Centigram Communications Reports Third Quarter 1999 Results.

SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 17, 1999--

Centigram Communications Corporation (NASDAQ:CGRM) reported net revenues of $21.0 million for the third quarter, ended July 31, 1999, compared to pro forma net revenues of $18.3 million for the third quarter ended August 1, 1998, and $20.8 million for the second quarter, ended May 1, 1999.

The net loss for the third quarter was $175,000 or $0.03 per share, compared with a pro forma net loss of $10.1 million or $1.47 per share for the third quarter of 1998, and a net loss of $192,000 or $0.03 per share for the second quarter of 1999. Pro forma net revenues and net loss exclude product sales and expenses of the company's CPE business unit that was sold to Mitel Corporation in May 1998.

"The third quarter represented our sixth consecutive period of revenue growth," reported Bob Puette, president and chief executive officer of Centigram.

"During the quarter we continued to focus on extending our product offering from messaging to unified communications including links to the Internet and advanced networking capabilities integrated into the Centigram platform," he said.

Centigram Communications Corporation (NASDAQ:CGRM) is a leading global provider of advanced wireless (analog, GSM, PCS, TDMA, CDMA and paging companies) and wireline (PTTs, BOCs, service bureaus, independent telcos and cable telephony companies) messaging and unified communications solutions to network operators in the telecom service provider market. The Company delivers these communications solutions by integrating voice and facsimile on its Series 6 communications server based on industry standard hardware and software. Centigram is headquartered at 91 East Tasman Drive, San Jose, Calif., 95134. Phone [phone], fax [phone], or Web http://www.centigram.com. Centigram has sales and support offices in North America, Europe, Asia, Latin America, and Australia.

This press release contains forward-looking statements regarding the industry and the Company. Actual results could differ materially from those projected in any forward-looking statements. The statements could be affected by the Company's "Sales and Distribution" and other risks as reflected in their 10-K document for fiscal year ended October 31, 1998 or 10-Q document for the second quarter ended May 1, 1999 filed with the Securities and Exchange Commission. In addition, the company's future success will depend in part upon the ability of the Company to continue to introduce new features and products as the Company's markets evolve, new technologies become available, and customers demand additional functionality. All trademarks and registered trademarks are the property of their respective owners. -0-

                 CENTIGRAM COMMUNICATIONS CORPORATION
            Consolidated Condensed Statements of Operations


                                 Quarter Ended     Nine Months Ended
(In thousands, except per
 share amounts -(unaudited)     July 31,   Aug 1,    July 31,  Aug 1,
                                 1999      1998       1999      1998

Net revenue                    $21,016    $18,143   $62,084   $57,503
Costs and expenses:
 Cost of goods sold              9,106      8,837    26,808    28,061
 Research and development        3,914      4,056    12,256    14,143
 Selling, general
  and administrative             8,646      9,826    25,596    31,648
 Non-recurring charges(a)            -     10,600         -    10,600
 Total costs and expenses       21,666     33,319    64,660    84,452
Operating (loss)                  (650)   (15,176)   (2,576)  (26,949)
Other income and expense, net(b)   585     15,074     1,845    16,403
Income (loss) before income taxes  (65)      (102)     (731)  (10,546)
Provision for income taxes         110        164       315       304
Net income (loss)                $(175)     $(266)  $(1,046) $(10,850)
Basic and diluted income
(loss) per share                $(0.03)    $(0.04)   $(0.17)   $(1.56)
Shares used for basic
 and diluted EPS                 6,071      6,885     6,325     6,966


Consolidated Condensed Statements of Operations Pro forma

                                   Quarter Ended    Nine Months Ended
(In thousands, except
 per share amounts -(unaudited)   July 31,  Aug 1,   July 31,  Aug 1,
                                    1999     1998      1999     1998

Net revenue                       $21,016  $18,266  $62,084   $46,606

 Costs and expenses:
  Cost of goods sold                9,106    9,024   26,808    23,520
  Research and development          3,914    4,371   12,256    13,676
  Selling, general
   and administrative               8,646   10,024   25,596    28,313
  Non-recurring charges (a)             -    5,600        -     5,600
 Total costs and expenses          21,666   29,019   64,660    71,109
   Operating (loss)                  (650) (10,753)  (2,576)  (24,503)
    Other income and expense, net     585      779    1,845     2,135
   Income (loss) before income taxes  (65)  (9,974)    (731)  (22,368)
   Provision for income taxes         110      164      315       304
   Net income (loss)                $(175)$(10,138) $(1,046) $(22,672)
   Basic and diluted income
   (loss) per share                $(0.03)  $(1.47)  $(0.17)   $(3.25)
  Shares used for
   basic and diluted EPS            6,071    6,885    6,325     6,966

(a) Includes In-process R&D write-off, $5,000 and intellectual
property dispute costs, $5,600.
(b) Includes gain on sale of CPE business unit.

Consolidated Condensed Balance Sheets

(In thousands, except per
  share amounts-(unaudited)         July 31, 1999    Oct. 31, 1998

 Cash, cash equivalents and
  short-term investments               $42,959         $57,190
 Accounts receivable, net               16,802          14,566
 Inventories                             2,294           5,297
 Other assets                           15,610          18,924
 Current liabilities                    19,156          30,769
 Stockholders' equity                   58,509          65,208