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DSC REPORTS SECOND QUARTER 1992 PROFIT

 DSC REPORTS SECOND QUARTER 1992 PROFIT
 DALLAS, July 21 /PRNewswire/ -- DSC Communications Corporation


(NASDAQ: DIGI) announced today net income of $2.0 million, or $0.05 per share, for the three months ended June 30, 1992 on revenue of $128.5 million, compared to a net loss of $25.7 million, or $0.62 per share, for the second quarter of 1991 on revenue of $116.9 million. For the six months ended June 30, 1992, the company reported revenue of $231.2 million and a net loss of $8.4 million, or $0.20 per share, compared to revenue of $250.7 million and a net loss of $21.6 million, or $0.53 per share, for the first half of 1991. Second quarter and six month 1991 results included charges of approximately $9.0 million related to provisions for inventory, receivables and restructuring costs.
 Second quarter 1992 revenue was 25 percent greater than 1992 first quarter revenue and 10 percent higher than recorded in the second quarter of 1991, while gross margin improved to 35.6 percent. Backlog at June 30, 1992 remained at approximately $150 million. Higher deliveries of switching products, particularly signal transfer points, and access and transmission products all contributed to the revenue growth and improved gross margin.
 The company also reported that internally generated funds increased cash balances to $66.0 million at June 30, 1992, a $28.3 million increase from March 31, 1992 and a growth of $39.7 million from the end of 1991. Cash flow from operations, a $21.3 million reduction in inventory from the end of 1991, and improved receivable collection days were major factors resulting in the significantly improved cash position. Efforts to reach a senior debt restructuring satisfactory to the company, including maturity extension and increased borrowing availability, have continued, and the company expects an agreement will be reached in the third quarter.
 DSC chairman and chief executive officer, James L. Donald, stated that, "The company's improved financial performance has been very satisfying, particularly in light of the continuing difficult economic environment. We were especially pleased that customer orders for our major products gained strength during the first half of the year, resulting in a growth in order backlog at June 30, 1992 of approximately 70 percent from the end of 1991. Additionally, our focus on receivables and inventory management has resulted in significantly improved cash balances."
 Donald went on to add that, "Although the company is again profitable, we are still looking towards a higher level of earnings as we move forward. Expense control and improved operating efficiency, in addition to asset management, will remain priorities. By focusing on these areas, we are confident that we have chosen the correct path to ensure a continuing level of improvement in operating performance. This process should be further helped by the gradually improving economy."
 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)
 Periods ended Three Months Six Months
 June 30 1992 1991 1992 1991
 (unaudited)
 Revenue $128,532 $116,919 $231,248 $250,715
 Operating costs and
 expenses:
 Cost of revenue 82,761 93,377 155,029 177,870
 Research and product
 development expense 15,450 15,845 27,707 30,501
 SG&A expense 20,964 24,614 40,722 47,536
 Other operating costs 1,910 2,110 3,020 3,220
 Total operating costs
 and expenses 121,085 135,946 226,478 259,127
 Operating income (loss) 7,447 (19,027) 4,770 (8,412)
 Financing costs and
 other, net 5,216 6,636 13,018 11,661
 Income (loss) before
 income taxes 2,231 (25,663) (8,248) (20,073)
 Income taxes 200 -- 200 1,509
 Net income (loss) $ 2,031 $(25,663) $ (8,448) $(21,582)
 Income (loss) per share $ 0.05 $ (0.62) $ (0.20) $ (0.53)
 Average shares used in
 computation 42,469 41,260 41,768 41,093
 DSC COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 Condensed Consolidated Balance Sheets
 (In thousands)
 June 30, December 31,
 1992 1991
 (Unaudited)
 Assets
 Cash & cash equivalents $ 66,023 $ 26,366
 Receivables 112,971 116,784
 Inventories 117,753 139,039
 Other current assets 16,710 24,666
 Total current assets 313,457 306,855
 Property and equipment, net 147,721 162,521
 Capitalized software
 development costs 29,516 29,563
 Cost in excess of net assets
 of businesses acquired, net 64,049 65,859
 Other assets 36,639 35,116
 Total assets $ 591,382 $ 599,914
 Liabilities & Shareholders'
 Equity
 Current liabilities $ 301,157(A) $ 301,864(A)
 Noncurrent liabilities 123,225 123,364
 Shareholders' equity 167,000 174,686
 Total liabilities &
 shareholders' equity $ 591,382 $ 599,914
 -- (A) Includes $166,875 and $169,676 of senior debt due and/or subject to accelerated maturity at June 30, 1992 and Dec. 31, 1991, respectively, which is in the process of being restructured.
 -0- 7/21/92
 /CONTACT: Terry Adams of DSC, 214-519-4358/
 (DIGI) CO: DSC Communications Corporation ST: Texas IN: TLS SU: ERN


AH -- NY072 -- 1373 07/21/92 13:11 EDT
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