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PICTURETEL CORPORATION ANNOUNCES THIRD QUARTER RESULTS; UNIT SHIPMENTS INCREASE 36 PERCENT FROM PREVIOUS YEAR

 DANVERS, Mass., Oct. 20 /PRNewswire/ -- PictureTel Corporation (NASDAQ: PCTL), today reported a 9 percent increase in revenue for the third quarter of 1993 compared to the same period in 1992. Total revenues for the third quarter ended Oct. 2, 1993 were $39.4 million on shipments of approximately 950 units compared with $36.0 million on shipments of approximately 700 units for the same period in 1992. Revenue increased 30 percent to $127.6 million for the nine month period ended Oct. 2, 1993 as compared to $98.4 million for the same period in 1992.
 The company also reported third quarter net income, of $.6 million or $.04 per share, compared to $1.9 million, or $.12 per share, for the same quarter of the prior year ($.11 per share before the effect of net operating loss carryforwards). Net income for the nine months ended Oct. 2, 1993 was $6.9 million or $.44 per share compared to $8.0 million or $.51 per share for the same period in 1992. The 1993 results include $.07 per share due to the cumulative effect of change in accounting principle and the 1992 results include $.14 per share due to net operating loss carry forwards.
 "The third quarter represents a transition quarter for PictureTel" said Dr. Norman Gaut, chairman and chief executive officer of PictureTel. "We have been investing heavily this year in the development of new desktop and low-end room system products which we announced this summer and which will begin to ship in the fourth quarter. Reaction to the new products has been extremely favorable. In addition, we have continued to expand our sales and support presence around the world, adding a direct presence in Sweden, France and Australia while continuing to support our end-users and channels in the U.S. We believe that our strong system and networking products, enhanced with the System 1000(TM) and PictureTel LIVE(TM) PCS 100(TM) offerings, plus our global sales and support infrastructure position PictureTel to continue to lead in the videoconferencing marketplace."
 PictureTel Corporation develops, manufactures and markets a full range of visual telecommunications solutions that are "Redefining the Way the World Meets(TM)." PictureTel enables worldwide video communications through an easy to use, dial-up family of standards-based videoconferencing systems.
 PICTURETEL CORPORATION
 Consolidated Statements of Income
 (in thousands, except per share data)
 Three Months Ended Nine Months Ended
 (unaudited) (unaudited)
 10/02/93 09/26/92 10/02/93 09/26/92
 Revenues $39,371 $36,000 $127,553 $98,403
 Cost of Sales $17,036 $16,718 $ 54,602 $45,536
 Gross Margin $22,335 $19,282 $ 72,951 $52,867
 Operating Expenses
 Selling, general
 and administrative $15,070 $12,380 $ 44,500 $32,143
 Research and development $ 6,980 $ 6,100 $ 21,185 $14,865
 Total operating expenses $22,050 $18,480 $ 65,685 $47,008
 Income from Operations $ 285 $ 802 $ 7,266 $ 5,859
 Other Income (Expense), net $ 788 $ 1,938 $ 2,136 $ 3,609
 Income before taxes,
 extraordinary credit and
 cumulative effect of
 change in accounting
 principle $ 1,073 $ 2,740 $ 9,402 $ 9,468
 Provision for Income Taxes $ 444 $ 1,069 $ 3,526 $ 3,693
 Income before
 extraordinary credit and
 cumulative effect of
 change in accounting
 principle $ 629 $ 1,671 $ 5,876 $ 5,775
 Extraordinary Credit (NOL) $ 0 $ 254 $ 0 2,272
 Cumulative effect of change
 in accounting principle $ 0 $ 0 $ 1,042 $ 0
 Net Income $ 629 $ 1,925 $ 6,918 $ 8,047
 Income per share before
 extraordinary credit and
 cumulative effect of
 change in accounting
 principle .04 cents .11 cents .37 cents .37 cents
 Extraordinary Credit
 per share .00 cents .01 cents .00 cents .14 cents
 Cumulative effect of
 change in accounting
 principal per share .00 cents .00 cents .07 cents .00 cents
 Net Income per
 common share .04 cents .12 cents .44 cents .51 cents
 Weighted average number of
 common shares outstanding 15,825 15,587 15,659 15,896
 PICTURETEL CORPORATION CONSOLIDATED BALANCE SHEETS
 (IN THOUSANDS)
 10/02/93 12/31/92
 (Unaudited) (Unaudited)
 ASSETS
 Current assets:
 Cash and marketable securities $ 10,156 $ 40,751
 Accounts receivable, net $ 41,021 $ 27,287
 Inventories $ 19,002 $ 15,030
 Other current assets $ 3,971 $ 1,166
 Total current assets $ 74,150 $ 84,234
 Marketable securities $ 80,185 $ 61,428
 Deferred taxes, net $ 6,594 $ 0
 Property and equipment, net $ 16,321 $ 15,002
 Capitalized software costs, net $ 5,334 $ 3,136
 Other assets $ 3,841 $ 1,913
 Total assets $186,425 $165,713
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Notes Payable $ 3,576 $ 4,029
 Accounts payable $ 9,962 $ 6,024
 Accrued expenses $ 13,661 $ 9,975
 Current portion of
 capital leases $ 4,599 $ 3,614
 Deferred revenue $ 7,096 $ 5,258
 Total current liabilities $ 38,894 $ 28,900
 Capital lease obligations $ 2,384 $ 4,685
 Total Liabilities $ 41,278 $ 33,585
 Total Stockholders' Equity $145,147 $132,128
 Total Liabilities and
 Stockholders' Equity $186,425 $165,713
 -0- 10/20/93
 /CONTACT: Joan Nevins of PictureTel Corporation 508-762-5208; or Pam Austin of Rourke & Company, 617-267-0042, x310, for PictureTel Corporation/
 (PCTL)


CO: PictureTel Corporation ST: Massachusetts IN: TLS SU: ERN

DD -- NE014 -- 4761 10/20/93 16:27 EDT
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Date:Oct 20, 1993
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