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PAIRGAIN REPORTS THIRD QUARTER 1993 RESULTS

 CERRITOS, Calif., Oct. 20 /PRNewswire/ -- PairGain Technologies (NASDAQ: PAIR) today reported financial results for the third quarter 1993.
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 ($ in millions, except per share amounts)
 (unaudited)
 Revenue $9.8 $2.3 $25.2 $4.3
 Net income $2.5 ($0.7) $5.2 ($3.2)
 Earnings per share $.20 ($.08) $.44 ($.33)
 Revenue, net income, and earnings per share in the second quarter 1993 were $8.0, $1.4, and $.12, respectively.
 PairGain completed its Initial Public Offering on Sept. 15, 1993, raising $54 million. The company's chief executive officer, Charles S. Strauch, stated that "we are pleased with third quarter results, which we believe reflects PairGain's continued success in penetrating the public telephone market for its HiGain High-bit rate Digital Subscriber Line (HDSL) product line."
 Strauch emphasized that the third quarter results -- particularly its operating margins, should not be taken as an indicator of the company's future results. "Although we continue to be successful in gaining TELCO customer approvals for our HiGain product line, price reductions of up to 40 percent for our largest customers have been implemented to both meet competition and expand our HiGain installed base. It is too early to assess the net effect of these reductions on our future revenue."
 Strauch indicated that another of the Regional Bell Operating Companies had recently signed a long-term contract to purchase both the HiGain HDSL and PG-2 digital two-line subscriber systems. Currently, all seven Regional Bell Operating Companies and several independent telephone companies are deploying or testing HDSL systems which use PairGain's technology, either sold directly by PairGain or through its licensees Alcatel and ADC Telecommunications. Market introduction of the Campus T1/E1, which has application in private networks, is proceeding on schedule both in North America and selected international markets. This product line was introduced in late June 1993.
 PairGain designs, manufactures, and markets systems which allow telecommunication carriers and private networks to more efficiently and quickly deploy high-speed digital service to end users over the large existing infrastructure of unconditioned copper wires. The company is a leading provider of telecommunications systems based on High-bit-rate Digital Subscriber Line (HDSL) technology. PairGain's HiGain and Campus systems provide fiber quality transmission over the last mile on copper in both the public and private telephone networks.
 PAIRGAIN TECHNOLOGIES INC.
 Statement of Operations
 (In thousands, except per share data)
 (Unaudited)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Revenues:
 Product sales $9,303 $2,292 $23,076 $4,265
 Technology fees &
 royalty income 454 30 2,094 30
 Total revenue 9,757 2,322 25,170 4,295
 Cost of sales 4,065 1,628 11,641 3,907
 Gross profit 5,692 694 13,529 388
 Operating expenses:
 Research & development 969 613 2,700 1,526
 Selling & marketing 991 412 2,560 1,005
 General & administrative 618 391 1,952 1,018
 Total operating expense 2,578 1,416 7,212 3,549
 Operating income (loss) 3,114 (722) 6,317 (3,161)
 Interest income
 (expense), net (60) (15) (204) (17)
 Income (loss) before
 income taxes 3,054 (737) 6,113 (3,178)
 Provision for income taxes 571 --- 907 ---
 Net income (loss) $2,483 ($737) $5,206 ($3,178)
 Net income (loss)
 per share $.20 ($.08) $.44 ($.33)
 Weighted average number
 of shares 12,382 9,778 11,920 9,640
 -0- 10/20/93
 /CONTACT: Scott O. Davis, CFO, 310-404-8811/
 (PAIR)


CO: PairGain Technologies ST: California IN: TLS SU: ERN

LM-MF -- LA049 -- 4870 10/20/93 20:00 EDT
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Publication:PR Newswire
Date:Oct 20, 1993
Words:599
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