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DELL INDICATES SECOND-QUARTER LOSS

 AUSTIN, Texas, July 14 /PRNewswire/ -- Dell Computer Corporation (NASDAQ: DELL) said today that it expects to report a loss of $1.65 to $1.85 per share for the second fiscal quarter due to significant writedowns and restructuring charges. The quarter ends Aug. 1, 1993.
 The company expects to take $75 million to $85 million in pretax charges for the quarter. The charges stem primarily from:
 -- restructuring operations to consolidate several common functions and improve efficiency, principally in international markets;
 -- inventory writedowns and related costs associated with system and process weaknesses resulting from the company's hypergrowth; and
 -- additional costs associated with delayed and canceled notebook projects.
 Dell reiterated that it believes it will be able to report year-to- year growth in quarterly earnings by the fourth quarter of the year.
 "While the loss is certainly disappointing, we are determined to take the steps necessary to strengthen Dell for the future," said Michael S. Dell, chairman and chief executive officer. "We have aggressively provided for known exposures with these charges," he continued. "However, there is still work to be done as we further identify the systems and process improvements needed to support the increasing complexity of our business and the three billion dollars in revenue we expect to generate this fiscal year."
 The company also said that if the projected loss occurs, it may result in the company being in default of specific financial covenants in its revolving credit facility. Thomas J. Meredith, chief financial officer, said that he is working with the company's lenders to favorably resolve the situation, and that he does not expect a default to occur.
 "I am confident that we will be able to secure alternative financing or obtain a waiver before any default would materialize," Mr. Meredith said.
 Dell said it expects to report revenues of $710 million to $730 million for the second fiscal quarter, up 55 to 60 percent compared with the second quarter of last fiscal year, and revenues of approximately $3 billion for the current fiscal year compared with $2 billion for fiscal 1993.
 "Our overall sales are continuing to grow rapidly," Mr. Dell said, "although we, like many other computer companies, are experiencing soft demand in European markets.
 "We have strengthened our management team with experienced executives from many leading companies," he continued. "We are focused on rebuilding our profitability quickly, developing the systems we need to support our growth, and reentering the notebook business in a major way."
 A Fortune 500 Company, Dell Computer Corporation designs, develops, manufactures, markets, services, and supports a complete line of personal computers compatible with industry standards. Dell pioneered the direct marketing of PCs in 1984 and was the first company in the PC industry to offer manufacturer-direct, technical support. According to Dataquest, a market data organization, Dell is the fifth largest PC company in the world with fiscal 1993 revenues of more than $2 billion. Information on the company and its products can be obtained through its toll-free number: 1-800-BUY-DELL (1-800-289-3355).
 NOTE: Dell is a registered trademark of Dell Computer Corporation. Dell Computer Corporation disclaims any proprietary interest in the marks and names of others.
 -0- 7/14/93
 /CONTACT: Don Collis, or Ken Smith, investor, 512-728-8671, or 512-728-4034, or Michele Moore, media, 512-728-4100, all of Dell Computer Corporation/
 (DELL)


CO: Dell Computer Corporation ST: Texas IN: CPR SU: ERN

LD -- NY009 -- 1158 07/14/93 01:00 EDT
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Publication:PR Newswire
Date:Jul 14, 1993
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