COMARCO'S first quarter net income and earnings per share more than 30%.

YORBA LINDA, Calif.--(BUSINESS WIRE)--May 16, 1995--COMARCO Inc. (NASDAQ:CMRO) Tuesday announced a net profit of $838,000 or 17 cents per share for the first quarter of its fiscal year 1996, which ended April 30, 1995, up 32% from the comparable period last year.

Revenues were $17.3 million for the quarter, up 11% from last year's first quarter. Last year, the company reported net income of $635,000 or 13 cents per share on revenues of $15.7 million. Average shares for the quarter were 4,929,000 vs. 5,019,000 for last year.

First quarter operating income for the company's wholly-owned subsidiary, Comarco Wireless Technologies Inc. was $638,000, a 340% increase from last year's first quarter. This represents 49% of COMARCO'S operating income for the quarter. Comarco Wireless' revenues for the first quarter were $3.0 million, up 136% from $1.3 million reported for the first quarter last year.

COMARCO will host an investor conference call, led by COMARCO'S President and CEO, Don M. Bailey, on May 16 at 11:00 a.m. PDT. To participate, call 800/706-6782 approximately 5 minutes before the scheduled conference. A replay of the call will be available for 24 hours, beginning 5 p.m. EDT, May 16. To hear the replay, call 800/642-1687, ID no. 96331.

"COMARCO is on track with our expectations for the year," commented Bailey, "Comarco Wireless continues to meet the strategic and operational goals established for this year and beyond. The $3.6 million of orders received, when compared to last year's first quarter bookings of $1.2 million, is indicative of the positive market reception from cellular telephone companies to our products.

"Our other business units are performing as expected," continued Bailey. "As anticipated, we experienced a continuing gradual decrease in our government business. We are still awaiting word on the award of the consolidated U.S. Navy omnibus contract to support China Lake and Pt. Mugu. The government anticipates making a contract award in the near future. LCTI, our new software products operation, broke even this quarter. We are investing in upgrading their product line, and while longer term prospects look favorable, the near term could shows losses.

"COMARCO'S financial position remains strong, with $10.1 million in cash and investments as of April 30, 1995. With the redemption of $844,000 of convertible subordinated debentures in April 1995, we have eliminated all debt. "Overall, the future appears bright. We intend to continue our growth efforts in wireless communications while maintaining our stable position in our other businesses," concluded Bailey.

COMARCO provides wireless communications products, engineering services, airport management services, software products and technology training to the public and private sectors.

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                              COMARCO INC.
                    INTERIM STATEMENT FINANCIAL DATA
                          STATEMENT OF INCOME
              (Dollars in thousands Except Per Share Data)

                                    First Quarter Ended      Change
                                  April 30         May 1
STATEMENT OF INCOME                 1995            1994

Revenues
    Contract                     $14,354         $14,405      (0.4%)
    Product sales                  2,975           1,263     135.6%
Total revenue                     17,329          15,668      10.6%

Direct costs
    Contract costs                 9,463           9,243       2.4%
    Cost of product sales          1,521             784      94.0%
Total direct costs                10,984          10,027       9.5%

Indirect costs                     5,039           4,625       9.0%

Total operating costs             16,023          14,652       9.4%

Operating income                 $ 1,306         $ 1,016      28.5%

Interest expense, net               (91)              54

Income before income taxes         1,397             962      45.2%

Income taxes                         559             327      70.9%
    Tax rate                         40%             34%

Net income                      $    838         $   635      32.0%

Earnings per share
    Primary                      17 cents       13 cents      30.8%
    Fully diluted                17 cents       13 cents      30.8%

Weighted average shares
   of common stock
    Primary                    4,929,000       5,019,000      (1.8%)
    Fully diluted              4,971,000       5,028,000      (1.1%)

SELECTED BALANCE                           April 30       January 31
SHEET ITEMS                                    1995             1995

Cash and short-term investments            $  9,126         $  9,907

Net accounts receivable                       8,764            8,703

Current assets                               19,101           19,848

Long-term investments                           992            1,023

Property and equipment, net                   1,061              970

Intangible assets, net                        2,903            3,011

Total assets                                 25,232           25,810

Short-term debt                                ---               ---

Current liabilities                           6,876            7,454

Long-term debt                                 ---               ---

Convertible subordinated debentures            ---               844

Total shareholders' equity                  18,047           17,203

CONTACT: COMARCO Inc., Yorba Linda

Don M. Bailey, 714/282-3813

OR

Eva Evans, 714/282-3817