TII Industries announces third quarter results sales increase 11% for three month period.

COPIAGUE, N.Y.--(BUSINESS WIRE)--May 5, 1997--TII Industries, Inc. (Nasdaq NMS:TIII) reported that sales for the third quarter, ended March 28, 1997, increased by 11% to $12.5 million from $11.3 million reported during the same quarter last year.

Sales for the first nine months of fiscal 1997 increased 17% to $37.5 million from $32.1 million reported during the first nine months of fiscal 1996. (Fiscal year 1996 three month and nine month sales were adjusted to eliminate a payment of $875,000 received from AT&T during the third quarter of that year which is no longer recurring.)

Third quarter and nine month results reflect $3,000,000 ($.38 per share) of restructuring and other charges previously announced by the company. Principally as a result of these charges, the company reported a loss of $2,325,000 and $668,000 for the third quarter and first nine months of fiscal 1997, respectively, compared to net income of $1,781,000, and $3,115,000 during the same periods of fiscal 1996.

Timothy J. Roach, president and CEO, commented, "We believe that the actions we are taking to streamline our operations, eliminate marginal products and reduce expenses will further improve future profitability. We are confident that TII will return to profitability during the during the fourth quarter and, that sales for the fiscal year ending June 27 will exceed $50 million.

"We also continue to remain confident in the future growth and profitability of our company due, in part, to the excellent prospects for a number of recently developed products. Several of our new products, including our patented coaxial protector, a new network interface line and several fiber optic products, are presently under evaluation by large potential users."

Roach continued, "We remain particularly optimistic about the prospects for the environmentally sealed overvoltage protectors now being jointly manufactured and marketed with Raychem. These state-of-the-art products, which incorporated TII's overvoltage protection and Raychem's proprietary Gelguard(R) sealing technology, are designed to reduce or eliminate two of the most costly maintenance items that affect the telephone companies' outside plant network -- damage caused by lightning and other hazardous overvoltages and damage caused by moisture and other contaminants.

"By reducing or eliminating system downtime from these causes, telephone companies can significantly improve quality of service while saving considerable maintenance expenses."

TII's arrangement with Raychem resulted from the previously announced discontinuance of future operations by Access Network Technologies (ANT, a joint venture between Lucent Technologies Inc. and Raychem Corp.). As a result, Raychem has assumed all of ANT's rights to this product line. TII and Raychem intend to continue to cooperatively manufacture and market these products in the future, as well as evaluate new product opportunities which incorporate each parties' advanced technologies.

During March, TII launched its home page on the Internet. Located at http://www.tii-industries.com, the company's home page has been a success from its very beginning. Within the first month on the web, TII's home page has logged over 1,000 hits. TII finds this site an efficient and immediate way to communicate with its customers and the global investing community. The company hopes that customers, analysts and shareholders alike will find www.tii-industries.com a valuable and useful tool for gathering information on TII.

TII Industries Inc., with facilities in Copiague, New York, North Carolina, Puerto Rico and the Dominican Republic, specializes in the design, manufacture and sale of overvoltage surge protection, fiber optic, network interface and electronic products, principally for use in the telecommunications industry. TII markets its products directly or indirectly to the Regional Bell and independent telephone operating companies and CATV providers, as well as original equipment suppliers who sell to the global communications marketplace. Its overvoltage protectors are required by the National Electric Code to be installed on the user's home or office telephone lines to prevent injury or damage caused by lightning and other electrical occurrences. Its customers service over 165 million subscriber lines in the United States.

Statements in this release that are not strictly historical are "forward-looking" statements which should be considered as subject to the many risks and uncertainties that exist in the company's operations and business environment. These risks and uncertainties include economic conditions, market demand and pricing, competitive and cost factors as well as other factors from time to time discussed in TII's Securities and Exchange Commissions reports filed by the company. -0-

                    TII Industries, Inc. and Subsidiaries
                 Consolidated Statements of Operations (unaudited)
                   (Dollars in Thousands, except per share data)

                             Three Months Ended  Nine Months Ended
                                  March              March
                            28, 1997  29, 1996   28, 1997   29, 1996

Net sales                   $12,535    $12,136    $37,532    $32,977
Cost of sales                12,178(a)   7,946    $30,638(a) $23,110

    Gross profit                357(a)   4,190      6,894(a)   9,867

Operating expenses
 Selling, general and
  administrative              1,906(b)   1,568      5,261(b)   4,455
 Research and development       842(b)     770      2,362(b)   2,157
  Total operating expenses    2,748(b)   2,338      7,623(b)   6,612

  Operating (loss) income    (2,391)(c)  1,852       (729)(c)  3,255

Interest expense                (60)      (112)      (229)      (293)
Interest income                  54         53        324        152
Other income (expense)           41        (12)        41          1

 Income (loss) before
  provision for income taxes (2,356)(c)  1,781       (593)(c)  3,115
Provision (credit) for
  income taxes                  (31)       --          75         --
  Net income (loss)         $(2,325)(c) $1,781     $ (668)(c) $3,115
Net income (loss) per share
    - primary                 $(.31)(c)   $.23      $(.09)(c)   $.40
Weighted average number of
 common and common equivalent
  shares outstanding          7,431      7,893      7,430      7,861

Net income (loss)    --
 per share fully diluted      $(.31)(c)   $.22      $(.09)(c)   $.39

Weighted average number of
 common and common equivalent
 shares outstanding           7,431      8,193      7,430      8,197


(a) Includes $2.9 million of write-offs, primarily to establish
    inventory reserves.

(b) Includes $.5 million of general and administrative cost for
    severance and other; restructuring implementation cost and $.5
    million of research and development restructuring costs.

(c) Reflects the $3.0 million ($.38 per share) of non-recurring
    charges for inventory reserves, severance and other restructuring
    costs.

-0-

            TII Industries, Inc. and Subsidiaries
      Consolidated Statements of Operations (unaudited)
        (Dollars in Thousands, except per share data)

                                    Three Months Ended
                              March     March      March      March
                            28, 1997   28, 1997   28, 1997   29, 1996
                             Before  Restructuring   As
                            Charges     Charges   Reported

Net sales                   $12,535   $   --      $12,535    $12,136
Cost of sales                 9,278      2,900     12,178      7,946

    Gross profit              3,257     (2,900)       357      4,190

Operating expenses
 Selling, general and
  administrative              1,856         50      1,906      1,568
 Research and development       792         50        842        770
  Total operating expenses    2,648        100      2,748      2,338

  Operating income (loss)       609     (3,000)    (2,391)     1,852

Interest expense                (60)        --        (60)      (112)
Interest income                  54         --         54        53
Other income (expense)           41         --         41       (12)

 Income (loss) before provision
  for income taxes              644     (3,000)    (2,356)     1,781
Provision (credit) for
 income taxes                   149       (180)       (31)        --

  Net income (loss)           $ 495     $(2,820)  $(2,325)   $ 1,781
Net income (loss) per share -
 primary                       $.07       $(.38)   $ (.31)      $.23

Weighted average number of
 common and common equivalent
  shares outstanding          7,431                 7,431      7,893

Net income (loss) per share --
 fully diluted                 $.07       $(.38)    $(.31)      $.22

Weighted average number of
 common and common equivalent
 shares outstanding           7,431                 7,431      8,193
-0-


            TII Industries, Inc. and Subsidiaries
      Consolidated Statements of Operations (unaudited)
        (Dollars in Thousands, except per share data)

                                     Nine Months Ended
                              March     March      March      March
                            28, 1997   28, 1997   28, 1997   29, 1996
                             Before  Restructuring   As
                            Charges     Charges   Reported

Net sales                   $37,532   $   --      $37,532    $32,977
Cost of sales                27,738      2,900     30,638     23,110

    Gross profit              9,794     (2,900)     6,894      9,867

Operating expenses
 Selling, general and
  administrative              5,211         50      5,261      4,455
 Research and development     2,312         50      2,362      2,157
  Total operating expenses    7,523        100      7,623      6,612

  Operating income (loss)     2,271     (3,000)      (729)     3,255

Interest expense               (229)        --       (229)      (293)
Interest income                 324         --        324        152
Other income (expense)          41          --         41          1

 Income (loss) before provision
  for income taxes            2,407     (3,000)      (593)     3,115
Provision (credit) for
 income taxes                   255       (180)        75         --

  Net income (loss)         $ 2,152     $(2,820)   $ (668)   $ 3,115
Net income (loss) per share
- primary                      $.29       $(.38)   $ (.09)      $.40

Weighted average number of
 common and common equivalent
  shares outstanding          7,430                 7,430      7,861

Net income (loss) per share --
 fully diluted                 $.29      $(.38)     $(.09)      $.39

Weighted average number of
 common and common equivalent
 shares outstanding           7,430                 7,430      8,197

CONTACT: TII Industries, Inc.

Paul Sebetic/Jack Tarulli, 516/789-5000