Drexler Technology reports fiscal 1996 third-quarter results.

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Jan. 18, 1996--Drexler Technology Corporation (NASDAQ: DRXR) today announced results for its fiscal 1996 third quarter ended December 31, 1995.

For the three months ended December 31, 1995, the company had a net loss of $364,000, or 4 cents per share, compared with net income of $162,000, or 2 cents per share, for last year's third quarter. This year's third-quarter revenues increased to $1,589,000 from $1,235,000 for last year's third quarter, which was profitable owing to the sale of a $1 million card distribution license.

For the nine months ended December 31, 1995, the Company had a net loss of $1,258,000, or 15 cents per share, compared with a net loss of $1,392,000, or 17 cents per share, for last year's first nine months. Revenues for the recent nine months were $3,353,000 compared with $2,588,000 for the year-earlier period. The current nine months included $200,000 in license revenues versus $1 million in license revenues for the year-ago period.

LaserCard product sales increased substantially over the year-ago periods:

-- For the third quarter just ended, the Company shipped 130,800 LaserCard optical memory cards and 267 card read/write devices versus 12,800 cards and 30 reader/writers for last year's third quarter. As a result, product revenues were $1,582,000 this year versus $232,000 last year.

-- For the recent nine months, the Company shipped 263,400 LaserCard optical memory cards and 511 card reader/writers compared with 89,800 cards and 234 read/write devices for the year-earlier period. As a result, product revenues were $3,129,000 this year versus $1,572,000 last year.

During the fiscal 1996 third quarter, Drexler Technology's LaserCard optical card was selected as a patient record card by Columbia/HCA Healthcare Corporation (NYSE:COL), the owner of 339 hospitals and 118 outpatient surgery centers. The cards are for a hospital field trial, in central Florida, of Columbia's "Patient Information Communication System."

Drexler also announced and shipped an order for 50,000 optical cards to be used by citizens of the Philippine Islands as an admission pass and retail purchase log at the Clark Special Economic Zone. Also during the third quarter, an additional 6,600 cards were ordered for the "Honda Card" program, and British Telecom (NYSE:BTY) reordered 1,000 "CliniCards" for its prenatal care system.

For the U.S. Army's "Automated Manifest System," 10,800 more cards were shipped; thus, 20,800 cards have been purchased for that program during the past four months. California-based VISX, Incorporated (NASDAQ:VISX) placed an order for another six-month supply of optical memory cards for use in laser eye surgery systems in 20 countries.

Headquartered in Mountain View, Drexler Technology manufactures LaserCard optical memory cards. Its wholly owned subsidiary, LaserCard Systems Corporation, develops PC-based optical card data systems and related software for consumer, commercial, and government markets. LaserCard is a federally registered trademark of Drexler Technology Corporation. At December 31, 1995, the Company had 8,826,447 shares of common stock outstanding. -0-

             Drexler Technology Corporation and Subsidiaries
          Summary Consolidated Statements of Operations (Unaudited)
                  (In Thousands, Except Per Share Data)

                                 Three Months Ended   Nine Months Ended
                                 12/31/95  12/31/94   12/31/95  12/31/94
Revenues:
     Product sales                $ 1,582     $  232    $3,129    $1,572
     License fees and royalties         7      1,003       224     1,016
        Total revenues            $ 1,589     $1,235    $3,353    $2,588
Cost of product sales               1,111        178     2,200     1,074
Expenses                              866        902     2,659     2,954
Other income, net                      24          7       248        26
Income (loss) from continuing
     operations                     (364)        162   (1,258)   (1,414)
Income from discontinued
     operations                       --          --       --         22
        Net income (loss)         $ (364)       $162  $(1,258)  $ (1,392)
Income (loss) per share:
     Continuing operations        $ (.04)       $.02  $  (.15)  $   (.17)
     Discontinued operations          --          --       --       --
Net income (loss)                 $ (.04)       $.02  $  (.15)  $   (.17)
Weighted average common and
     common equivalent shares      8,809       8,176     8,646     8,115

CONTACT: Drexler Technology Corp.

Steve Larson, 415/969-7277 ext.7