CP CLARE announces record second quarter results and signed a Letter of Intent to acquire a German reed relay business.

LEXINGTON, Mass.--(BUSINESS WIRE)--Oct. 26, 1995--CP Clare Corporation (NASDAQ:CPCL) a recognized world leader in the semiconductor and electromagnetic relay marketplace, announced today net sales increased 42.7 percent and net income increased over tenfold in its second quarter of fiscal 1996.

The company also announced it has signed a Letter of Intent to purchase the reed relay business of Elfein GmbH for approximately $1.8 million.

For the quarter ended Oct. 1, 1995 net sales reached $31.9 million compared to $22.4 million for the quarter ended Oct. 2, 1994. Net income reached $1.8 million ($0.23 per share) compared to net income of $183,000 ($0.03 per share) for the same period last year.

For the six months ended Oct. 1, 1995 net sales reached $61.9 million compared to $44.1 million for the six months ended Oct. 2, 1994. Net income increased 873.2 percent to $2.9 million ($0.42 per share) compared to net income of $298 thousand ($0.06 per share) for the same period last year.

"Our second quarter was an important one for CP CLARE," stated Arthur R. Buckland, president and chief executive officer. "I am pleased to report our positive financial trend continued this quarter and demand for our semiconductor and advanced magnetic products maintained their record pace.

"The acquisition of Elfein's product lines exemplify our acquisition strategy -- to acquire businesses in those areas where we have either product or technology gaps and enter new markets," Buckland continued. "I am also pleased to announce we are currently in negotiations with NEC of Japan to acquire their mercury switch production equipment. We expect this acquisition will give us an immediate entree into the high growth Japanese marketplace.

"We signed a Letter of Intent in July to construct a new semiconductor facility in Beverly, Mass.," Buckland continued. "The new facility, which we expect to have on line in early 1997, should significantly increase our manufacturing capacity and will allow us to utilize 5-inch wafers rather than the 4-inch wafers originally anticipated. The advantages of these larger wafers are numerous including capacity yield, quality, and expanded marketing and application opportunities.

"Earlier this quarter we announced the formation of the Reed Relay Products business unit which combines our Dry and Wet Reed businesses and provides CP CLARE with enhanced marketing leverage," Buckland continued. "We now have in place the manpower and expertise to take advantage of an expanding marketplace, namely automated test equipment and increase market share in Europe and Asia.

"The major market segments CP CLARE addresses - telecommunications, datacommunications and computer telephony have enjoyed unprecedented growth. With effective execution of our expansion and acquisition strategies, we are optimistic our growth can mirror the growth of these industries," Buckland concluded.

CP CLARE Corporation is a leading provider of semiconductor and electromagnetic relays, switches, and specialized electronic components to the world's foremost manufacturers of electronic equipment.

               CP CLARE CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF OPERATIONS
          (dollars in thousands, except per share amounts)
                              (Unaudited)

                         Three Months Ended       Six Months Ended
                         Oct. 1,    Oct. 2,        Oct. 1, Oct. 2,
                          1995         1994       1995      1994

Net sales              $ 31,900     $ 22,355     $61,886 $ 44,074
Cost of sales            21,888       16,315      42,603   32,472
Gross profit             10,012        6,040      19,283   11,602
   percentage             31.4%        27.0%       31.2%    26.3%

Operating expenses:
Selling, general and
   administrative         5,848        4,180       11,435   8,068
Research and development  1,013          854        1,876   1,636

Operating income          3,151        1,006        5,972   1,898

Interest expense            144          698          989    1440
Other income                103           18           14     106

Income before provision
  for income taxes        3,110          326         4,997    564
Provision for income
      taxes               1,272          143         2,049    266

Net income              $ 1,838       $  183      $  2,948  $ 298

Net income per common
  and common
   share equivalent     $  0.23        $ 0.03      $ 0 .42   $ 0.06

Weighted average number
  of common shares and
  common share
  equivalents
   outstanding            7,852        6,612         7,061   6,601

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                 CP CLARE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED BALANCE SHEETS
                        (dollars in thousands)

                                       Oct. 1, 1995     April 2, 1995
                                               (Unaudited)
ASSETS
Current assets:
    Cash and cash equivalents             $ 9,042       $   1,181
    Accounts receivable, less
    allowance for doubtful accounts        18,001          15,711
    Inventories                            14,729          11,757
    Other current assets                    2,557           2,701
Total current assets                       44,329          31,350

Property, plant and equipment, net         21,734          19,677

Other assets                                3,610           4,244

Total assets                            $  69,673        $ 55,271

LIABILITIES AND
STOCKHOLDERS' EQUITY

Current liabilities:                    $  25,638        $ 32,930
Long-term debt,
    net of current portion                  4,096          15,969
Other long-term liabilities                 2,880           3,420
Total liabilities                          32,614          52,319

Stockholders' equity:                      37,059           2,952

Total liabilities and
stockholders' equity                     $ 69,673        $ 55,271

CONTACT: Linda J. Sadowski

Investor Relations

617/863-8700 Ext. 750