Correcting and replacing Comdial Corp. earnings release, BW1009, Comdial Corp. reports 34 percent profit increase for 1994.

CHARLOTTESVILLE, Va.--(BUSINESS WIRE)--Feb. 21, 1995--Comdial Corp. (NASDAQ:CMDL) Tuesday announced that it reported 1994 sales of $77.1 million, an increase of 12 percent over sales of $69.1 million in 1993.

Net income rose faster than sales, climbing 34 percent to $3.2 million versus $2.4 million in 1993. After dividends of $577,000 on preferred stock, 1994 net income applicable to common shares was $2.6 million or 12 cents per share, compared to $2.4 million or 12 cents per share in 1993. The preferred shares were issued on Feb. 1, 1994; consequently there were no preferred dividends in 1993.

President and CEO William G. Mustain said, "Our 1994 net income was the best ever for Comdial. The rising sales and improving profitability were largely due to the strong acceptance of our new IMPACT digital telephone systems and continuing popularity of our DXP digital switch. DXP sales doubled versus last year, and we expect similar sales growth in 1995."

The company reported sales for the fourth quarter ended Dec. 31, 1994, of $19.8 million, net income of $812,000, and net income applicable to common shares (after preferred dividends of $148,000) of $664,000 or 3 cents per share. For the comparable quarter in 1993, Comdial reported sales of $21.5 million, net income of $1.7 million (no preferred dividends) and earnings of 8 cents per share.

Mustain added, "Fourth-quarter sales were down from the exceptionally high level of last year's fourth quarter, as anticipated. Last year's fourth quarter was unusually high, as manufacturing worked off an order backlog resulting from the highly successful introduction of our IMPACT business telephones in the beginning of the year. IMPACT continues to sell well and we expect further sales growth during 1995."

Mustain noted that Comdial has made considerable progress in the promising field of Computer Telephony Integration (CTI) systems solutions. "We have delivered products when we said we would, and received orders for over $1.3 million for our Enhanced 911 systems for delivery in 1995. We have also strengthened our strategic relationship with Novell Inc.; we recently announced an OEM agreement for us to market Novell's Netware Telephony Service in conjunction with our Enterprise for Telephony Services software link. These developments should have a positive effect on our 1995 CTI sales."

He said, "Equally important, these CTI developments reflect a strong tide in our industry that has prompted Dataquest, among others, to project that CTI industry sales will rise to more than $2 billion by the end of the decade."

Mustain also pointed out that the company's strategy for growth in international sales is increasingly successful. He said, "Our international sales approximated $3 million, up from approximately $400,000 two years ago. In addition we signed a letter of intent to form a limited partnership in Saudi Arabia to manufacture telecommunications products. As this venture proceeds, it will complement our solid customer bases in South Africa and Latin America, and lead to a faster-growing international sales base."

The company's balance sheet strengthened during the year with total assets amounting to $42.3 million, a current ratio of 1.8:1, working capital of $11.6 million and shareholders' equity of $21.0 million.

Comdial is a leading designer, manufacturer and supplier of a broad range of advance telecommunications products and systems solutions based on computer telephone integration. -0-

                            Comdial Corp.
                       Selected Financial Data
              (In Thousands, Except Per Share Amounts)

                                          Fourth Quarter Ended
                                               December 31,
                                           1994           1993

Net Sales                                $19,827        $21,462 (a)
Gross Profit                               6,273          7,442
Net Income                                   812          1,651
Preferred Dividends                          148             --
Net Income Applicable to Common Shares       664          1,651

Earnings Per Share:  Primary             3 cents        8 cents

Weighted Average Shares:  Primary         21,673         21,739

                                               Year Ended
                                               December 31,
                                          1994            1993

Net Sales                                $77,145        $69,099 (a)
Gross Profit                              24,406         21,313
Income Before Extraordinary Items          3,614          2,416
Net Income                                 3,225          2,416
Preferred Dividends                          577             --
Net Income Applicable to Common Shares     2,648          2,416

Earnings Per Share:  Primary            12 cents       12 cents

Weighted Average Shares:  Primary         21,706         20,835

(a) 1993 restated to current reporting basis.

CONTACT: South Coast Communications Group, Irvine, Calif.

Marty Tullio (investors) or Owen Daley (media),

714/252-8440