7,824)
Provision (benefit)
 for income taxes          (444)                 13,783
Net income (loss)      $ (5,889)   $ (1,952)   $ 64,844     $ (7,824)
Net income (loss)
 per share             $   (.34)    $  (.12)   $   3.61     $   (.48)
Shares used in per-share
 calculations        17,317,000  16,367,000  17,984,000   16,179,000

Note to Consolidated Statements of Operations:
(1) The consolidated statement of operations for the year ended June
30, 1995 includes the gain on sale of assets of LightStream Corp. to
Cisco Systems Inc. on January 11, 1995.  The gain on the sale
amounted to approximately $105.0 million before minority interest of
$11.8 million and provision for income taxes of $13.8 million.
Other income for the year ended June 30, 1995, in addition to the
gain on the LightStream sale, includes amounts arising from
contracts which were substantially completed in prior years.

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CONTACT: Bolt Beranek and Newman Inc., Cambridge

Peter W. Thonis, 617/873-3512