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DATA RACE ANNOUNCES RECORD REVENUE AND EARNINGS FOR FISCAL YEAR 1993

 SAN ANTONIO, Texas, Aug. 18 /PRNewswire/ -- Data Race, Inc. (NASDAQ: RACE) announces record revenue for the fourth quarter and for fiscal year 1993. Revenue for the three months ended June 30, 1993 was $12,592,745, 61 percent higher than the prior year's fourth quarter. Net income for the period of $1,283,918 was 38 percent higher than the previous year's fourth quarter. For fiscal year 1993 the company recorded revenues of $43,933,771, up 102 percent from the previous year while net income reached $4,916,083, up 111 percent from fiscal year 1992.
 Revenues for the fourth quarter reflect changes in the company's channel of distribution. The PC dealer channel that markets a wide range of data/FAX products to personal computer distributors and dealers grew 265 percent from the fourth quarter of fiscal 1992. Network products, which are voice, fax, and data communication products sold through traditional data communication distributors worldwide, grew 65 percent from the previous year's fourth quarter. Data Race 's OEM channel that markets data/FAX products to large computer manufacturers such as NCR, Texas Instruments, Dell, AST and Zenith, grew 28 percent in the fourth quarter of fiscal 1993 compared to the same quarter of fiscal 1992. The company's OEM business was approximately 50 percent of total revenue in the fourth quarter of fiscal 1993. This compares to the fourth quarter of fiscal 1992 in which OEM revenue represented 64 percent of total revenue.
 Data Race had the most successful year in its 10 year history with all of its niche markets showing strong growth. For fiscal year 1993, revenues increased by the following percentages: OEM, 90 percent; dealer, 466 percent and network products, 63 percent.
 Gross profit margins for the fourth quarter of fiscal 1993 were 35 percent compared to 40 percent covering the comparable period last year. Gross margins were impacted by lower margins in the company's OEM business compared to an unusually high gross margin during the fourth quarter of 1992. In addition, margins were reduced by an increase in inventory reserves during the fourth quarter. For the year, gross profit margins declined slightly to 38 percent for fiscal 1993 compared to 40 percent attained the previous year.
 Operating income for the fourth quarter of fiscal 1993 was $1,967,858 or 16 percent of revenue compared to 18 percent achieved during the fourth quarter of fiscal 1992. For both fiscal year 1993 and 1992 operating income was 17 percent of revenue. Earnings per share for the fourth quarter of fiscal 1993 were $.27 compared to $.27 for the same period of the previous year. Weighted average shares used to calculate earnings per share for the respective quarters were 4,802,000 compared with 3,404,000 used for the last quarter of 1992. For the full year earnings per share were $1.12 using 4,409,000 weighted average shares compared to $.70 using 3,313,000 weighted average shares during 1992. During fiscal year 1993, Data Race issued 1,372,500 new shares in an initial public offering.
 Backlog as of June 30, 1993 was approximately $4,600,000 compared to $9,200,000 as of June 30, 1992. Current backlog reflects the transition of the company from being primarily an OEM supplier with large backlog to a more dealer/distributor orientation for its data/FAX products with small backlogs and short lead-times. The reduced backlog is also due to product transitions that have occurred with some of the company's large OEM accounts during the quarter and the requirements by OEM customers that lead times be reduced. Consequently, the company has increased inventory so that quick delivery could be made upon receipt of orders.
 The company recognizes that many companies in the PC industry are undergoing radical changes and many of the company's traditional customers are in transition, consolidation or rapidly changing product evolution. In order to sustain growth and to capture market share, the company acquired the assets of OmniTel and has commenced delivery of product to several of these new customers. The nature of the notebook computer internal modem business is changing and the company must adapt to the changing market trends in order to sustain its growth. Future modem revenue levels are dependent on product transitions by our OEM customers and on how fast the company's new channels of distribution take effect.
 NEW PRODUCTS
 At Interop '93, Aug. 25-27, 1993 in San Francisco, Data Race will introduce MACHnet(TM), a new remote Ethernet LAN bridge for its MACH DS plus(TM) multiplexer line. End-users will now be able to integrate Voice/Fax/Data and LAN traffic over one or more wide area links. The major benefits of this new technology are substantial cost-savings and a quick payback period -- measured in months, not years.
 Using MACH DS plus with a MACHnet feature module allows users to interconnect remote Ethernet LANs as well as combine multiple leased and dial-up lines over single or multiple wide area links. This integration saves money by eliminating the cost of dial-up voice and fax calls, as well as monthly leased line expenses. MACHnet operates on 56, 64, or 128 Kbps wide area links making it an ideal solution for LAN users whose traffic needs don't justify the installation of full T1 or expensive bridging facilities.
 Also during Interop '93, Data Race will announce four new cost- saving features to its MACH DS plus line of multiplexers. The new features are: Multiple 128 Kbps wide area links, integrated 14,400 bps and 19,200 bps dial or leased line wide area link modems, MACHnet a remote Ethernet LAN bridge feature module and low-bandwidth (4.8 to 8 Kbps) FreeSpeech(TM) voice and fax.
 These new features give the user greater network flexibility when adding users, interconnectivity LANs, and increasing the number of voice/FAX channels to the network. The net result being faster payback and improved user productivity.
 ABOUT DATA RACE
 Data Race is a publicly held company and a leading manufacturer of high performance data communication products for portable computers. Data Race is also a leading provider of Voice/FAX/Data/LAN multiplexers that integrate voice, Fax, data and LAN traffic over a single link between the headquarters of an enterprise and its remote offices.
 Data Race can be reached at 1-800-329-7223, FAX: 210-558-1929; 11550 IH-10 West, Suite 395, San Antonio, Texas 78230.
 Data Race(R) is a registered trademark of Data Race, Inc. and FreeSpeech, MACH DS plus, MACHnet are trademarks of Data Race, Inc. All other trademarks are acknowledged.
 DATA RACE, INC.
 Quarter Ending June 30 Year Ending June 30
 STATEMENT OF INCOME: 1993 1992 1993 1992
 Total Revenue $12,592,745 $ 7,830,041 $43,933,771 $21,720,043
 Cost of Revenue 8,202,953 4,711,198 27,285,744 13,124,394
 Gross Profit 4,389,792 3,118,843 16,648,027 8,595,649
 Operating Expenses:
 Engineering & Product
 Development 476,119 534,605 2,725,502 1,486,688
 Sales &
 Marketing 1,583,773 750,918 4,623,499 2,284,236
 G&A 362,042 397,523 1,883,601 1,200,584
 Total Operating
 Expenses 2,421,934 1,683,046 9,232,602 4,971,508
 Operating Inc. 1,967,858 1,435,797 7,415,425 3,624,141
 Other Inc./(Expense) 50,277 (4,313) 199,266 (22,654)
 Income Before
 Income Taxes 2,018,135 1,431,484 7,614,691 3,601,487
 Income Tax Expense 734,217 503,375 2,698,608 1,266,434
 Net Income $ 1,283,918 $ 928,109 $ 4,916,083 $ 2,335,053
 Earnings Per Share:
 Net Income $0.27 $0.27 $1.12 $0.70
 Wtd. Avg. Shares
 Outstanding 4,802,000 3,404,000 4,409,000 3,313,100
 BALANCE SHEETS: 06/30/93 06/30/92
 Cash and cash equivalents $ 6,625,807 $ 877,496
 Short-term investments -- 162,368
 Accounts Receivable, Net 8,843,269 4,770,135
 Inventory 16,175,794 5,272,264
 Other Current Assets 729,112 194,366
 Total Current Assets 32,373,982 11,276,629
 Property and Equipment, Net 3,035,268 813,072
 Capitalized Software, Net 684,445 376,520
 Other Assets, Net 2,474,866 19,362
 Total Assets $38,568,561 $12,485,583
 Current Liabilities $ 6,969,859 $ 5,706,898
 Long-Term Debt, Net of
 Current Portion 13,059 764,671
 Other Long-Term Liabilities 510,906 --
 Shareholders' Equity:
 Convertible Preferred Stock -- 2,286,359
 Common Stock 23,693,830 1,262,801
 Retained Earnings 7,380,927 2,464,854
 Total Shareholders' Equity 31,074,737 6,014,014
 Total Liabilities & Shareholders'
 Equity $38,568,561 $12,485,583
 -0- 8/18/93
 /CONTACT: Herb Hensley or Steve Riebel of Data Race, 210-558-1900, or Alan Weinkrantz of Alan Weinkrantz and Company, 210-820-3070/
 (RACE)


CO: Data Race , Inc. ST: Texas IN: CPR SU: ERN

SH -- NY017 -- 3850 08/18/93 10:51 EDT
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Date:Aug 18, 1993
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