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CONVEX COMPUTER CORPORATION ANNOUNCES SECOND QUARTER RESULTS

 RICHARDSON, Texas, July 26 /PRNewswire/ -- Convex Computer Corporation (NYSE: CNX) today announced its financial results for the second quarter, ending June 30, 1993. Revenue for the period was $45.1 million, vs. $57.5 million in the second quarter of 1992. The company reported a loss of $41.8 million, or $1.67 per share, in the second quarter of 1993. Included in this loss is a charge of $31.5 million, or approximately $1.25 per share, to cover the cost of a corporate restructuring program. In the second quarter of 1992, the company's net income was $.8 million, or 3 cents per share.
 "We continue to face a very difficult business environment," said Robert J. Paluck, Convex chairman and chief executive officer. "Around the world, our customers -- in both the commercial and government sectors -- are operating with extremely constrained capital budgets as they work to improve their organizations' profitability and efficiency. We believe these constraints have resulted in reduced spending levels and delayed decision making which is adversely affecting demand for our products.
 "Given this challenging environment, Convex is implementing an aggressive restructuring program designed to allow us to re-engineer and streamline our worldwide operations," Paluck continued. "By the fourth quarter of 1993, the program should reduce the company's operating costs by more than $22 million on an annualized basis. Our goal is to increase our competitive strength and to improve our financial performance." According to the company, the restructuring program will include a 16 percent reduction in Convex's workforce, the consolidation and elimination of certain facilities, and other improvement actions.
 "Our customers and prospects continue to make us confident that our business and product strategies will provide them with what they require for their long-term computing needs," said Paluck. "The actions announced today should not alter our product development plans, or the company's ability to sell and support our products worldwide. Excellent progress is being made on the development of our C4 Series and Scalable Parallel Processing (SPP) product lines, as well as the expansion of our data management product offerings. We believe that our efforts on new products, the actions we are announcing today, and our outstanding cooperation and relationship with Hewlett-Packard Company, all put us in a very strong strategic and competitive position for the future."
 Convex Computer Corporation is a leading worldwide supplier of high- performance computing technologies. The company markets its products primarily to scientific, engineering, and technical users for a wide variety of applications in areas such as seismic processing, reservoir simulation, computational chemistry, computer-aided engineering, image processing, aerospace simulations, and molecular biology. Convex has sold more than 1,200 systems to over 600 customers in 47 countries. The systems are sold and serviced through direct sales and an extensive distribution network.
 CONVEX CORPORATION
 Financial Highlights
 (Unaudited, in thousands, except per share data)
 Three Months Ended
 6/30/93 6/30/92 3/31/93
 Total revenue $ 45,090 $ 57,537 $ 59,084
 Operating income
 (loss) $(42,665) $ 1,821 $ 712
 Net income (loss) $(41,821) $ 755 $ 46
 Earnings per common
 share -- primary
 & fully diluted:
 Net income
 (loss) $ (1.67) $ .03 $ 0.00
 Weighted average
 shares outstand-
 ing -- primary: 25,110 24,349 25,138
 CONVEX COMPUTER CORPORATION
 Consolidated Statements of Operations
 (Unaudited, in thousands, except per share data)
 Three Months Ended Six Months Ended
 Periods
 ended June 30 1993 1992 1993 1992
 Revenue:
 Product and
 other revenue $ 28,650 $ 44,150 $ 70,372 $ 87,433
 Service revenue 16,440 13,387 33,802 24,577
 Total revenue: 45,090 57,537 104,174 112,010
 Costs and expenses:
 Cost of product and
 other revenue 17,497 22,453 38,435 44,324
 Cost of service
 revenue 11,824 8,489 23,831 15,245
 Research and
 development 8,757 8,048 17,334 15,956
 Selling, general and
 administrative 18,177 16,726 35,026 33,560
 Restructuring and
 other charges (a) 31,500 -- 31,500 --
 Total costs and
 expenses 87,755 55,716 146,126 109,085
 Operating income
 (loss) (42,665) 1,821 (41,952) 2,925
 Other income
 (expense), net (752) (606) (1,398) (1,097)
 Income (loss) before
 provision for
 income taxes (43,417) 1,215 (43,350) 1,828
 Provision (benefit)
 for income taxes (1,596) 460 (1,575) 669
 Net income
 (loss) $ (41,821) $ 755 $ (41,775) $ 1,159
 Earnings per common
 share -- primary
 & fully diluted:
 Net income
 (loss) $ (1.67) $ .03 $ (1.67) $ .05
 Weighted average
 shares outstand-
 ing -- primary: 25,110 24,349 25,024 24,052
 NOTES: (a) In July 1993, the company announced a restructuring program designed to reduce costs and increase the efficiency of the company's operations. The program included, among other items, severance of employees, the consolidation and elimination of certain facilities, the estimated costs of the write down of certain of the company's assets, as well as miscellaneous charges for other matters.
 CONVEX COMPUTER CORPORATION
 Consolidated Balance Sheet
 June 30, 1993
 (Unaudited, Dollars in thousands)
 ASSETS
 Cash, cash equivalents &
 short-term investments $ 61,895
 Receivables, net 67,074
 Current portion of long-term
 receivables 16,638
 Inventory 35,494
 Prepaid expenses and other
 current assets 18,387
 Total current assets 199,488
 Fixed assets, net 40,362
 Long-term receivables 22,933
 Long-term investments 17,407
 Other assets, net 2,417
 Total Assets $282,607
 Liabilities & Shareholders' Equity
 Current liabilities:
 Accounts payable $ 10,736
 Accrued payroll and
 related taxes 6,993
 Current portion of notes
 payable 11,905
 Deferred revenue 15,602
 Other current liabilities 35,079
 Total current liabilities 80,315
 Long-term liabilities:
 Notes payable 14,868
 6 percent convertible
 subordinated debentures 53,500
 Total long-term liabilities 68,368
 Shareholders' equity:
 Common stock 251
 Additional capital 147,624
 Retained earnings (11,254)
 Cumulative translation
 adjustment (2,697)
 Total shareholders' equity 133,924


Total Liabilities &
 Shareholders' Equity $282,607
 -0- 7/26/93
 /CONTACT: Bill Cool, 214-497-4956, or Donna Burke, 214-497-4230, both of Convex Computer Corporation/
 (CNX)


CO: Convex Computer Corporation ST: Texas IN: CPR SU: ERN

TM -- NY104 -- 5943 07/26/93 18:13 EDT
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Date:Jul 26, 1993
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