Carver Corporation Announces Third Quarter Results.

WOODINVILLE, Wash.--(BUSINESS WIRE)--Nov. 13, 1997--Carver Corporation (NASDAQ:CAVR) today reported financial results for the third quarter and nine months ended September 30, 1997.

Total revenues for the three months ended September 30, 1997, decreased by 42% to $2,511,000, from $4,336,000 for the same period in 1996. The company reported a net loss of $999,000, or $0.26 per share, for the quarter, compared to a net loss of $89,000, or $0.02 per share, for the comparable period last year.

For the nine months ended September 30, 1997, total revenues were $7,054,000 compared with $11,729,000 for the first nine months of 1996. Net loss for the nine month period was $2,275,000, or $0.59 per share, versus a net loss of $1,444,000, or $0.39 per share, for the comparable 1996 period.

The company announced that the reduction in revenues from 1996 to 1997 was largely attributable to initial stocking orders shipped by the company in the prior year and vendor delivery delays on three new key products. The company began receiving limited quantities of two of the three products in the second quarter of 1997. However, demand for these two products continues to exceed the ability of the company's vendor to supply. The third product has been canceled by the company.

As announced earlier this year, the company had planned to ship the first of three models of home theater loudspeaker systems in the third quarter. However, production of the loudspeakers was delayed until late September. The first loudspeaker deliveries were made in late September 1997. The company has received an initial forecast for orders from its dealers for approximately $5.5 million. Approximately $3.4 million of these forecasted orders are scheduled for delivery through the end of the fourth quarter 1997.

The company also announced the resignation of its President and Chief Executive Officer, Stephen M. Williams on November 11, 1997. Mr. Williams will continue as a member of the Board of Directors and will serve as a consultant to work with the company's investment banker on certain strategic projects.

The company also announced that James J. Croft, the company's Vice President of Research and Development, resigned on October 14th to accept employment as the Vice President of Engineering of American Technology Corp. (OTC:ATCO), a developer of electronic and acoustic technologies. Mr. Croft has worked closely with ATC over the last year and a half in the development of high fidelity stereo and multi-channel audio application of ATC's patented HyperSonic Sound technology. As a future licensee of this technology for consumer audio applications, the company believes that Mr. Croft's employment by American Technology Corp. may expedite the development of the technology which could allow the company to bring products incorporating the technology to market sooner. Mr. Croft will continue to advise the company on marketing strategies and product development matters.

As previously reported, management has determined that the company must obtain additional working capital in the near term in order to execute its business plan. The exact amount and timing of the company's need for additional working capital will be determined by numerous factors including: the extent to which the company is able to negotiate more favorable payment terms with the company's suppliers and customers; the timing, level of and margin on sales; the ability to revise purchase orders; and the amount of resources for product development and other operating expenses. The company is actively seeking additional working capital from a variety of sources. As previously announced, the company has retained outside advisors to help explore and advise on its strategic alternatives.

Statements in this news release concerning development, introduction and shipment of new products, orders for product, ability to obtain additional operating capital and other statements that may be construed as a prediction of future performance or events are forward-looking statements involving known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such statements. These factors include changes in economic conditions and market demand, timely development, production, release and market acceptance of new products, ability of the company to overcome technical challenges in the development of new products, pricing and other activities by competitors, retention of key personnel, reliance on key suppliers, level of sales by dealers and other risks including those described from time to time in the company's filings with the Securities and Exchanges, press releases and other communications.

For almost 20 years, Carver Corporation has been one of the most recognized brands in consumer audio. The company designs, develops, manufactures and markets hi-fidelity audio and home theater products to the mid- to high-end audio entertainment systems market. The company's audio products are carried in a broad range of audio outlets nationwide, including Circuit City stores.

See www.carver.com . -0-

                              Quarter Ended       Nine Months Ended
                             ---------------------------------------
                                 Sept 30,              Sept 30,
                             ---------------------------------------
                              1997    1996           1997     1996
                             ---------------------------------------
Net Sales
   Domestic Consumer          1,328   1,746          3,993    4,466
   Circuit                      861   2,021          2,044    5,206
   Professional Line                      -              -      432
   OEM                                   91              -      118
   International                191     293            595      985
  Other                         131     185            422      522
                             ---------------     -------------------
Total Net Sales               2,511   4,336          7,054   11,729

Cost of Sales                 2,185   3,093          6,290    9,148
                             ---------------     -------------------
Gross Margin                    326   1,243            764    2,581
                                13%     29%            11%      22%
Operating Expenses:
   Selling                      427     674          1,593    1,856
   General & Administrative     586     461          1,758    1,470
   Engineering, Research
    & Development               278     176            783      507
   Restructuring charges          -       -              -        -
   Gain on Sale of
    professional prod line                -                       -
                             ----------------     -------------------
Total Operating Expenses      1,291   1,311          4,134    3,833
                             ---------------      ------------------

Income (Loss) from
 Operations                    (965)    (68)        (3,370)  (1,252)

Other Income (Expense)
   Gain on sale of
    headquarters facility         -       -            859        -
   Interest Expense             (34)    (37)           (87)    (180)
   Interest Income                -       1              7       50
   Other                          -      15            316     (62)
                             ---------------      ------------------
Net Income (Loss)              (999)    (89)        (2,275)  (1,444)
                             ---------------      ------------------

Net Loss Per Common
  Share                       (0.26)  (0.02)         (0.59)   (0.39)


                            Sept 30, 1997   Dec 31, 1996
                            ----------------------------
Cash & Short term
  Investments                        119             70
Net Receivables                    1,850          1,627
Inventory                          4,644          4,176
Other Assets                         436            907
Net Property, Plant
  & Equipment                        837          2,444
                            ----------------------------
Total Assets                       7,886          9,224
                            ----------------------------

Total Liabilities                  2,886          2,066
                            ----------------------------
Shareholders Equity                5,000          7,158
                            ----------------------------
Total Liabilities &
  Equity                           7,886          9,224
                            ----------------------------

CONTACT: Carver Corporation

John P. World, Executive V. President

425/482-3400