Microlog Announces Third Quarter Results.

Business Editors/Hi-Tech Writers

GERMANTOWN, Md.--(BUSINESS WIRE)--Aug. 31, 2000

Microlog Corporation (NASDAQ:MLOG) announced today results for the quarter ended July 31, 2000, indicating revenues for the quarter of $3.1 million and a net loss of $504,000 (($0.07) per basic and diluted share).

For the nine months ended July 31, 2000, revenues were $11.6 million, with a net loss of $321,000 (($0.05) per basic and diluted share).

"Although we signed a significant agreement near the end of the quarter, over $500,000 of income from the agreement could not be recognized during the quarter. Instead, we expect that the income will be realized over our next two quarters," stated John Mears, Co-President and COO.

Mr. Mears added, "We placed increased emphasis on sales and marketing this quarter, and are pleased to announce the addition of two direct sales professionals experienced in our industry. In addition, we are beginning to see some early results from our pursuit of alternate channel sales, as illustrated by our recently announced uniQue licensing agreement."

To compare the most recent quarter and nine-month period to the comparable periods last year, the Company had revenues of $5.0 million and a net loss of $187,000 (($0.04) per basic and diluted share) for the quarter ended July 31, 1999, and revenues of $14.1 million and a net loss of $3.6 million (($0.82) per basic and diluted share) for the nine months ended July 31, 1999.

Microlog Corporation designs software applications that enhance the productivity of the customer contact center experience, as well as provides consultation on a variety of hardware options. The Company's professional services encompass the migration of e-commerce into the traditional call center environment by Web enablement. Microlog's award winning products support this Web enablement, as well as supports all inbound and outbound media - telephone, e-mail, fax, and Web - for contact centers. Other services offered by Microlog include: technology assessment; project management; application and software development; system integration; telephony integration; installation; system administration and quality assurance. For additional Microlog information, call [phone] or visit Microlog's Web site at www.mlog.com.

Statements in this news release concerning future results, performance, or expectations are forward-looking statements. Actual results, performance, or developments could differ materially from those expressed or implied by such forward-looking statements as a result of known and unknown risks, uncertainties, the Company's ability to introduce new call center products on a timely manner, and the demand for such products, technological innovation and competition, and other factors including those described from time to time in the Company's other filings with the Securities and Exchange Commission, press releases, and other communications.

                    Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

                        Microlog Corporation
                      Consolidated Balance Sheets
                   (In thousands, except share data)

                                       (Unaudited)
                                         July 31,    October 31,
                                           2000         1999
                                        --------     --------
Assets:
Current assets:
    Cash and cash equivalents           $  1,842     $  3,425
    Receivables, net                       1,898        1,155
    Inventories, net                         336          375
    Other current assets                     231          301
                                        --------     --------
    Total current assets                   4,307        5,256
Fixed assets, net                            778          917
Licenses, net                                 16          100
Other assets                                 181          153
                                        --------     --------
     Total assets                       $  5,282     $  6,426
                                        ========     ========

Liabilities and Stockholders' Equity:

Current liabilities:
    Current portion
     of long-term debt                  $      0     $     74
    Accounts payable                         354          388
    Accrued compensation
     and related expenses                  1,316        1,965
    Deferred revenue
     and other
     deferred credits                        485          447
    Other accrued
     expenses                                238          564
                                        --------     --------
     Total current
      liabilities                          2,393        3,438
Deferred officers'
  compensation                               136          151
Other liabilities                            114           33
                                        --------     --------
     Total
      liabilities                          2,643        3,622
                                        --------     --------
Stockholders' equity:
  Serial preferred
   stock, $.01 par value,
   1,000,000 shares
   authorized, no shares
   issued and outstanding                   --           --
  Common stock,
   $.01 par value,
   10,000,000 shares
   authorized,
   7,666,808 and 7,575,597
   shares issued and
   7,064,938 and 6,973,727
   outstanding                                77           76

    Capital in excess
     of par value                         20,672       20,517

    Treasury stock,
     at cost, 601,870
     shares                               (1,177)      (1,177)

    Accumulated deficit                  (16,933)     (16,612)
                                        ---------    ---------
    Total stockholders'
     equity                                2,639        2,804
                                        ---------    ---------
    Total liabilities
     and stockholders'
     equity                             $  5,282     $  6,426
                                        ========     ========


                         Microlog Corporation
                 Consolidated Statements of Operations
                              (Unaudited)
                            (In thousands)


                         For The Three Months    For The Nine Months
                             Ended July 31,          Ended July 31,
                            2000        1999        2000        1999
                         ---------   ---------   ---------   ---------

Sales                    $  3,071    $  4,954    $ 11,624    $ 14,097

Costs and expenses:
    Cost of sales           2,321       3,400       8,178      10,326
    Selling, general
     and administrative       923       1,160       2,823       4,580
    Research and
     development              342         600       1,004       2,299
    Restructuring costs       ---           5         ---         586
                         ---------   ---------   ---------   ---------

                            3,586       5,165      12,005      17,791
                         ---------   ---------   ---------   ---------

Operating loss               (515)       (211)       (381)     (3,694)

Net other income               11           5           4         119
                         ---------   ---------   ---------   ---------

Loss before income
 taxes                       (504)       (206)       (377)     (3,575)

Benefit for income
 taxes                        ---          19          56         ---
                         ---------   ---------   ---------   ---------

Net loss                     (504)       (187)       (321)     (3,575)

Accumulated deficit:
     at beginning of
      period              (16,429)    (15,307)    (16,612)    (11,919)
                         ---------   ---------   ---------   ---------

     at end of period    $(16,933)   $(15,494)   $(16,933)   $(15,494)
                         =========   =========   =========   =========

Basic weighted average
 shares outstanding         7,065       4,438       7,024       4,339
                         ---------   ---------   ---------   ---------
Diluted weighted
 average shares
 outstanding                7,065       4,438       7,024       4,339
                         ---------   ---------   ---------   ---------

Basic loss per share     $  (0.07)   $  (0.04)   $  (0.05)   $  (0.82)
Diluted loss per share   $  (0.07)   $  (0.04)   $  (0.05)   $  (0.82)