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CONVEX COMPUTER ANNOUNCES FOURTH QUARTER RESULTS

 CONVEX COMPUTER ANNOUNCES FOURTH QUARTER RESULTS
 RICHARDSON, Texas, Jan. 31 /PRNewswire/ -- Convex Computer


Corporation (NYSE: CNX) reported today its financial results for the fourth quarter ending Dec. 31, 1991. Revenue for the period was $51.7 million, versus $55.5 million for the year-earlier period. The company also reported a net loss of $.9 million, or $.04 per share. During the fourth quarter of 1990, net income was $5.0 million, or 23 cents per share.
 "The fourth quarter results represent a significant improvement over the third quarter of 1991," said Robert J. Paluck, Convex chairman, president and chief executive officer. "We achieved substantial revenue growth over the third quarter revenue of $40.2 million. Gross margins also improved to 45.1 percent, a five percentage point increase over third quarter results. Even though the economic and competitive climate continues to be very difficult, we are encouraged by what we were able to achieve in the fourth quarter."
 For the year ended Dec. 31, 1991, revenue was $198.1 million, versus $209.3 million in 1990. During 1991, the company recorded a net loss of $6.9 million, or 31 cents per share. The comparable results for 1990 were a net profit of $18.4 million, or 88 cents per share.
 "1991 was a challenging year," said Paluck. "Poor worldwide economic conditions, a very competitive sales environment, and our new product transition impacted operating results. In this environment, our focus has been on returning to acceptable financial performance, increasing the availability of our new products, and maintaining tight overhead expense controls. During the fourth quarter of 1991, we began to see the results of that focus." Convex shipped a total of 46 C3 Series supercomputers in the fourth quarter and a record 116 processors. Customer shipments of the company's new C3400 and C3800 supercomputers increased during the quarter.
 During the fourth quarter, the company delivered five high- performance C3800 supercomputers. The C3800 is the world's first supercomputer to be fully implemented with gallium arsenide (GaAs) semiconductor technology and is capable of handling some of the most demanding technical computational tasks. One of these deliveries was to DKRZ, the German weather forecasting center. This four-processor C3800 will be used to assist in developing regional weather forecasts. Since its introduction in May, 1991, Convex has received orders for more than 30 C3800 systems.
 Also during the fourth quarter, Convex delivered 23 mid-range C3400 departmental supercomputers. These systems have been sold into the following major market segments targeted by Convex: computer-aided engineering, computational chemistry, geophysical research, and signal and image processing. A significant win for Convex during the quarter was the sale of a four-processor C3400 to Mercedes-Benz AG which will be used in the structural analysis and design of automobiles. "We continue to be encouraged by customer acceptance of our C3 Series products," said Paluck. "Particularly gratifying is the broad range of applications being addressed by the C3400. We believe the ability to expand the C3400 to eight processors is making it an especially appealing product to our customers.
 "Assuming the economic climate does not deteriorate, and we have adequate supplies of semiconductor components, we are optimistic concerning the outlook for Convex in 1992," noted Paluck. "We believe we are entering the year with a state-of-the-art C3 Series product family and that customers have demonstrated a high level of interest in these systems. With these fundamentals in place, we will remain focused on what we believe to be the keys to improved financial performance: increased availability of our new products, aggressive marketing, and tight overhead expense controls."
 Convex Computer Corporation, a leading supplier of air-cooled supercomputers, was founded in 1982 to design, manufacture, market and service high performance systems. The company markets its products primarily to scientific, engineering and technical users throughout the world for a wide variety of applications in such areas as geophysical research, computational chemistry, computer-aided engineering, image processing, aerospace simulations and molecular biology. Convex has sold nearly 1,000 systems to more than 540 customers in 40 countries. The systems are sold and serviced through direct sales and an extensive distribution network.
 CONVEX COMPUTER CORPORATION
 (Unaudited, in thousands, except per share data)
 Quarter ended 12/31/91 12/31/90 09/30/91
 Total revenue $ 51,743 $ 55,483 $ 40,223
 Operating income
 (loss) (2,664) 6,376 (9,705)
 Net income (loss) (937) 5,037 (8,501)
 Earnings per common
 share-primary &
 fully diluted:
 Net income (loss) $ (.04) $ .23 $ (.38)
 Weighted average
 shares
 outstanding-
 primary: 22,499 21,877 22,335
 Consolidated Statement of Operations
 (Unaudited, in thousands, except per share data)
 Periods ended: Three months Twelve months
 Dec. 31: 1991 1990 1991 1990
 Revenue:
 Product and other revenue $ 40,964 $ 46,738 $158,656 $181,605
 Service revenue 10,779 8,745 39,443 27,722
 Total revenue 51,743 55,483 198,099 209,327
 Costs and expenses:
 Cost of product &
 other revenue 21,773 17,555 78,798 68,054
 Cost of service revenue 6,647 5,788 25,591 19,464
 R&D 7,407 7,001 29,770 27,152
 SG&A 18,580 18,763 72,917 69,600
 Total costs and expenses 54,407 49,107 207,076 184,270
 Operating income (loss) (2,664) 6,376 (8,977) 25,057
 Other income (expense), net (591) 815 (164) 2,246
 Income (loss) before prov.
 for income taxes (3,255) 7,191 (9,141) 27,303
 Provision (benefit)
 for income taxes (2,318) 2,154 (2,250) 8,871
 Net income (loss) $ (937) $ 5,037 $ (6,891) $18,432
 Earnings per common share -
 primary & fully diluted:
 Net income (loss) $ (.04) $ .23 $ (.31) $ .88
 Weighted average shares
 outstanding - primary: 22,499 21,877 22,122 20,899
 Consolidated Balance Sheet
 (Unaudited, dollars in thousands)
 December 31, 1991
 ASSETS
 Cash, cash equivalents
 & short-term
 investments $ 73,788
 Receivables, net 66,368
 Current portion of
 long-term
 receivables 11,474
 Inventory 39,956
 Prepaid expenses
 and other current
 assets 15,062
 Total current assets 206,648
 Fixed assets, net 43,980
 Long-term receivables 17,951
 Other assets, net 4,069
 TOTAL ASSETS $272,648
 LIABILITIES & SHAREHOLDERS' EQUITY
 Current liabilities:
 Accounts payable $ 12,492
 Accrued payroll and
 related taxes 7,580
 Current portion of
 notes payable 7,773
 Deferred revenue 14,191
 Other current
 liabilities 20,930
 Total current liabilities 62,966
 Long-term liabilities:
 Notes payable 10,257
 6 percent convertible
 subordinated
 debentures 53,500
 Total long-term
 liabilities 63,757
 Shareholders' equity:
 Common stock 225
 Additional capital 119,601
 Retained earnings 27,733
 Cumulative translation
 adjustment (1,634)
 Total shareholders' equity 145,925
 Total liabilities &
 shareholders' equity $272,648
 -0- 1/31/91
 /CONTACT: Bill Cool, 214-497-4956, or Donna Burke, 214-497-4230, both of Convex Computer/
 (CNX) CO: Convex Computer Corporation ST: Texas IN: CPR SU: ERN


TS -- NY006 -- 5459 01/31/92 08:04 EST
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