Comdial reports third quarter & nine month results; earnings per share up 47 percent on 22 percent sales growth for third quarter.

CHARLOTTESVILLE, Va.--(BUSINESS WIRE)--Oct. 18, 1995--Comdial Corp. (Nasdaq NM:CMDL) Wednesday announced that net sales for its third quarter ended Oct. 1, 1995, increased by 22% to $25.2 million, compared with $20.7 million in the third quarter of 1994.

Net income applicable to Common Stock for the third quarter ended Oct. 1, 1995 increased by 61% to $1.7 million, compared with $1.1 million for the previous year's quarter. Fully diluted earnings per share for the third quarter ended Oct. 1, 1995, increased by 47% to $0.22, compared with $0.15 for the previous year's quarter. Results for all periods have been adjusted to reflect the 1-for-3 reverse stock split effected during the third quarter of 1995.

Net sales for the nine month period ended Oct. 1, 1995, increased by 27% to $73.0 million, compared with $57.3 million for the same period in 1994.

Net income applicable to Common Stock for the nine month period ended Oct. 1, 1995, increased by 91% to $4.5 million (excluding a one-time tax benefit of $4.5 million resulting from a reduction in the valuation allowance relating to the company's federal net operating loss carryforward and an extraordinary expense of $389,000 relating to a one-time recapitalization charge) compared with $2.4 million for the previous year's period.

Fully diluted earnings per share for the nine month period ended Oct. 1, 1995 increased by 84% to $0.59 (excluding a one-time tax benefit of an additional $0.55 and an extraordinary expense of $0.05 per fully diluted share), compared with $0.32 for the previous year's quarter. Including the effects of the one-time tax benefit, for the nine month period ended Oct. 1, 1995, net income applicable to Common Stock was $9.0 million or $1.14 per fully diluted share.

Chairman, president and CEO William G. Mustain commented, "The strong sales increase is primarily attributable to fast-growing sales of the company's DXP switching platforms, Impact terminals, and CTI (Computer Telephony Integration) products. We announced on Aug. 30, 1995, that we are now taking orders for the DXP Plus, which doubles the CTI connectivity of current DXP platforms. A preliminary review of orders for the DXP Plus product shows an enthusiastic response both domestically and internationally.

"We are optimistic about the prospects for our new products, including both the DXP Plus and the newly announced PATI 3000 which broadens our CTI offering to a much larger group of potential customers. The PATI 3000 (PC And Telephone Interface) links analog telephones to personal computers running Microsoft Windows or Windows 95 operating systems. This linkage allows users to originate and process voice calls via the personal computer."

During the third quarter, the company effected a 1-for-3 reverse stock split, and completed a public offering of common shares that resulted in net proceeds to the company of $11.2 million. Subsequent to the offering, the company redeemed all outstanding Preferred Stock and made its final preferred dividend payment.

As a result of the public offering, the company's balance sheet improved substantially. As of Oct. 1, 1995, Comdial had current assets of $31.9 million and current liabilities of $13.5 million resulting in working capital of $18.4 million, and a current ratio of 2.4-to-1. Total assets were $53.8 million, and shareholders' equity was $33.4 million.

Comdial Corp. is a leading designer, manufacturer, and supplier of a broad range of advanced telecommunications products and systems solutions.

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                          COMDIAL CORPORATION
                        Selected Financial Data
       Consolidated Condensed Statements of Operations - Unaudited
(In Thousands, Except Per Share Amount)

                      Three Months Ended:       Nine Months Ended:
                    Oct. 1,       Oct. 2,      Oct. 1,     Oct. 2,
                      1995          1994         1995        1994

Net sales           $25,235       $20,660      $72,993     $57,318
Gross profit          8,054         6,383       23,432      18,371
Selling, general and
 administrative       4,707         3,653       13,887       11,055
Engineering, research
 and development      1,048         1,008        3,107        2,989
Interest expense        242           301          797        1,012
Miscellaneous expense   216           159          607          436
Income tax expense       37            17          154           77
Income before
 extraordinary item   1,804         1,245        4,880        2,802
Net income            1,804         1,245        4,880        2,413
Dividends on
 preferred stock         65           162          350          429
Net income applicable
 to common stock      1,739         1,083        4,530        1,984
Net income from tax
 benefit               ---            ---        4,503          ---
Total net income applicable
 to common stock     $1,739        $1,083       $9,033       $1,984

Earnings per common share
 and equivalent share:
 Income before
  extraordinary item  $0.22         $0.15        $0.61        $0.32
 Extraordinary item     ---           ---          ---        (0.05)

Net income per common
 share:
 Primary              $0.22         $0.15        $0.61        $0.27
 Fully diluted        $0.22         $0.15        $0.59        $0.27

Income gain from tax
 benefit:
 Primary                ---           ---        $0.60          ---
 Fully diluted          ---           ---        $0.55          ---
Total net income per
 common share:
 Primary              $0.22         $0.15        $1.21         $0.27
 Fully diluted        $0.22         $0.15        $1.14         $0.27

Weighted average common
 shares outstanding:
 Primary              7,910         7,231        7,482         7,246
 Fully diluted        8,307         7,231        8,239         7,246

               Consolidated Condensed Balance Sheets

                                    (Unaudited)         (a)
                                        Oct. 1           Dec. 31
(In Thousands)                            1995              1994

Assets
 Cash and cash equivalents              $1,746            $1,679
 Accounts receivable - net              10,788             6,637
 Inventory                              17,802            16,869
 Total current assets                   31,888            26,199
 Property - net                         13,106            13,668
 Deferred tax asset - net                6,484               ---
 Total assets                           53,807            42,260

Liabilities and Stockholders' Equity
 Accounts payable                        6,356             6,977
 Current maturities on debt              2,262             2,466
 Total current liabilities              13,490            14,568
 Long-term debt                          3,137             4,737
 Total liabilities                      20,418            21,217
 Stockholders' equity                   33,389            21,043
 Total liabilities and
  stockholders' equity                  53,807            42,260

(a) Condensed from audited financial statements

CONTACT: Comdial Corp.

Dick Bucci, 804/978-2200

OR

South Coast Communications, Irvine, Calif.

Marty Tullio, 714/252-8440