CP Clare announces second quarter results and restructuring of operations.

LEXINGTON, Mass.--(BUSINESS WIRE)--Oct. 24, 1996--C.P. Clare Corporation (NASDAQ:CPCL), a recognized world leader in the communications components marketplace, announced today that net sales declined six percent for the second quarter of fiscal 1997, compared with the second quarter of fiscal 1996. This quarter's results reflect a major restructuring of the Company's operations, primarily in its Reed Relay business.

For the quarter ended September 29, 1996 net sales were $30.0 million compared to $31.9 million for the quarter ended October 1, 1995. Included in operating results for the second quarter of fiscal 1997 were non-recurring charges of $14.75 million for restructuring and $1.25 million for environmental remediation costs. After considering these non-recurring costs the Company had a net loss of $12.4 million (loss of $1.39 per share) compared to net income of $1.8 million (income of $0.23 per share) for the same period last year. Excluding these charges, the Company had an operating profit of $1.9 million and net income of $1.4 million (income of $0.15 per share) for the quarter ended September 29, 1996.

For the six months ended September 29, 1996 net sales increased by 3.5 percent to $64.1 million from $61.9 million for the same period last year. After considering the non-recurring costs described above, the Company had a net loss of $9.6 million (loss of $1.09 per share) for the six months ended September 29, 1996 as compared with net income of $2.9 million (income of $0.42 per share).

"Market conditions significantly reduced demand for our reed relay products and we have seen a softening in the low end of the datacom market for semiconductor relays, partially attributable to customer inventory adjustments and anticipated technology improvements. September has been a traditionally strong sales period for companies involved in the technology sector. However, some of our major customers, who are also leading companies in the market for data and voice communications, delayed component purchases," said Arthur R. Buckland, President and Chief Executive Officer.

"As stated in our September 17th pre-announcement, I am very disappointed with the financial results that we have just announced and I am determined to restore C.P. Clare to the type of growth it achieved for the three years preceding this quarter," said Buckland.

C.P. Clare Corporation (NASDAQ:CPCL) is a leading provider of semiconductor and electromagnetic relays, switches, and specialized electronic components to the world's foremost manufacturers of electronic communication equipment.

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           CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
           (dollars in thousands, except per share amounts)
                            (Unaudited)


                        Three Months Ended       Six Months Ended

                        Sept. 29,   Oct. 1,      Sept. 29,  Oct. 1,
                           1996      1995          1996      1995

Net sales             $  30,019 $  31,900     $  64,057 $  61,886
Cost of sales            19,796    21,888        42,210    42,603
  Gross profit           10,223    10,012        21,847    19,283
Operating expenses:
    Selling, general
      and
      administrative     7,929      5,848        14,236    11,435
    Research and
     development         1,633      1,013         2,971     1,876
    Restructuring
      costs             14,750          -        14,750         -
  Operating (loss)
    income             (14,089)     3,151       (10,110)    5,972
Interest income            368        277           901       313
Interest expense          (117)      (144)         (236)     (989)
Other expense, net         (47)      (174)         (148)     (229)
  (Loss) income before
     provision for
     income taxes      (13,885)     3,110        (9,593)    4,997
Provision for income
  taxes                  1,446     (1,272)          (54)   (2,049)
   Net (loss) income $ (12,439)  $  1,838      $ (9,647) $  2,948
Net (loss) income
  per common and
  common share
  equivalent         $   (1.39)  $   0.23      $  (1.09) $   0.42
Weighted average
  number of common
  shares and common
  share equivalents
  outstanding        8,941,473  7,851,878     8,886,909  7,060,697



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                CONSOLIDATED CONDENSED BALANCE SHEETS
                      (dollars in thousands)
                           (Unaudited)

                                           Sept. 29,     March 31,
                                             1996          1996
ASSETS

Current assets:
  Cash, cash equivalents and investments   $ 43,616      $ 49,082
  Accounts receivable, less allowance for
   doubtful accounts                         17,161        19,471
  Inventories                                21,048        16,972
  Other current assets                        3,731         2,938
Total current assets                         85,556        88,463
Property, plant and equipment, net           30,658        24,232
Other assets                                  2,649         4,001
Total assets                               $118,863      $116,696

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities                        $ 33,139      $ 22,426
Long-term debt, net of current portion        3,236         4,034
Other long-term liabilities                   3,688         3,624
Total liabilities                            40,063        30,084
Stockholders' equity                         78,800        86,612
Total liabilities and stockholders' equity $118,863      $116,696

CONTACT: Robert M. Palladino

617/863-8700 x. 704