CARVER CORPORATION ANNOUNCES FIRST QUARTER RESULTS.

LYNNWOOD, Wash.--(BUSINESS WIRE)--May 12, 1995--Carver Corporation (NASDAQ:CAVR), today reported sales of $5,230,000 for the quarter ended March 31, 1995, compared to sales of $5,516,000 for the same period in 1994. Net losses were $632,000 or $0.17 per share for the first quarter of 1995, compared to net losses of $544,000 or $0.15 per share for the same period of 1994.

Sales of products manufactured in Carver's Lynnwood plant increased by over 65% from the same quarter last year, primarily professional and consumer audio amplifiers, as well as amplifiers now being manufactured for third parties. Lynnwood manufacturing has gone from 30% to 55% of the company's total sales volume, and gross margins on these products have steadily improved. However, the benefits of this progress have been offset by a substantial decline in sales volume and a reduction in gross margin in the 45% of products sourced from Pacific Rim vendors, two-thirds of which come from Japan.

As a result of lower sales, continuing losses, and the decline in the value of the dollar to the yen, the company is experiencing a deficit in working capital. In response, the company has initiated communications with some of its foreign suppliers related to postponement of deliveries, reduction of purchase commitments, and extension of payment terms for certain products. The company is also taking steps to reduce expenses and generate cash by reducing inventories.

"The half of the business engaged in domestic manufacture of amplifiers and certain other products has substantially increased and gross margins have noticeably improved. However, Carver products sourced from the Pacific-rim have dim future prospects due to the latest yen-dollar rate crisis," stated Robert A. Fulton, president and CEO. "While economists may disagree over the direction of the yen - dollar exchange rate, Carver is in no position to gamble on the outcome. The continuing erosion in the company's balance sheet and its weakened cash position mandate a much more radical approach than has been taken to date and the pursuit of new alternatives.

"Earlier this year I proposed, and the Board of Directors agreed, to engage the services of an investment banking firm, Cruttenden Roth, to assist us in evaluating and pursuing any and all external measures to preserve or realize the investment position of Carver shareholders. These measures have been defined to include strategic relationships, outside investment, and even the sale or merger of a part or all of the company. We can in no way be certain this will bring a favorable result," Fulton noted.

"Independent of the outside search for strategic alternatives, I am working with the management team on two major initiatives," Fulton said. "First, to make immediate and substantial expense reductions with an emphasis on cash flow, and second, to restructure our operations in recognition of our current situation, which may include a redefinition and possible down-sizing of the company."

"My confidence in the strength of the Carver brand name, the quality and integrity of Carver products, and above all, in the skill and dedication of the company's employees has in no way diminished. I remain convinced that Carver's core manufacturing business is viable, and I am personally committed to continue to work towards a favorable resolution," Fulton said.

Carver Corporation designs, develops, manufactures and markets high-fidelity consumer, mobile and professional audio components and systems which are known for their superior sound reproduction. -0-

                First Quarter Ended March 31, 1995
                 Consolidated Financial Highlights
                           (in thousands)

                       First Quarter Ended   First Quarter Ended
                            3/31/95                 3/31/94

Net sales                 $   5,230               $   5,516
Gross margin                  1,183                   1,156
Expenses
   Selling                      990                     962
   General and administrative   482                     394
   Research and development     253                     262
Loss from operations           (542)                   (462)
Other (income) expense          (90)                    (82)
Net loss                   $   (632)               $   (544)
Net loss per share         $  (0.17)               $  (0.15)
Weighted common and common
 stock equivalent shares
 used for calculation
 per share                    3,679                   3,678

                        Condensed Balance Sheet
                (in thousands except per share data)

                                       March 31,       December 31,
                                         1995             1994

Cash and short-term investments      $     67              254
Net receivables                         3,322            3,830
Inventory                               7,850            8,050
Other assets                            1,955            1,966
Net property, plant and equipment       2,473            2,528
Total assets                         $ 15,667         $ 16,628

Total liabilities                       5,762            6,091
Shareholders  equity                    9,905           10,537
Total liabilities and equity         $ 15,667         $ 16,628

CONTACT: CARVER CORPORATION

John P. World, 206/775-1202