Elcom International reports record earnings and revenues for its third quarter.

NORWOOD, Mass.--(BUSINESS WIRE)--Nov. 12, 1996-- Elcom International, Inc. (NASDAQ: ELCO), a leading electronic commerce company, today announced its third quarter results, reporting record earnings and revenues. The Company also announced it is in discussions with various investment banks regarding a possible public offering of shares of Elcom Systems, Inc., its technology subsidiary which developed and licenses the Company's electronic commerce software system. There can be no assurance however, that any agreement with any investment bank will be forthcoming.

Quarterly Highlights:

Net Sales totaled $156.9 million, up from $97.9 million in the third quarter of 1995, a 60% growth rate, with net income of $1,310,000 or $.04 per share vs. a net loss of $(83,000) or nil per share in the third quarter of 1995.

                       Financial Summary Table
                             (Unaudited)
              (in thousands, except per share amounts)

                          Quarter Ended         Nine Months Ended
                           September 30,          September 30,
                          1996       1995        1996      1995

Net Sales              $156,85    $97,898    $444,572  $203,263
Gross Profit           $17,332    $12,353     $50,717   $26,111
Gross Profit Percentage   11.0%      12.6%       11.4%     12.8%
Operating Profit        $2,736     $1,043      $7,490      $630
Net Income (Loss)       $1,310       $(83)     $3,586   $(1,254)
Net Income (Loss) Per
 Share                    $.04      $(.--)       $.12     $(.07)
Weighted Average Shares 29,435     23,201      29,604    18,817

Additional and more detailed information regarding the Company's financial results and other activities during the quarter is contained in the Company's 10-Q which is expected to be filed with the Securities and Exchange Commission ("SEC") within the next few days when it will become available on EDGAR, the SEC's electronic reporting system.

Net sales for the first nine months of 1996 totaled $444.6 million, up 119% from sales of $203.3 million in the first nine months of 1995. Net income totaled $3,586,000 for the nine months ended September 30, 1996, versus a $(1,254,000) loss in the comparable 1995 period. For the nine months ended September 30, 1996, net income per share amounted to $.12, compared to a $(.07) loss per share in the comparable period of 1995.

Robert J. Crowell, Elcom International's Chairman and CEO stated, "We are pleased with the Company's progress since its initial public offering in December of last year. Our third quarter results underscore the continued acceptance of our PECOS (Personal Electronic Catalog and Ordering System) technology in Catalink Direct, our wholly-owned PC remarketer operating unit which uses our proprietary PECOS technology to market and sell PC products. Our U.K. Group is also expanding as they begin to utilize our PECOS technology with their existing and new customers."

In addition, Mr. Crowell stated that "Elcom Systems, our wholly-owned technology subsidiary which developed and licenses its PECOS electronic commerce enabling software technology to other companies, continues to expand its revenues and is in discussions with several investment banks regarding a possible initial public offering of its common stock." Any offering would only be made pursuant to a prospectus included in a registration statement which would be filed with the Securities and Exchange Commission. There can be no assurances as to the likelihood, the success, the valuation, the timing or the size of any such possible equity offering.

In order to support one large corporate customer, the Company has begun purchasing directly from Compaq Computer Corporation for that particular customer. The Company believes there may be a (net) financial benefit, given its current purchasing levels, to purchasing other selected major manufacturers' products directly and therefore expects its average inventories, at any particular time, to increase. In addition, the Company is continuously in a variety of discussions with prospective acquisition candidates and will pursue possible acquisitions; however, there can be no assurances the Company will complete any additional acquisitions.

The Company develops and licenses proprietary client/server transaction-based software systems which enable the conduct of PC-based interactive electronic commerce on private and/or Internet Protocol networks and, through its Catalink Direct subsidiary, uses its PECOS technology to market PC products electronically. Catalink Direct operates 17 field sales and support offices in the United States and five offices in the United Kingdom. The Company's proprietary PECOS technology is licensed by Elcom Systems, Inc., its wholly-owned technology subsidiary, to companies in various industries which allows them to create interactive electronic catalog and ordering systems which facilitate the conduct of electronic commerce with their customers.

The reported results for all periods include the Company's acquisition of AMA (U.K.) Limited which was completed on February 29, 1996, and is being accounted for as a pooling of interests. Results for the 1995 and 1996 periods also reflect the operations of Computerware in the United States for the months following its February, 1995 acquisition and LANTEC Information Services Ltd., a PC remarketer in the United Kingdom which was acquired in late June, 1995. Exclusive of AMA (U.K.) Limited and these other acquisitions, the Company's net sales for the third quarter of 1996 amounted to over $75 million, a 117% increase over the $35 million recorded in the comparable quarter last year, reflecting the success of the Company's enlarged sales force and the acceptance of Elcom International's proprietary PECOS technology, which forms the backbone of the Company's electronic commerce capabilities.

Statement Under the Private Securities Litigation Reform Act

With the exception of the historical information contained in this release, the matters described herein contain forward-looking statements that involve risk and uncertainties that may individually or mutually impact the matters herein described, including but not limited to product acceptance, economic, competitive, governmental, results of litigation, technological and/or other factors, which are outside the control of the Company.

CONTACT: Elcom International

Eric Poley, 617/440-3333 x4156

Internet: [e-mail]

Homepage: www.elcom.com