Comdial reports strong first quarter results.

CHARLOTTESVILLE, Va.--(BUSINESS WIRE)--April 18, 1995--Comdial Corp. (Nasdaq NM:CMDL) Tuesday reported sales of $22.3 million for its first quarter ended April 2, 1995, a 27 percent gain over last year's first quarter sales of $17.6 million.

Net income for the quarter was up substantially to $1.23 million, and net income applicable to common shares (after preferred dividends of $143,000) was $1.09 million, or 5 cents per share. This compares to first quarter 1994 net income of $226,000 and net income applicable to common shares (after preferred dividends of $106,000) of $120,000, 1 cent per share. Last year's first quarter earnings included a one-time recapitalization charge of $389,000.

According to Comdial President and CEO William G. Mustain, the strong first quarter results reflected the market's continued acceptance of the company's advanced digital telephony products, particularly the 224-port DXP, Comdial's upper-end, expandable digital telephone switching system. DXP is the cornerstone of Comdial's leadership position in the fast-growing Computer Telephony Integration (CTI) market.

Mustain commented, "Our first quarter sales and net income exceeded our original expectations, and, with the continuation of a favorable economic climate, I am confident we will see an even stronger second quarter and another good year for Comdial."

Going into the second quarter, dealer sales have been running 25 percent ahead of 1994 levels, with a resulting order pipeline of $8.5 million. In order to keep pace with the strong order rate for Impact digital terminals, DXP and other products, the company has added a third shift in its circuit board production area and expanded its surface mount production capacity. Factory employment during the first quarter increased 15 percent over first quarter 1994 levels, and, to keep up with increased product demand, additional growth in factory employment is expected for the balance of 1995.

"We believe that the success of the DXP is a direct result of heightened end-user demand for CTI-based products," Mustain said. "DXP was designed from the ground up to accommodate CTI requirements, and the payoff is evident in our expanding role in the CTI market."

During the first quarter, Comdial began alpha testing an even larger version of the DXP slated for introduction in the latter half of this year. The company also began shipping its new digital "Scout" wireless multi-line phone during the first quarter.

In March, Comdial participated in the 1995 Computer Telephony Conference and Exhibition in Dallas, and, according to Mustain, the company had one of the busiest exhibits at the show. "We generated significant interest in our CTI products at the conference, and CTI applications from eleven of our independent software vendors were demonstrated in our booth. A highlight of the show was the introduction of our new CT Direct software catalog, an innovative approach to assist software vendors and developers in marketing CTI applications," Mustain said.

Borrowing from direct marketing methods, the catalog includes proven software applications from independent software vendors and developers that are compatible with the telephony interface standards established by Novell and Microsoft. Comdial introduced CT Direct to accelerate the sale of software from independent software vendors to resellers, thereby encouraging the development of more third-party CTI applications. An increase in the available library of CTI applications will help drive future DXP sales. Over 5,000 CT Direct Catalogs have been distributed to date and software orders are now being accepted by the software suppliers listed in the catalog.

Comdial Corp. is a leading designer, manufacturer and supplier of a broad range of advanced telecommunications products and systems solutions based on Computer Telephony Integration (CTI). -0-

                              Comdial Corp.
                         Selected Financial Data
                (In thousands, except per share amounts)

                                          First Quarter Ended
                                    April 2, 1995    April 3, 1994
Net Sales                                 $22,316          $17,639
Gross Profit                                7,124            5,866
Income Before Extraordinary Item            1,230              615
Net Income                                  1,230              226
Preferred Dividends                           143              106
Net Income Applicable to Common Stock       1,087              120

Earnings per Share                          5 cents          1 cent

Weighted Average Shares:  Primary          21,659           21,753

CONTACT: South Coast Communications Group, Irvine, Calif.

Marty Tullio (investors)

or Owen Daley (media), 714/252-8440