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NETWORK SYSTEMS ANNOUNCES THIRD-QUARTER, NINE-MONTHS 1992 RESULTS

 NETWORK SYSTEMS ANNOUNCES THIRD-QUARTER, NINE-MONTHS 1992 RESULTS
 MINNEAPOLIS, Oct. 22 /PRNewswire/ -- Network Systems Corporation (NASDAQ-NMS: NSCO), a manufacturer of high-performance data communications systems, today announced unaudited results for the three- and nine-months ended Sept. 30, 1992.
 Revenues for the third quarter were $57,340,000, a 5 percent increase over the $54,429,000 reported in the same period a year earlier. Net income for the quarter was $4,797,000, or $.16 per share, equal to the $4,915,000, or $.16 per share, earned in the third quarter of 1991.
 Revenues for the nine months ended Sept. 30, 1992, were $160,180,000, up 20 percent from last year's revenues of $133,399,000. Net income for the period was $10,279,000, or $.33 per share, up 7 percent from $9,633,000, or $.32 per share, during the same period last year.
 Michael J. Fitzpatrick, president and chief executive officer, said, "the results are consistent with our expectations. Product revenues increased by over 20 percent year-to-date, and we are showing steady growth in each of our market segments. We are particularly pleased with the number of new customers worldwide and the strength of our European business. In the U.S., we are very pleased with the acceptance of the 6600 router family, which had experienced delays earlier. With further enhancements to the 6600 to be announced shortly, we expect to continue expanding our share of the internetworking market."
 Fitzpatrick also commented that the channel networking business remains very strong, and that the company entered the fourth quarter with both a large backlog of orders and a strong sales forecast for the rest of the year.
 Network Systems Corporation, based in Minneapolis, makes high- performance data communications systems. The company's stock is traded on the NASDAQ National Market System.
 NETWORK SYSTEMS CORPORATION
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 (In thousands except per-share amounts)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 1992 1991 1992 1991
 Revenues
 Product $40,392 $39,092 $110,638 $92,420
 Service 16,948 15,337 49,542 40,979
 Total revenues 57,340 54,429 160,180 133,399
 Cost of revenues
 Product 15,968 15,762 43,801 34,926
 Service 11,088 9,763 32,473 28,192
 Total cost of
 revenues 27,056 25,525 76,274 63,118
 Gross profit 30,284 28,904 83,906 70,281
 Operating expenses
 Research and
 development 6,183 6,171 18,373 15,401
 Marketing, general,
 and administrative 17,745 16,357 51,884 43,534
 Costs of acquisition 3,974
 Amortization of
 intangibles 814 820 2,443 1,120
 Total operating
 expenses 24,742 23,348 72,700 64,029
 Income from operations 5,542 5,556 11,206 6,252
 Interest income, net of
 interest and other
 expense 2,345 1,919 5,633 8,401
 Income before income
 taxes 7,887 7,475 16,839 14,653
 Income taxes 3,090 2,560 6,560 5,020
 Net income $4,797 $4,915 $10,279 $9,633
 Net income per share $.16 $.16 $.33 $.32
 Common and common
 equivalent shares
 used in the calculation
 of net income per
 share 30,688 31,178 31,009 30,478
 NETWORK SYSTEMS CORPORATION
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 (In thousands)
 September 30, December 31,
 1992 1991(a)
 Assets:
 Cash and short-term investments
 and marketable securities $82,301 $68,533
 Trade receivables, net 63,383 64,962
 Other receivables 3,707 3,673
 Inventories 19,091 25,051
 Other current assets 10,156 10,387
 Total current assets 178,638 172,606
 Net property, plant, and
 equipment 38,733 37,082
 Marketable securities 42,913 52,494
 Goodwill and other
 intangible assets, net 49,215 51,658
 Other assets 32,646 28,971
 -- $342,145 $342,811
 Liabilities and stockholders'
 equity:
 Current liabilities $41,494 $44,578
 Long-term debt 1,000 2,822
 Other long-term liabilities 5,338 6,677
 Deferred revenue 2,000 3,500
 Deferred compensation 9,570 8,151
 Deferred income taxes 2,940 2,940
 Total stockholders' equity 279,803 274,143
 -- $342,145 $342,811
 (a)The balance sheet at Dec. 31, 1991, has been condensed from the audited statements.
 -0- 10/22/92
 /CONTACT: M. F.G. Ashby of Network Systems, 612-424-4888/
 (NSCO) CO: Network Systems Corporation ST: Minnesota IN: CPR SU: ERN


AL -- MN016 -- 3817 10/22/92 16:16 EDT
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Date:Oct 22, 1992
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