Clare Announces Third Quarter Fiscal 2001 Results; Appointment of Larry Mihalchik as CEO.

Business/Technology Editors

BEVERLY, Mass.--(BUSINESS WIRE)--Jan. 18, 2001

Clare, Inc. (NASDAQ:CPCL) announced today revenues of $19.7 million and a loss of $0.31 per share for the third quarter of fiscal 2001.

For the quarter ended December 24, 2000, net sales were $19.7 million compared with $21.6 million for the quarter ended December 26, 1999. The Company had a net loss of $3.0 million ($0.31 per share) for the quarter compared with a net loss of $2.2 million ($0.23 per share) for the same period last year.

For the nine months ended December 24, 2000, net sales were $60.9 million compared with $86.6 million for the quarter ended December 26, 1999, including $25.5 million in revenues from electromagnetic product lines which the Company sold in fiscal 2000. Net sales excluding divested product lines were $61.1 million for the first nine months of the prior year. For the nine months ended December 24, 2000, the Company had a net loss of $8.8 million ($0.92 per share) compared with net income of $7.6 million ($0.78 per share) for the same period last year. Excluding the gain from the sale of the electromagnetics business, the Company had a net loss of $5.4 million, or $0.57 per share during the comparable year-ago period. The third quarter and year-to-date results included a gain of $0.7 million from the sale of real estate.

"We continue to be disappointed with our financial results," stated Andy Lietz, Chairman of the Executive Committee of the Board of Directors. "We are extremely focused on improving our near term opportunities for sales of solid state relays, reed switches, and our data access array, LiteLink."

Mr. Lietz also announced several organizational changes. Effective today, Arthur Buckland has resigned his position as President, CEO and Director of Clare. Mr. Lietz and the Board expressed thanks to Art for his seven years of service at Clare.

Mr. Lietz also announced the appointment of Larry N. Mihalchik as President and CEO of the Company effective February 1, 2001. Mr. Mihalchik has been a member of the Clare Board of Directors since July, 1999. Most recently, he has served as President and CEO of ICOMS Corp., an internet applications service provider. Prior to that, Mr. Mihalchik was President and CEO of ATEX Media Solutions and Sr. Vice President and CFO of M/A-COM Corporation, a leading manufacturer of electronics components. Mr. Lietz commented further that Larry brings to Clare many years of experience in the electronics industry as well as a strong financial background.

Mr. Lietz will continue to serve the company as Chairman of the Board and Chairman of its Executive Committee. He further stated that he and Mr. Mihalchik will focus their energies on returning the Company to profitability, strategically positioning the Company in the electronic components marketplace, and growing shareholder value.

Clare is a leader in the design and manufacture of high-voltage analog circuits. The Company's products enable communications by providing the critical interface between high-voltage electrical signals and the low-voltage electronics that process those signals. Leading manufacturers of data communications, telecommunications, and industrial equipment around the world rely on Clare for semiconductors and specialized electronic components. Additional information about Clare can be found at www.clare.com.

Except for historical information contained herein, the matters set forth in this news release are forward-looking statements as defined under the federal securities laws. Actual results could differ materially from the information set forth herein and there is no assurance that any anticipated future results will be achieved.

C.P. CLARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in thousands)

                     ASSETS                    December   December
                                                  24,        26,
                                                 2000       1999
Current assets:
     Cash, cash equivalents and investments   $ 28,073   $ 33,422
     Accounts receivable, less allowance
      for doubtful accounts                      9,260     14,579
     Inventories                                14,199     12,615
     Other current assets                        4,216      8,078
                   Total current assets         55,748     68,694
Property, plant and equipment, net              26,108     26,988
Other assets, net                               10,787     10,289
                  Total assets                $ 92,643   $105,971


LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities                             11,977     11,171
Long-term liabilities                              198        685
          Total liabilities                     12,175     11,856
Stockholders' equity                            80,468     94,115
Total liabilities and stockholders' equity    $ 92,643   $105,971




C.P. CLARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands except per share amounts)

                         Three Months Ended        Nine Months Ended
                        December     December     December   December
                           24,          26,          24,         26,
                          2000         1999         2000        1999
Net Sales           $    19,698   $   21,617    $  60,939   $  86,590
Cost of Sales            14,435       15,748       43,805      67,472
  Gross profit            5,263        5,869       17,134      19,118
Operating expenses:
 Selling, general
  and
  administrative          5,203        5,005       16,853      17,689
 Research and
  development             4,115        3,500       10,834      10,162
 Gain on sale
  of real estate           (716)        --           (716)       --
 Restructuring
  costs                    --           --           --          (875)
 Gain on
  disposal of
  business
  activities,
  net of related
    restructuring
    and other
    costs                  --           --           --       (12,990)
 Operating (loss)
  income                 (3,339)      (2,636)      (9,837)      5,132
Interest income             345          332        1,378         594
Interest expense            (18)         (51)        (149)       (100)
Other income
 (expense), net              14          124         (211)        259
 (Loss) income
  before benefit
   for income
   taxes                 (2,998)      (2,231)      (8,819)      5,885
Benefit for
 income taxes                                                  (1,702)
   Net (loss)
    income          $    (2,998)  $   (2,231)   $  (8,819)   $  7,587

Basic and
 diluted
 (loss) earnings
 per share                (0.31)       (0.23)       (0.92)       0.80

Diluted (loss)
 earnings per
 share                    (0.31)       (0.23)       (0.92)       0.78

Weighted
 average
 number of
 common
 shares
 outstanding:

Basic                 9,677,691    9,522,942    9,628,645   9,496,522

Diluted               9,677,691    9,522,942    9,628,645   9,666,471