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DSC REPORTS IMPROVED THIRD QUARTER 1992 RESULTS

 DSC REPORTS IMPROVED THIRD QUARTER 1992 RESULTS
 DALLAS, Oct. 20 /PRNewswire/ -- DSC Communications Corporation


(NASDAQ: DIGI) announced today net income of $6.9 million, or $0.16 per share, for the three months ended Sept. 30, 1992 on revenue of $142.4 million, compared to a net loss of $78.8 million, or $1.90 per share, for the third quarter of 1991 on revenue of $97.6 million.
 For the nine months ended Sept. 30, 1992, the company reported revenue of $373.6 million and a net loss of $1.5 million, or $0.04 per share, compared to revenue of $348.3 million and a net loss of $100.3 million, or $2.43 per share, for the first nine months of 1991. Third quarter and nine month 1991 results included approximately $46.1 million of non-cash charges for asset write downs, provisions for doubtful receivables and restructuring costs. Additionally, the nine month 1991 results included $9.0 million of similar charges recorded in the second quarter of 1991.
 Net income of $6.9 million, or $0.16 per share, for the 1992 third quarter improved significantly from second quarter 1992 results of $2.0 million, or $0.05 per share. Third quarter 1992 revenue was 46 percent higher than recorded in the third quarter of 1991, and exceeded 1992 second quarter revenue by over 10 percent, while gross margin improved to 40 percent.
 Continued strong shipments of switching system products, including both hardware and software deliveries of tandem products and signal transfer points, in addition to a higher volume of transmission products were major factors contributing to the revenue and gross margin improvements. Third quarter 1992 results included provisions for legal and related costs associated with litigation activities and senior debt restructuring costs of approximately $2.5 million.
 The company also generated sufficient cash internally during the 1992 third quarter to pay down its senior unsecured debt by approximately $35 million and increase its cash balances from the end of June 1992 by $9.0 million to $75.0 million at Sept. 30, 1992.
 In conjunction with the company's expected continuing positive cash flow and cash management activities, including contractual prepayments due in the 1992 fourth quarter, the company intends to repay all but $25 million of its senior unsecured debt by the end of 1992. Subsequent to Sept. 30, 1992, the company repaid $55 million to the senior unsecured lenders reducing the balance outstanding to approximately $70 million. The company has also obtained agreement with a senior lender who is owed $25 million to retain the original maturity and repayment schedule through 1996. Additionally, the company has entered into an agreement with all of the senior unsecured lenders which is consistent with the company's intent to repay the remaining debt by the end of 1992.
 DSC chairman and chief executive officer, James L. Donald, stated that, "The financial performance of the company has improved significantly during the first nine months of 1992 with both revenue and earnings improving each quarter. At the same time, customer orders continue to gain strength resulting in a backlog at the end of September 1992 significantly higher than at the end of June 1992. Additionally, our ability to generate significant amounts of cash internally, due not only to improved operating performance but also to our intense focus on working capital management, has been very satisfying."
 Donald went on to add that, "We believe the increased demand for the company's products combined with our continuing focus on expense control, operating efficiency and asset management should result in a higher level of earnings in the future."
 DSC Communications Corporation is a leading designer, developer, manufacturer and marketer of digital switching, transmission and private network system products for the worldwide telecommunications marketplace.
 DSC COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1992 1991 1992 1991
 (Unaudited)
 Revenue $142,358 $ 97,578 $373,606 $348,293
 Operating costs and expenses:
 Cost of revenue 85,677 84,116 240,706 261,986
 Research and product
 development expense 18,016 16,146 45,723 46,647
 Selling, general and
 administrative expense 22,605 22,574 63,327 69,110
 Write-down of assets -- 36,900 -- 36,800
 Provision for doubtful
 receivables -- 6,100 -- 7,100
 Restructuring costs -- 3,184 -- 4,184
 Other operating costs 644 1,110 3,664 3,330
 Total operating costs and
 expenses 126,942 170,030 353,420 429,157
 Operating income (loss) 15,416 (72,452) 20,186 (80,864)
 Financing costs and other, net 7,679 6,301 20,697 17,962
 Income (loss) before income
 taxes 7,737 (78,753) (511) (98,826)
 Income taxes 800 -- 1,000 1,509
 Net income (loss) $ 6,937 $(78,753) $ (1,511) $(100,335)
 Income (loss) per share $ 0.16 $ (1.90) $ (0.04) $ (2.43)
 Average shares used in
 computation 43,557 41,482 41,879 41,224
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
 Sept. 30, Dec. 31,
 1992 1991
 (Unaudited)
 Assets
 Cash and cash
 equivalents $ 74,975 $ 26,366
 Receivables 104,943 116,784
 Inventories 110,005 139,039
 Other current assets 18,084 24,666
 Total current assets 308,007 306,855
 Property and equipment,
 net 145,361 162,521
 Capitalized software
 development costs 28,674 29,563
 Cost in excess of net
 assets of businesses
 acquired, net 63,143 65,859
 Other assets 37,432 35,116
 Total assets $582,617 $599,914
 Liabilities and
 Shareholders'
 Equity
 Current liabilities $281,421(A) $301,864(A)
 Noncurrent liabilities 123,441 123,364
 Shareholders' equity 177,755 174,686
 Total liabilities
 and shareholders'
 equity $582,617 $599,914
 (A) Includes $128,176 and $169,676 of senior debt due and/or subject to accelerated maturity at Sept. 30, 1992 and Dec. 31, 1991, respectively. In October 1992, approximately $55,000 of the outstanding senior debt was repaid.
 -0- 10/20/92
 /CONTACT: Terry Adams of DSC Communications, 214-519-4358/
 (DIGI) CO: DSC Communications Corporation ST: Texas IN: TLS SU: ERN


PS -- NY020 -- 2051 10/20/92 09:27 EDT
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