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Bolt Beranek and Newman Inc. Reports FISCAL 1995 Second Quarter Results.

CAMBRIDGE, Mass.--(BUSINESS WIRE)--January 24, 1995 -- Bolt Beranek and Newman Inc. (NYSE:BBN) today reported a net loss of $1,925,000, or $.11 per share, on sales of $51,172,000 for the second quarter of fiscal year 1995 ended December 31, 1994.

These results include other income of $3,538,000, which arises from contracts which were substantially completed in prior years. For the same period a year ago, the company reported a net loss of $1,666,000, or $.10 per share, on sales of $48,407,000.

For the six months ended December 31, 1994, the company reported a net loss of $3,733,000, or $.22 per share, on sales of $102,915,000, compared with a net loss of $3,613,000, or $.23 per share, on sales on $98,337,000, for the same period in fiscal year 1994.

BBN's results reflect investments in new products and services, including increased spending on sales and marketing, primarily at BBN Internet Services Corporation, and BBN Software Products Corporation. The increase in the company's revenue reflects increases at LightStream Corporation and BBN Internet Services Corporation, which were partially offset by a decline in the company's acoustics and defense communications activities and in lower sales of its mature data analysis products.

The previously announced sale of the assets of LightStream Corporation to Cisco Systems, Inc., which was completed on January 11, 1995, will be reflected in the company's third quarter results. The LightStream sale is expected to result in a gain to the company of approximately $80 million. The company has also signed a letter of intent to acquire SURAnet, a major regional Internet access provider, and that transaction is expected to be completed during the third quarter.

George H. Conrades, president and chief executive officer of BBN, said, "With the sale of LightStream and the acquisition of SURAnet, BBN is focusing on the opportunity to provide internetworking applications and services to businesses. At BBN Internet Services Corporation, we intend to rapidly expand our geographical reach and provide additional services that allow our customers to exploit the power of internetworking. At BBN Software Products, we are working to better integrate our newer CornerstoneTM product with our RS/SeriesTM product line so as to improve support for our installed base, while we gain access to new markets by porting Cornerstone to Windows. At BBN HARK Systems Corporation, we are focusing on telephone-based applications for speech recognition, where we believe we have a technological advantage and where we can add significant value. At BBN Systems and Technologies, where we are conducting a search for a new president, we are using our strengths in systems and technology integration to expand our offering by solving the customer's entire information management challenge."

Conrades continued, "We continue to invest in sales and marketing infrastructure. During the second quarter, we hired Paul R. Gudonis as chief executive officer of BBN Internet Services Corporation. Paul previously served as general manager of the international division of EDS's Communications Industry Group, which he led to very rapid growth. In addition, we added sales or marketing executives in each of our commercially focused business units. We are accelerating our recruiting efforts, particularly in BBN Internet Services Corporation and in BBN Software Products Corporation, so that we can aggressively pursue our market opportunities."

Bolt Beranek and Newman Inc. is a leading provider of internetworked systems that help people work and learn together. In September, the company celebrated the 25th anniversary of its development of the ARPANET, which led to the modern Internet. BBN HARK Systems Corporation captures data through large-vocabulary speech recognition systems. BBN Internet Services Corporation transports data through managed Internet access and value-added services. BBN Software Products Corporation provides applications which extract useful information from data in a client/server environment. BBN Systems and Technologies provides advanced systems and technology integration services. For its fiscal year ended June 30, 1994, BBN had revenue of $196 million.
 BOLT BERANEK AND NEWMAN INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited)


 Three months Six months
 ended ended
 December 31 December 31
Dollars in thousands, except per-
 share data 1994 1993 1994 1993
Revenue:
 Services $40,994 $40,448 $85,370 $83,243
 Products 10,178 7,959 17,545 15,094
 51,172 48,407 102,915 98,337
Costs and expenses:
 Cost of services 27,633 27,370 56,293 57,588
 Cost of products 4,390 3,195 6,975 6,020
 Research and development
 expenses 6,345 5,874 12,300 11,178
 Selling, general and
 administrative expenses 17,911 14,496 33,946 27,603
 ----- ----- ----- -----
 56,279 50,935 109,514 102,389


Loss from operations (5,107) (2,528) (6,599) (4,052)


Interest income 593 535 1,210 1,224
Interest expense (1,094) (1,135) (2,220) (2,336)
Minority interests 445 585 741 585
Other income (expense), net(1) 3,538 877 3,535 966


Loss before income taxes (1,625) (1,666) (3,333) (3,613)
Provision for income taxes 300 400


Net loss ($1,925) ($1,666) ($3,733) ($3,613)


Net loss per share ($0.11) ($0.10) ($0.22) ($0.23)


Shares used in per-share
 calculations 16,819,000 16,079,000 16,717,000 16,029,000


 -0-


Notes to the Consolidated Statements of Operations


(1) Other income includes amounts arising from contracts which were
substantially completed in prior years.
(2) The consolidated statements of operations include the results of
LightStream Corp. The previously announced sale of the assets of
LightStream Corporation to Cisco Systems Inc., which was completed on
January 11, 1995, will be reflected in the company's third quarter
results and is expected to result in a gain of approximately
$80,000,000.
(3) The following is a summary of business segments information for
the three and six months ended December 31, 1994 and 1993. All data
are shown net of intersegment transactions:


 Three months Six months
 ended ended
 December 31 December 31
Dollars in thousands 1994 1993 1994 1993
Revenue:
 Internetworking $22,603 $18,525 $46,289 $38,647
 Data analysis software 8,338 9,061 16,391 17,609
 Collaborative systems and
 acoustic technologies 20,231 20,821 40,235 42,081
 ----- ----- ----- -----
 $51,172 $48,407 $102,915 $98,337


Income (loss) from operations:
 Internetworking ($2,441) ($3,071) ($3,194) ($4,795)
 Data analysis software (2,014) (25) (2,285) 334
 Collaborative systems and
 acoustic technologies 41 1,072 222 1,232
 Unallocated corporate expense (693) (504) (1,342) (823)
 ----- ----- ----- -----
 ($5,107) ($2,528) ($6,599) ($4,052)


 -0-


 BOLT BERANEK AND NEWMAN INC.
 CONSOLIDATED BALANCE SHEETS




Dollars in thousands December 31 June 30
 1994 1994
 (unaudited)
Assets:
 Cash and temporary investments $56,572 $67,115
 Accounts receivable, net 42,301 41,503
 Inventories, net 985 1,114
 Other current assets 5,621 3,592


 Total current assets 105,479 113,324


Property, net 22,147 19,658
Other assets 7,647 2,958
 ----- -----
 $135,273 $135,940


Liabilities and shareholders' equity:
 Payables and other liabilities $27,818 $29,309
 Accrued restructuring 10,533 12,566
 Deferred revenue 13,883 11,112
 Total current liabilities 52,234 52,987


 6% convertible subordinated debentures
 due 2012 73,510 73,510
 Minority interests 1,479 2,172
 Shareholders' equity, net of treasury 8,050 7,271
 ----- -----
 $135,273 $135,940


CONTACT: Jeffrey Mayersohn Ralph Goldwasser

Tel: (617) 873-3596 Tel: (617) 873-2862
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