Computone Reports Increased Sales, Reduced Losses for Fiscal 2000; Despite Y2K-Driven Slowdown, IT Pioneer Showed 69% Improvement for Year.

Business Editors

ATLANTA--(BUSINESS WIRE)--June 30, 2000

Computone Corporation (OTC BB:CMPT), an IT pioneer and leader in connectivity products and remote access communications, has announced financial results for fiscal 2000 ended March 31, 2000, reporting increased sales and reduced losses despite an industry-wide Y2K-driven slowdown.

Computone reported sales of $11,198,000 for the year, an increase of 10% over $10,181,000 for fiscal 1999, despite sales for the three months ended March 31, 2000 of only $1,440,000 as compared with $2,606,000 for the same period a year ago. However, Computone reported a gross profit of $4,128,000 for fiscal 2000, 27% better than the $3,241,000 reported for fiscal 1999. It also showed a major improvement in losses, reporting $1,251,000 for fiscal 2000 as compared with a loss of $4,086,000 in fiscal 1999, a reduction of 69%.

"The post-Y2K quarter was perhaps the worst in history for the IT industry," said Perry Pickerign, president and CEO of Computone, noting his company's sales were down $1.16 million for the quarter and that sales were also down for the first quarter of its fiscal 2001, which began April 1, 2000.

"Computone became a much more efficient organization over the past year," said Pickerign. "The company showed a dramatic improvement in our bottom line of $2.8 million, and we have laid a firm foundation and increased our business relationships by adding several major strategic accounts, including Microsoft(R), Dell(R) and Ingram Micro(R) providing us with needed exposure and reach."

Pickerign said he was "not happy with the downturn in sales, like competitors and other industry players, I see recovery, especially as the gloom of Y2K fades. While first quarter sales will take a step back." Pickerign said, "Computone is now positioned to make several giant strides forward in the months ahead." He said the acquisition of Multi-User Solutions (see "Computone Acquires Leading Linux/Unix Service and Support Company," Business Wire, today) "is indicative of the brighter future we have already begun. By differentiating ourselves and entering the support and services arena, we anticipate it will profoundly increase sales and revenue.

"I am proud of our achievements in turning the boat in the midst of a storm and in our resourcefulness in adapting and overcoming very difficult circumstances, he said. While we anticipate the industry will recover, we also anticipate that by the second and third quarter a majority of Computone's revenue will come from new products and new applications developed and brought to market over the last six months. It is that type of responsiveness to competition and market conditions that makes organizations great," he said.

A pioneer and leader in the worldwide IT industry since 1984, Computone Corporation (OTC BB:CMPT, www.computone.com) designs, manufactures and markets a comprehensive line of remote access communications servers for Internet, LAN/WAN and Windows NT/SCO UNIX/Linux and other Open Systems. Computone is also a leading producer of high-speed multiport I/O boards, serving vertical markets including healthcare, retail/point-of-sale, banking and financial, telecommunications, Internet service providers (ISPs), transportation, hospitality and education. Based in the Atlanta suburb of Alpharetta, Computone sells through a worldwide network of authorized and certified distributors. Its Multi-User Solutions subsidiary is a leading third party provider of service and support specializing in Linux(R) SCO(R) UNIX(R), Windows(R) NT, and other Open Systems.

This press release contains certain forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. With the exception of historical information contained herein, the matters discussed in this press release involve risk and uncertainties. Actual results could differ materially from those expressed in any forward-looking statement.

                         Computone Corporation
                            Financial Data
               (in thousands, except for per share data)


                        Three Months Ended           Year Ended
                       March 31,    April 2,    March 31,    April 2,
                         2000        1999         2000         1999
                       ---------   ---------    ---------   ---------
                            (unaudited)

INCOME STATEMENT DATA
Net Sales              $   1,441   $   2,607    $  11,198   $  10,181
Gross Profits                249         760        4,128       3,241
Operating Expenses
   Product development       423         472        1,749       1,947
   Selling, general
    and administrative       711       1,013        3,434       4,648
Operating income (loss)     (885)       (725)      (1,055)     (3,354)
Other income (expense)       (52)       (613)        (196)       (732)
Net income (loss)
 before income taxes        (937)     (1,338)      (1,251)     (4,086)
Net income (loss)      $    (937)  $  (1,338)   $  (1,251)  $  (4,086)

Weighted average shares
   Basic                   9,749       8,140        8,787       7,798
   Diluted                 9,749       8,140        8,787       7,798

Loss per common share
   Basic               $   (0.10)  $   (0.16)   $   (0.14)  $   (0.52)
   Diluted             $   (0.10)  $   (0.16)   $   (0.14)  $   (0.52)


                       March 31,    April 2,
                         2000        1999
                       ---------   ---------

BALANCE SHEET DATA
Cash and cash
 equivalents           $     197   $      18
Receivables, net           1,389       1,913
Inventories, net           2,421       2,197
Total assets           $   5,196   $   5,258

Accounts payable       $   1,042   $   2,143
Long-term debt               193         347
Total liabilities          4,140       5,152
Stockholders' equity       1,056         106

Working capital
 (deficit)                   155        (614)