COMARCO Reports Record Quarterly and Yearly Earnings.

SANTA ANA, Calif.--(BUSINESS WIRE)--March 18, 1999--COMARCO Inc. (Nasdaq:CMRO) Thursday reported record earnings for its fourth quarter and fiscal year 1999 ended Jan. 31, 1999.

For the year, net income was $5.7 million, or $1.13 per share (diluted) on revenues of $92.0 million. Last year, the company reported net income of $4.9 million or $0.89 per share on revenues of $85.1 million.

Net income for the fourth quarter of FY99 was $2.0 million, or $.40 per share (diluted) on revenues of $24.0 million. Revenue was $22.1 million, net income $1.0 million and earnings per share $0.18 in last year's fourth quarter.

Last year's fourth-quarter and full-year financial results reflect an $.08 charge related to the write-off of a discontinued software product.

Fourth-quarter operating income for the company's subsidiary, Comarco Wireless Technologies Inc., was $3.1 million on record sales of $10.9 million. For the year, Comarco Wireless' operating income was $7.1 million.

Revenues for the year were $34.0 million vs. $29.5 million in FY98.

COMARCO will host an investor's conference call, led by COMARCO's president and CEO, Don M. Bailey, on March 18 at 11 a.m. PST. To participate, call 800/706-6782 approximately five minutes before the scheduled conference. A replay of the call will be available for 24 hours, beginning 5 p.m. EST , March 18. To hear the replay, call 800/642-1687, ID no. 996276.

"Our record results were due to the improved performance of both business segments, combined with the benefit of our significant stock repurchase this year," stated Don M. Bailey, president, CEO and chairman of COMARCO.

"Cellular and PCS telephone companies continue to be very receptive to our product offerings, comprising a significant portion of Comarco Wireless' sales. The proliferation of digital communication technologies and the expanding number of telephone carriers in each geographic market are creating more demand for our products.

"In September 1998, COMARCO introduced BaseLINE(TM), allowing wireless carriers to track the quality of their networks, as well as the quality of their competitors systems.

"Our call box business (emergency roadside phones) had significant growth in FY99 -- growth that will be boosted by the recently announced contracts in the Los Angeles and San Francisco markets. Installation on these contracts, valued at $7 million, is scheduled to start in April and be completed in about 12 months. COMARCO continues to dominate this niche market.

"For several years Comarco Wireless has been developing a new business area. Late in the year we launched this business with the introduction of CHARGESOURCE(TM). The explosive growth of portable computing and communications devices has created a demand for a universal power adapter that can charge all of the devices needed by a business traveler.

"CHARGESOURCE(TM) meets this demand with a form factor that is one-half inch thick, and weighs approximately 4 ounces. CHARGESOURCE(TM) is now available in retail electronics stores.

"COMARCO's staffing segment, especially our information technology business, experienced solid growth this year. Reversing a trend of several years, these businesses have excellent growth prospects and positive momentum heading into FY00.

"In addition, COMARCO repurchased 280,000 shares of its common stock during the last year and over 1.2 million shares in the last seven years. These repurchases have added significantly to our earnings per share. We have found the repurchase program an excellent, tax efficient way to add shareholder value and to return cash generated by the business to our shareholders.

"With both our wireless communications and staffing businesses expanding, especially the rapid growth of the call box business, as well as the introduction of the power adapter into retail channels, COMARCO's sales and profit outlook is currently very promising. The positive effects of the share buyback program add to our increasingly bright future."

For further information contact Don Bailey at 714/796-1800 or the Shareholder Information Office at 714/796-1818. The company's Web sites can be found at www.cmro.com or www.comarco.com.

COMARCO provides wireless communications products, as well as engineering and information technology, management and staffing services, to the public and private sectors.

Except for historical information contained herein, the matters set forth in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include such factors as the level of sales of the company's wireless communications products; timely and cost-effective product development; foreign marketing; the level of competition for the company's products and services; the company's ability to meet contractual commitments with the company's customers; and the ability to meet the technical requirements of the company's customers. Investors are also directed to consider a more detailed description of risks and uncertainties facing the company discussed in documents filed by the company with the Securities and Exchange Commission. -0-

                      COMARCO Inc. (Nasdaq:CMRO)
                      STATEMENT OF FINANCIAL DATA
                          STATEMENT OF INCOME
             (Dollars in Thousands, Except Per-Share Data)

                           Three Months Ended           Year Ended
                          Jan. 31,     Jan. 31,     Jan. 31,    Jan. 31,
STATEMENT OF INCOME        1999         1998         1999        1998

Revenue                 $ 24,001     $ 22,052     $ 91,964    $ 85,139

Direct Costs              13,483       12,574       54,268      49,891

Indirect costs             7,359        7,210       28,828      27,079

Intangible asset
 write off                                710                      710

Total operating costs     20,842       20,494       83,096      77,680

Operating income        $  3,159     $  1,558     $  8,868    $  7,459

Net interest income           45           68          298         404

Income before income
 taxes                     3,204        1,626        9,166       7,863

Income taxes               1,218          618        3,483       2,988
  Tax rate                    38%          38%          38%         38%

Net income              $  1,986     $  1,008     $  5,683    $  4,875

Earnings per share
  Basic                 $   0.45     $   0.21     $   1.23    $   1.03
  Diluted               $   0.40     $   0.18     $   1.13    $   0.89

Weighted average shares
 of common stock
  Basic                    4,442        4,717        4,608       4,744
  Diluted                  4,940        5,644        5,049       5,494


Comarco Wireless

 Sales                  $ 10,907     $  8,569     $ 34,004    $ 29,524

 Operating Income       $  3,059     $  1,885     $  7,148    $  6,733


SELECTED BALANCE                         Jan. 31,   Jan. 31,   Jan. 31,
 SHEET ITEMS                              1999       1998       1997

Cash and short-term investments         $ 5,995    $ 7,604   $ 14,535
Net accounts receivable                  23,151     17,815     11,526
Inventory                                 4,157      5,247      3,042
Current assets                           35,990     32,881     31,360
Long-term investments (highly liquid)       526      2,364      1,859
Property and equipment, net               2,424      2,240      1,408
Intangible assets, net                    3,587      2,660      1,842
Total assets                             47,287     43,894     39,210
Current liabilities                      14,157     11,944     10,931
Long-term debt                               --         --         --
Total shareholders' equity               31,202     30,470     26,977