Castelle's U.S. Distribution Team, Lead by Ingram Micro and Tech Data, Key to Sales Growth in Fourth Quarter 2002.

Business Editors/High-Tech Writers

MORGAN HILL, Calif.--(BUSINESS WIRE)--March 4, 2003

Fourth Quarter 2002 U.S. Distribution Sales

Reach Highest Level in Three Years

Castelle Announces New Director of Distribution Sales

to Focus on Expanding U.S. Distribution

Castelle (Nasdaq:CSTL), a leading provider of office automation solutions for Fortune 1000 companies and small to medium-sized businesses, today announced that U.S. distribution sales for the Company's fourth quarter, ended December 31, 2002, reached a three year high. The Company recently reported total sales of $2.59 million for the fourth quarter of 2002, representing a 10% increase over sales of $2.34 million in the fourth quarter of 2001.

Ingram Micro and Tech Data Drive Fourth Quarter Sales Growth

Castelle's two largest distributors, Ingram Micro (NYSE:IM) and Tech Data (Nasdaq:TECD), each had their highest sales of Castelle products for 2002 in the fourth quarter, collectively showing a 28% increase over the same period in 2001 and, on a sequential basis, a 20% increase over the third quarter of 2002.

Fourth quarter 2002 sales through Ingram Micro reached a ten quarter high, while sales through Tech Data exceeded its highest level in over four years.

"We are proud of our strong U.S. distribution team, lead by Ingram Micro and Tech Data, and are extremely pleased with our fourth quarter distribution sales," stated Scott McDonald, President and CEO. "Contributing to our success was the release of our FaxPress 7.0 network fax software in October and the introduction of a new reseller program in November, as well as targeted marketing programs at both Ingram Micro and Tech Data that helped increase awareness and demand for our products."

Castelle's products are sold through a network of distributors, resellers, systems integrators, and online retailers, including Ingram Micro and Tech Data, who represent an integral part of the Company's sales channel. The Company also noted that the November launch of Castelle's reseller program enhances the Company's ability to recruit additional resellers, which is designed to increase distribution sales going forward.

Castelle Appoints New Director of Distribution Sales

Mr. McDonald concluded, "We recently promoted Todd Olsen to the newly created position of Director of Distribution Sales. In this new position, Mr. Olsen will focus his efforts on strengthening Castelle's relationship with our U.S. distributors. As a result, we look forward to building on our success in 2002 and expanding our solid, long-standing relationships with Ingram Micro and Tech Data."

During the past four years, Mr. Olsen, 36, served in various positions at Castelle, including Manager of Distribution Sales and Western Regional Sales Manager. Prior to joining Castelle, Mr. Olsen worked as a sales representative at Ingram Micro for six years.

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About Castelle

Castelle develops office automation systems that allow organizations to easily implement faxing and printing over local area networks and the Internet. A market leader in fax solutions for small to medium sized workgroups, Castelle's FaxPress fax servers provide a simple way to integrate fax with email, desktop and back-end applications. The Company also manufactures LANpress(R) print servers, which enable users to locate printers anywhere on the network. Castelle products are designed to be easy to use and maintain, and provide an economical way for companies to share resources over the network.

Castelle was founded in 1987 and is headquartered in Morgan Hill, California. Its products are utilized by Fortune 1000 companies as well as small to medium-sized businesses and are available through a worldwide network of distributors, value-added resellers, systems integrators, e-commerce retailers, and the Castelle Online Store. Visit Castelle online at www.castelle.com.

FaxPress is a trademark and LANpress is a registered trademark of Castelle.

Forward-Looking Statements 

This press release contains forward-looking statements, including references to demand for Castelle products and sales growth. These statements are subject to certain risks and uncertainties, including but not limited to, the impact on our results from fluctuations in demand for our products, difficulties in recruiting additional value added resellers, variations in U.S. distribution sales going forward, introduction of new products by our competitors, the timely development, acceptance and pricing of our new products and general economic conditions as they may affect the Company. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements as contained in our reports to the Securities and Exchange Commission, including our Forms 10-K and 10-Q. The Company assumes no obligation to update the forward-looking information.