Computone Reports Strong Sales for Q3, First 9 Months of Fiscal 2000; 88% Improvement for First Nine Months Reported by Pioneer in Connectivity Products and Remote Access Communications.

Business/High Tech Writers

ALPHARETTA, Ga.--(BUSINESS WIRE)--Feb. 10, 2000

Computone Corporation (OTC BB: CMPT), a pioneer and leader in connectivity products and remote access communications, today announced financial results for its third quarter ended December 31, 1999, which showed &uot;growth in sales and gross profits while trimming net losses&uot; according to Perry Pickerign, its president and CEO.

Computone reported net sales for the third quarter of $2,378,000, a 24 percent increase from $1,922,000 for the same period of fiscal 1999. It also said sales for the nine months ended December 31, 1999 were $9,757,000, up nearly 29 percent over the $7,574,000 for the same period in fiscal 1999.

Gross profits were also up, in the third quarter, the company said, reporting $927,000 for the quarter, an increase of 30 percent over $710,000 for the third quarter of fiscal 1999, and $3,879,000 for the nine months ended December 31, 1999 up 56 percent over $2,482,000 for the same period in fiscal 1999. Gross margins in fiscal 2000 improved 2 percent and 7 percent in the three-month and nine-month periods, respectively.

The company reported a net loss of $392,000 for the third quarter ended December 31, 1999, a 59 percent reduction from a net loss of $977,000 for the same period in fiscal 1999. For the nine months ended December 31, 1999, Computone said its net loss was $314,000, a $2,433,000 or 88 percent reduction from the net loss of $2,747,000 for the same period in fiscal 1999. Selling, general and administrative expenses decreased approximately 25 percent in both the three-month and nine-month periods in fiscal 2000.

Pickerign said he was &uot;pleased by the progress being made. Computone has substantially improved efficiency, increased sales and reduced losses this fiscal year,&uot; he said, &uot;and our research and development group has released many new products that enhance performance and reduce manufacturing costs&uot;. Pickerign also said that Computone will continue to focus on providing superior solutions for Linux(R), Windows(R) NT, SCO(R) UNIX(R) and other Open Source providers.

Looking to the final quarter of fiscal 2000 and the first quarter of fiscal 2001, Pickerign said that Computone &uot;anticipates finalizing and announcing agreements with, and sales to, several key industry players. These agreements and sales,&uot; he said, &uot;should facilitate and fuel additional long-term growth.&uot;

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.

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)
                              (unaudited)


                                Three Months          Nine Months
                                   Ended                Ended
                             Dec. 31,   Jan. 1,   Dec. 31,   Jan. 1,
                               1999      1999      1999        1999



INCOME STATEMENT DATA

Net Sales                    $ 2,378   $ 1,922   $ 9,757    $ 7,574

Gross Profits                    927       710     3,879      2,482

Operating Expenses

  Product development            437       518     1,326      1,475

  Selling, general
   and administrative            836     1,109     2,723      3,635

Operating income (loss)         (346)     (917)     (170)    (2,628)

Other income (expenses)          (46)      (60)     (144)      (119)

Net income (loss) before
 income taxes                   (392)     (977)     (314)    (2,747)

Net income (loss)               (392)     (977)     (314)    (2,747)


Weighted average
 shares

  Basic                        8,702     7,734     8,572      7,599

  Diluted                      8,702     7,734     8,572      7,599



Loss per common share

  Basic                      $ (0.05)  $ (0.13)  $ (0.04)   $ (0.36)

  Diluted                    $ (0.05)  $ (0.13)  $ (0.04)   $ (0.36)


                             Dec. 31,   April 2,
                              1999        1999

BALANCE SHEET DATA

Cash and cash equivalents    $    80   $    18

Receivables, net               1,671     1,963

Inventories, net               2,105     2,197

Total assets                   4,949     5,308



Accounts payable                 843     2,143

Long-term debt                   233       347

Total liabilities              3,786     5,202

Stockholders' equity           1,163       106


Working capital (deficit)        352      (614)