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ICOT CORPORATION REPORTS FINANCIAL RESULTS FOR FISCAL 1993

 SAN JOSE, Calif., Aug. 27 /PRNewswire/ -- ICOT Corp. (NASDAQ: ICOT) today announced sales and earnings for fiscal year 1993.
 For the fiscal year ended July 31, 1993, sales decreased 53 percent to $12,307,000 from sales in the previous fiscal year of $26,324,000. Net loss for fiscal year 1993 was $5,963,000 or 46 cents per share compared to a profit of $3,133,000 or 23 cents per share in fiscal year 1992. The loss for fiscal year 1993 includes restructuring expense of $2,871,000 which includes an expense of $1,454,000 for writing off the capitalized software development costs associated with the company's PC-Connectivity products. With the company's change in marketing strategy to an OEM customer base, capitalization is no longer appropriate.
 For the fourth quarter ended July 31, 1993, sales of $2,546,000 were 52 percent lower than sales of $5,305,000 reported for the same period last fiscal year. Net loss for the fourth quarter of fiscal 1993 was $2,296,000 or 18 cents per share compared to net income of $401,000 or 3 cents per share for the fourth quarter of fiscal 1992. Net loss for the fourth quarter of fiscal 1993 includes a restructuring expense of $2,271,000 which includes an expense of $1,454,000 for writing off capitalized software development costs.
 According to Aamer Latif, president and chief executive officer, "The less favorable financial results for the fiscal year 1993 as compared to the prior year are due to a decrease in shipments to IBM, the company's largest OEM customer. Shipments of PC-Connectivity products were flat for the year, but 30 percent lower in the fourth quarter of fiscal year 1993 as compared to the fourth quarter of fiscal year 1992. The latter is consistent with the company's previously announced intention of concentrating its focus on its OEM business and on strategic end users of its PC-Connectivity products." Latif went on to say, "The outlook for improving performance during fiscal year 1994 is good. It should be noted, however, that the company's performance with its largest OEM customer, IBM, is critical to achieving that improvement."
 ICOT Corp. is a provider of network connectivity systems for the PC-Connectivity and OEM markets. ICOT's products include local area network gateways, client based workstation software and network data communications interfaces. The products are sold principally in the United States from its corporate headquarters in San Jose and its sales office in Natick, Mass.
 ICOT CORP.
 Consolidated Condensed Statements of Operations
 (Unaudited)
 (In thousands, except per share amounts)
 Three Months Ended 12 Months Ended
 July 31, July 25, July 31, July 25,
 1993 1992 1993 1992
 Net sales $ 2,546 $ 5,305 $ 12,307 $ 26,324
 Cost of sales 1,627 2,420 7,622 12,671
 Gross margin 919 2,885 4,685 13,653
 Operating expenses:
 Research and
 development 347 706 2,533 2,406
 Marketing and
 sales 213 1,240 3,365 5,040
 General and
 administrative 435 644 2,137 3,276
 Restructuring
 costs 2,271 -- 2,871 --
 Total operating
 expenses 3,266 2,590 10,906 10,722
 Income (loss)
 from operations (2,347) 295 (6,221) 2,931
 Other expense (income):
 Interest income (63) (115) (291) (505)
 Interest expense 12 9 33 38
 Total other
 expense (51) (106) (258) (467)
 Income (loss) before
 income taxes (2,296) 401 (5,963) 3,398
 Provision for
 income taxes -- -- -- 265
 Net income (loss)$(2,296) 401 $(5,963) $ 3,133
 Net income (loss)
 per share $ (0.18) $ 0.03 $ (0.46) $ 0.23
 Number of shares
 used in
 computation 12,852 13,586 12,897 13,471
 Condensed Consolidated Balance Sheets
 (In thousands)
 July 31, 1993 July 25, 1992
 ASSETS
 Current assets:
 Cash and cash equivalents $ 8,800 $ 12,892
 Accounts receivable, less
 allowance of $32 in 1993
 and $34 in 1992 966 2,182
 Inventories 860 2,112
 Other current assets 562 509
 Total current assets 11,188 17,695
 Equipment and leasehold
 improvements -- net 1,208 1,453
 Software development costs, net of
 amortization of $4,189 in 1993
 and $2,043 in 1992 -- 1,953
 Other assets 540 --
 Total assets $12,936 $ 21,101
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Current maturities of capitalized
 lease obligations $ 102 $ 83
 Accounts payable and accrued
 expenses 2,171 2,371
 Employee compensation 325 1,588
 Total current liabilities 2,598 4,042
 Long-term debt and liabilities:
 Capitalized lease obligations,
 less current maturities 97 173
 Obligations under rent
 commitments 1,002 1,393
 Total long-term debt and
 liabilities 1,099 1,566
 Stockholders' equity 9,239 15,493
 Total liabilities and
 stockholders' equity $12,936 $ 21,101
 -0- 8/27/93
 /CONTACT: Aamer Latif, president and chief executive officer of ICOT, 408-433-3300/
 (ICOT)


CO: ICOT Corp. ST: California IN: CPR SU: ERN

LH-TM -- SJ001 -- 6490 08/27/93 09:04 EDT
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Date:Aug 27, 1993
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