First Pacific Networks makes appointments, realigns and restructures organization to accommodate widening corporate alliance distribution channel.

SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 13, 1995--First Pacific Networks Inc. (NASDAQ:FPNX)("FPN") announced today that it is realigning its technical and management resources and restructuring its sales and marketing organization to accommodate the transition of the company's operations to a production-scale manufacturing, installation and field service configuration for systems sold and distributed through the company's growing network of corporate partners operating in both domestic and international markets. The realignment and restructuring will result in a reduction of expenses thus better conserving the company's financial resources.

As part of the realignment of management resources, Rajiv Jaluria, chief operating officer of FPN, has been named to the additional post of president of FPN International (FPNI) which has been established to service, support and broaden the company's base of international corporate alliances implementing hybrid fiber-coaxial ("HFC") digital broadband transport systems for telephony and data based on its patented technology.

Craig J. Brunet, FPN's chairman, chief executive officer and president, stated: "The international telephony marketplace has emerged in recent years as a front runner in the installation and implementation of advanced, state-of-the-art telephony systems that look forward to the 21st Century. The significance of these international markets to our company, in every respect, cannot be underestimated."

In connection with the resulting restructuring, the company announced that it will eliminate 21 full-time positions or some 10 percent of its employee base. Over the course of the next several quarters, however, the company anticipates the hiring of additional personnel. Kenneth W. Schneider, executive vice president Finance and Administration and chief financial officer, stated: "It is estimated that terminations, reassignments, reductions through attrition and expiration of no longer required consulting agreements, net of planned new hires in more demanding technical sales support positions, should yield interim expense reductions to the company on the order of $200,000 - $300,000 per month over the next several quarters."

In a related appointment, James R. Hirschy, senior vice president has been named a co-director of the Domestic Transition Planning Group reporting to C.J. Brunet, FPN's chairman, with responsibility for restructuring of the company's domestic sales marketing and service organization to a configuration and skills mix that will support the more demanding distribution requirements of the corporate distribution channel.

Brunet and Jaluria stated: "The realignment and restructuring of resources represents an important step in the evolution of our company to a full commercial-scale business organization, capable of delivery and service in increasing production quantities to a growing, and less regulatory constrained global marketplace. First Pacific has signed channel distribution agreements with, among others, Ericsson, Bosch Telecom and TELE Greenland International and the company is engaged in discussions regarding several domestic as well as international alliance opportunities to complement its current operating and/or field test activity in more than ten countries outside the United States."

Schneider added: "As previously stated, the Company will require additional capital to support its operating activities and to implement its strategic plan. We concluded a $9.4 million equity financing in November. We are working actively with our investment bankers, Smith Barney Inc. and Equitable Securities Corporation, to implement a long-term financing structure that will facilitate funding that plan."

The executives concluded: "The changing regulatory environment in the U.S., coupled with accelerating international trends, points the way towards a convergence of digital communications over new and existing HFC networks. First Pacific Networks' FPN 1000 System is a family of products that incorporates patented, proprietary technology that enables voice, video, and data to be transmitted simultaneously over coaxial and HFC wiring systems to a large number of users on a cost-effective basis. This family of products provides an upward technology migration path for its customers. The company's new organizational configuration will enhance its ability to compete more effectively and cost-efficiently in this rapidly evolving marketplace."

CONTACT: First Pacific Networks Inc., San Jose

             Kenneth W. Schneider, 408/943-7642
                             or
             Kehoe, White, Savage & Co. Inc., New York
             John P. Kehoe or Van Negris, 212/888-1616