DISC Inc. Announces First Quarter Results.

Business Editors

MILPITAS, Calif.--(BUSINESS WIRE)--May 7, 2001

DISC Inc. (Nasdaq: DCSR) today announced financial results for the first quarter ended March 31, 2001.

For the quarter ended March 31, 2001, net sales were $1,562,000 compared to net sales of $1,615,000 reported for the same quarter last year. For the first quarter of 2001, the Company reported a net loss of $(1,267,000), or $(0.33) per share, compared to a net loss of $(831,000), or $(0.22) per share, for the comparable 2000 quarter.

J. Richard Ellis, president and CEO of DISC Inc. stated, "First quarter revenue was essentially at the same level as the first quarter of 2000, despite the current economic environment and some severe product shortages. Technology transitions in both the DVD-RAM and magneto-optical segments of our product offering did not allow us to meet customer demands.

"Availability of the 9.1GB magneto-optical drives from Sony improved in the first quarter, but Sony's supply of media for use in these drives was severely limited. This media shortage impacted our revenue shipments for the quarter and caused some customers to delay their system purchases.

"The DVD-RAM segment of our business was halted due to the delayed release of the 4.7GB DVD-RAM drives. Our suppliers for both the magneto-optical and DVD-RAM products have indicated that these problems will be resolved during the second quarter.

"During the quarter, we began to deliver the first of our Network Attach Storage (NAS) solutions. The initial deliveries of these products have been well received by our customers and are an integral part of our strategy to deliver Nearline Storage Systems to the general-purpose storage market. Our investments in the development of the NAS solutions for our products are making it easier for customers to use our products in heterogeneous network environments."

About DISC: DISC Inc. manufactures a family of automated library solutions for enterprise storage. DISC solutions are developed and produced at its ISO 9001-certified headquarters in Milpitas, Calif. DISC enterprise storage solutions range in capacity from 40GB to 9.5TB. DISC's sales offices are located in Boston, Washington D.C., Dallas, Phoenix, Northern California and London. DISC is traded over the Nasdaq stock exchange - Symbol DCSR.

Customers seeking more information on the Company's products can reach DISC by calling [phone] or [phone], or by accessing DISC's home page on the Internet at: http://www.disc-storage.com

With the exception of the actual reported financial results, statements made in this news release are forward looking statements that involve risks and uncertainties. These forward looking statements include statements relating to improving sales and marketing efforts, expanding sales and marketing efforts in the general-purpose storage marketplace, enhancing our technology, our ability to offer products that serve the general-purpose storage marketplace, our ability to meet customer demands, new business development and obtaining new accounts, growth of the storage market and increasing market share. As discussed in the Company's Annual Report on Form 10-K for the year ending December 31, 2000 and the Quarterly Report on Form 10-Q for the first quarter of fiscal 2001, the Company's future operating results are uncertain and may be impacted by the following risks and uncertainties, among others: market acceptance of our products, our ability to keep pace with technological innovation and competitive developments, our ability to respond to changes in the data storage market, our ability to raise future capital which we anticipate will be required to finance our operations, the loss of key personnel, our history of losses, the loss of customers or distributors and increased competition and pricing pressure.

                               DISC INC.
                        STATEMENT OF OPERATIONS
                              (unaudited)

                                         Three months ended
                                              March 31,
                                     2001                  2000

Net sales                        $ 1,562,000          $ 1,615,000

Cost and expenses:
 Cost of sales                     1,404,000            1,374,000
 Research and development            372,000              280,000
 Marketing and sales                 752,000              493,000
 General and administrative          278,000              272,000

                                   2,806,000            2,419,000

Loss from operations              (1,244,000)            (804,000)
Interest expense                     (23,000)             (27,000)

Net loss                         $(1,267,000)         $  (831,000)

Basic                            $     (0.33)         $     (0.22)

Diluted                          $     (0.33)         $     (0.22)

Shares used in computing net
Loss per share:

Basic                              3,844,000            3,772,000

Diluted                            3,844,000            3,772,000