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DATA SWITCH POSTS SMALL FOURTH-QUARTER PROFIT

 SHELTON, Conn., Jan. 28 /PRNewswire/ -- Data Switch Corporation (NASDAQ: DASW) said today that it had made a profit in the fourth quarter and had entered 1993 with an exceptionally large backlog.
 The company posted fourth-quarter net income of $233,000, or $.02 per share, versus $897,000, or $.08 per share, for the same period last year. The company had previously reported that, because of the timing of product shipments, it expected a revenue shortfall, bringing sales slightly below $20 million. Actual fourth-quarter revenues were $18,633,000, down from $29,259,000 last year.
 For the year, Data Switch posted a net loss of $1,013,000, or $.08 per share, on revenues of $84,020,000. Last year, Data Switch lost $32,423,000, or $2.73 per share -- which included a non-recurring charge of $32,996,000 -- on sales of $103,000,000.
 Data Switch President and Chief Executive Office J. Roger Moody commented: "We are disappointed by our fourth-quarter revenue shortfall, but we believe that we can rebuild revenue levels during the year because of our exceptional backlog going into 1993 and our new products. Backlog was approximately $12 million -- and that doesn't include $9.7 million expected to be shipped for our recent multi-year contracts from Harris Corporation and the Federal Reserve. This compares to our backlog of $4.4 million entering 1992.
 "In addition," Mr. Moody added, "we increased our investment in product development in 1992, and this has paid off in five new products. These products -- including our wide-area networking system and several new fiber data center products -- are shipping this quarter and are generating enthusiastic customer response.
 "In spite of the fourth-quarter revenue shortfall, we were able to make a small profit because of continued expense controls and improvements in manufacturing operations. Gross profit margins for both products and service were up from the previous quarter because of operating efficiencies. Good working capital management resulted in cash flow of $3.9 million for the quarter and $13.2 million for the year, enabling the company to continue to reduce debt."
 Mr. Moody said that overall 1992 sales were affected by sluggishness of the European economy, weakness in the airline industry, transitions in the mainframe computer market, and the proposed 1993 investment tax credit. "Our biggest challenge in 1993 is to grow revenue levels, and we're well positioned to do that. In addition, since we've lowered our break-even point, any revenues that result from our new products will have an increasingly positive impact on the bottom line."
 DATA SWITCH CORPORATION
 Summary of Operations
 (Thousands except per share data)
 Periods ended Three Months Year
 Dec. 31 1992 1991 1992 1991
 Revenues $18,633 $29,259 $84,020 $103,000
 Cost of goods sold 8,800 15,158 42,682 52,147
 Gross profit 9,833 14,101 41,338 50,853
 Operating expenses 9,128 11,201 39,430 44,560
 Goodwill amortization 43 43 171 34,450
 Other expenses, net 642 809 2,978 3,775
 Pre-tax income (loss) 20 2,048 (1,241) (31,932)
 (Provision for) benefit
 from taxes 213 (1,151) 228 (916)
 Income (loss) before
 extraordinary gain 233 897 (1,013) (32,848)
 Extraordinary gain -- -- -- 425
 Net income (loss) $ 233 $ 897 $(1,013) $(32,423)
 EPS before extraord. gain $0.02 $0.08 $(0.08) $(2.76)
 EPS $0.02 $0.08 $(0.08) $(2.73)
 Average shares outstanding 12,440 11,935 12,139 11,892
 Balance Sheet
 (In thousands)
 12/31/92 12/31/91
 Cash $ 2,208 $ 753
 Receivables 18,603 32,840
 Inventories 20,008 20,182
 Other current assets 1,065 766
 Total current assets 41,884 54,541
 Property and equipment 6,177 6,685
 Goodwill 2,640 2,812
 Other 6,113 4,647
 Total assets 56,814 68,685
 Short-term debt 771 1,396
 Other current liabilities 13,327 12,389
 Total current liabilities 14,098 13,785
 Long-term debt 21,240 32,176
 Shareholders' equity 21,476 22,724
 Total liabilities and
 shareholders' equity $56,814 $68,685
 -0- 1/28/93
 /CONTACT: Linda L. Bachmann, director-corporate communications of Data Switch, 203-926-1801/
 (DASW)


CO: Data Switch Corporation ST: Connecticut IN: SU: ERN

GK-OS -- NY065 -- 0310 01/28/93 13:30 EST
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Date:Jan 28, 1993
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