Navarre Announces Record Fiscal Fourth Quarter and Year End Sales Results; Fourth Quarter Sales Increased 120%.

Business Editors/High-Tech Writers

MINNEAPOLIS--(BUSINESS WIRE)--April 12, 2000

Navarre Corporation (NASDAQ: NAVR) a leading distributor of PC software, music and DVD, today announced preliminary, unaudited net sales results for the fiscal fourth quarter and year ended March 31, 2000. The company expects to report audited results on or before mid-June, 2000. Accordingly, the following unaudited results are subject to adjustment.

Net sales for the fourth quarter ended March 31, 2000, increased a record 120% to $60.9 million from $27.7 million for the same period last year. Net sales for the fiscal year ended March 31, 2000, increased 36% to $285.2 million from $210.4 million in the prior fiscal year.

Eric Paulson, Chairman, CEO Navarre, stated, "I am extremely pleased with the continued momentum in all operating areas of the company. The Computer Products Division fourth quarter net sales increased 64% from $26.6 million to $43.7 million. For the year, the division's net sales increased 24% from $150.4 million in fiscal 1999 to $186.5 million for fiscal 2000. These sales increases are attributable to our ever-increasing customer base and our increased market share in both the entertainment and education categories. Even more encouraging was the report from PC Data that during the year we achieved a 33% market share in the distribution of Linux software and related products.

"Net sales in our Music Division for the fourth quarter ended March 31, increased from $1.1 million in fiscal 1999 to $17.2 million in fiscal 2000. For the year net sales increased 65% from $60.0 million for the fiscal year 1999 to $98.7 million for fiscal year 2000. The sales in this division were aided by strong releases from Kenny Rogers, The Irish Tenors, American Gramaphone's Mannheim Steamroller, Brent Jones, Lee Williams and Spiritual QC's, and The Flying Nutrinos, and many others, all of which achieved Billboard chart status throughout the year. The results also reflect strong growth in DVD sales and the continued success of our vendor managed inventory programs with a number of our major retail accounts." Paulson also stated that the company's balance sheet currently reflects no debt and a cash balance of over $15 million.

The company expects to report an operating profit for the fourth quarter ended March 31, 2000, before inclusion of the non-cash effect of the results from its minority ownership of NetRadio Corporation.

The company stated that its negotiations for the purchase of Simitar Entertainment, Inc, as reported in Billboard Magazine, have been terminated because of the parties' failure to agree on an appropriate valuation.

For more information about Navarre Corporation please visit www.navarre.com.

Navarre Corporation, a Russell 2000 Index and Russell 3000 Index stock, operates a "business to business" Internet E-Commerce web site www.navarre.com and provides fulfillment for retail sites through traditional, e-Commerce and digital technologies. Navarre's major business groups are: Computer Products Division, which distributes quality consumer software to retailers nationwide; Independent Music Distribution, which distributes independent music labels in the United States and now Canada; Alternative Retail Markets, which distributes major label music to non-traditional retail outlets and also distributes DVD Home Video product; Digital Entertainment, Inc., which digitally distributes music, software and movies over the Internet. Navarre has an ownership position in NetRadio Corporation featuring originally programmed audio content at http://www.netradio.com and its online store CDPoint.

Digital Entertainment, a wholly owned subsidiary of Navarre Corporation, aggregates and distributes digital content including music and software utilizing industry-leading solutions for encoding, encryption, digital rights management and playback. With access to a large catalog of music and software content in digital form, Digital Entertainment has the ability to offer secure download solutions to the broadest possible base of e-commerce customers. With worldwide digital distribution rights, Digital Entertainment is now able to provide global solutions to customers with a multi-national presence.

The statements in this press release that are not strictly historical are "forward looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are intended to be covered by the safe harbors created by these sections. The forward looking statements are subject to risks and uncertainties and the actual results that the Company achieves may differ materially from these forward-looking statements due to such risks and uncertainties, including developments in the retail and consumer markets for prerecorded music products and computer software products, retail consumer buying patterns, new and different competition in the Company's traditional and new markets, the Company's dependence upon seasonality in its business, the Company's ability to attract and retain large retail customers that account for a significant part of its business, the Company's ability to successfully act as distributor to on-line retailers, the Company's ability to manage its inventory, the Company's dependence upon recording labels and artists, the Company's ability to react to changes in the distribution of software and prerecorded music and the Company's ability to successfully defend itself against litigation. A detailed statement of risks and uncertainties related to the Company is included in the section "Business- Forward Looking Statements" in the Company's Form 10-K for the year ended March 31, 1999 as well as the Company's disclosure in Forms 10-Q or Forms 8-K or Prospectuses filed with the SEC subsequent to that date. The Company undertakes no obligation to revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.