Coded Communications announces first-quarter 1995 results of operations.

CARLSBAD, Calif.--(BUSINESS WIRE)--May 25, 1995--Coded Communications Corp. (NASD OTC Bulletin Board:CODE)(VSE:CCI) Thursday announced results of operations for the first quarter ended April 1, 1995.

For the first quarter of 1995, the net loss was $1,723,000, or 14 cents per share, compared with a net loss of $1,978,000, or 17 cents per share, in the same period last year. Revenue in 1995 decreased by 15 percent to $2,224,000 from $2,616,000 last year.

Sales of mobile data communications products increased 12 percent over the prior year; however, aerospace product sales decreased in 1995 primarily as a result of delays in shipments due to shortages of materials.

New orders in 1995 were approximately $1.4 million, compared with $2.2 million last year. Backlog at April 1, 1995, was approximately $9 million compared to $5.4 million at April 2, 1994, an increase of 67 percent over the prior year.

Jack Robinson, Coded's recently appointed chief executive officer and president, commented: ``As previously announced, we initiated a major restructuring of our business operations in the first quarter to focus on our growing domestic markets.

``The restructuring significantly reduced operating expenses and focused our marketing efforts on domestic markets. As a result, we anticipate a tangible improvement in operating results beginning in the second quarter of 1995 and continuing throughout the year.''

Robinson noted that the company's critical working capital position impacted sales levels in the first quarter and will have an effect on revenues in the second quarter. Robinson commented that a new bridge loan providing $500,000 in loans for working capital closed near the end of the month in April and sales levels will improve substantially in the final weeks of the second quarter.

Robinson added: ``We expect new order bookings in the second quarter of 1995 to increase by more than 50 percent compared to the first quarter, reaffirming customer commitment to Coded's products and capabilities. As a result of the actions taken by management in the last two months to reduce expenses the company expects to achieve profitable operating levels and to begin to restructure our liabilities.

``Coded's major investment in R&D over the last two years has positioned the company with one of the strongest end-to-end wireless communications system solutions in its markets. Our customers are demanding total solutions for their mobile communications networks and we are one of only a few companies with the capabilities and products for these customers.''

Robinson said that in April and May substantially all holders of the company's $1 million principal amount 13.5 percent convertible debentures converted their bonds into 1,287,000 shares of the company's common stock at a conversion price of 75 cents per share.

In closing, Robinson said: ``We are working to recapitalize the company, as evidenced by the conversion of nearly $1 million in short-term debt into equity. It will be several more weeks before the outcome is known on the proposed composition settlement plan presented to all unsecured creditors earlier this month.

``Under that plan, unsecured creditors would agree to accept a settlement of 50 percent of their claims, with payment to be over an extended period of time. We believe the acceptance of a settlement plan is key to our recapitalization plan, and the composition plan presented by the company is significantly more favorable to unsecured creditors than recoveries, if any, that would be available to them under other alternatives.''

With headquarters in Carlsbad, Calif., Coded Communications is a leader in providing wireless data and aerospace telemetry solutions to public safety, government entities and commercial customers worldwide. -0-

                       CODED COMMUNICATIONS CORP.
                    SUMMARIZED FINANCIAL INFORMATION
                              (Unaudited)

                           Three Months Ended            Year Ended
                         April 1,      April 2,           Dec. 31,
                           1995          1994               1994

Operating data:
  Net sales            $ 2,224,000   $ 2,616,000        $ 14,291,000
  Gross margin              (2,000)      907,000           3,803,000
  Operating expense      1,517,000     2,723,000          13,853,000
  Restructuring expense         --            --           3,157,000
  Net loss              (1,723,000)   (1,978,000)        (12,929,000)
  Net loss per share     (14 cents)    (17 cents)       $      (1.07)
  Average shares        12,568,000    11,535,000          12,127,000

Balance sheet data:
  Current assets       $ 4,851,000                      $  6,557,000
  Short-term debt        5,920,000                         6,051,000
  Current liabilities,
   excluding debt        9,707,000                         9,738,000
  Net working capital
   (deficit)           (10,776,000)                       (9,232,000)
  Total assets           6,309,000                         8,175,000
  Shareholders'
   deficit              (9,318,000)                       (7,614,000)

CONTACT: Coded Communications

Jack Robinson, 619/431-1945

or

The Gibson Group

Lawrence Gibson, 619/431-1945