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PINNACLE MICRO INC. REPORTS RECORD NET SALES AND PROFITS FOR THIRD QUARTER AND NINE MONTHS

 IRVINE, Calif., Oct. 25 /PRNewswire/ -- Pinnacle Micro Inc. (NASDAQ: PNCL) today reported record results for the third quarter and nine months ended Sept. 30, 1993. Net sales for the three month period increased 56 percent to $10,112,300, up from $6,481,300 reported in the third quarter of 1992. Operating income increased to $787,400 during the third quarter of 1993 versus operating income of $557,600 in last year's third quarter. Pro forma net income was $550,400, or $0.11 per share, for the third quarter of 1993, as compared to pro forma net income of $338,800, or $0.09 per share, in the third quarter of 1992. Average weighted shares outstanding during the third quarter of 1993 were 5,216,400 versus 3,881,800 during the same period last year. The company completed its initial public offering of 1.8 million shares of common stock, underwritten by Prudential Securities Inc. on July 1, 1993. Effective July 1, 1993, the company converted from an S Corporation to a C Corporation. The pro forma data reflect provisions for federal and state income taxes as if the company were treated as a C Corporation.
 Net sales for the nine month period ended Sept. 30, 1993, increased 85 percent to $27,963,400, up from $15,111,400 reported in the first nine months of 1992. Operating income was $2,026,100 during the nine month period of 1993 versus operating income of $536,500 in last year's first nine months. Pro forma net income was $1,272,100, or $0.29 per share, for the nine month period, as compared to pro forma net income of $323,000, or $0.08 per share, in the nine month period of 1992.
 "We are pleased to report these strong third quarter results and continue to see increases in demand for most product families both domestically and internationally," said William F. Blum, president and chief executive officer. "The company recently announced the Sierra 1.3 gigabyte (GB) optical drive which the company believes is the next generation of Pinnacle Micro optical systems that will expand the applications and demand for optical technology."
 Pinnacle Micro is a leading designer, manufacturer and supplier of optical storage systems for data intensive applications such as network storage, imaging, desktop publishing and pre-press, as well as the emerging applications such as digital audio/video editing and commercial multimedia. Founded in 1987, the company is headquartered in Irvine with offices in North America, Europe, and the Pacific Rim.
 PINNACLE MICRO INC.
 Condensed Statements of Income
 (Unaudited)
 (In thousands except per share data)
 Three months ended Nine months ended
 Sept. 30 Sept. 30
 1993 1992 1993 1992
 Net sales $10,112.3 $6,481.3 $27,963.4 $15,111.4
 Cost of sales 6,691.8 4,326.1 18,511.2 10,305.5
 Gross profit 3,420.5 2,155.2 9,452.2 4,805.9
 Operating expenses:
 Selling, general and
 administrative 2,175.9 1,292.9 6,234.3 3,455.4
 Research and
 development 457.2 304.7 1,191.8 814.0
 Total operating
 expenses 2,633.1 1,597.6 7,426.1 4,269.4
 Operating income 787.4 557.6 2,026.1 536.5
 Interest income
 (expense) 60.7 (23.8) 17.3 (26.7)
 Income before
 income taxes 848.1 533.8 2,043.4 509.8
 Income taxes 19.3 16.0 49.1 15.0
 Net income $828.8 $517.8 $1,994.3 $494.8
 Pro forma data:
 Historical income
 before income taxes $848.1 $533.8 $2,043.4 $509.8
 Pro forma provision
 for income taxes 297.7 195.0 771.3 186.8
 Pro forma net income $550.4 $338.8 $1,272.1 $323.0
 Pro forma net income
 per share $0.11 $0.09 $0.29 $0.08
 Weighted average common
 shares outstanding 5,216.4 3,881.8 4,359.5 3,881.8
 PINNACLE MICRO INC.
 Condensed Balance Sheets
 (In thousands)
 Sept. 30, 1993 Dec. 31, 1992
 (unaudited)
 ASSETS
 Current assets:
 Cash and cash equivalents $10,136.7 $ 475.2
 Accounts receivable, net 5,900.2 3,899.0
 Inventories 3,678.7 1,732.2
 Prepaid expenses and
 other current assets 572.2 344.4
 Deferred income taxes 351.2
 Total current assets 20,639.0 6,450.8
 Furniture and equipment, net 835.2 716.1
 Other assets 116.2 130.4
 Total assets $21,590.4 $7,297.3
 LIABILITIES AND STOCKHOLDERS'
 EQUITY
 Current liabilities:
 Accounts payable $4,840.7 $3,808.6
 Accrued expenses 452.9 112.6
 Payroll related liabilities 181.8 114.9
 Current portion of notes
 payable to bank and
 long-term debt 14.2 61.1
 Total current liabilities 5,489.6 4,097.2
 Notes payable to bank and
 long-term debt, less
 current portion 14.7 179.1
 Stockholders' equity:
 Preferred stock, $.001 par value:
 Authorized shares - 5,000,000
 Issued and outstanding - none
 Common stock, $.001 par value:
 Authorized shares - 30,000,000
 Issued and outstanding shares
 3,441,000 at Dec. 31, 1992
 and 5,145,784 at Sept. 30,
 1993 5.1 3.4
 Additional paid-in capital 15,248.0 59.6
 Retained earnings 833.0 2,958.0
 Total stockholders' equity 16,086.1 3,021.0
 Total liabilities and
 stockholders' equity $21,590.4 $7,297.3
 -0- 10/25/93
 /CONTACT: Doug Sherk or Miriam Adler, 415-296-7383; or David Walke or Jill Moskowitz, 212-850-5600, all of Morgen-Walke for Pinnacle Micro/
 (PNCL)


CO: Pinnacle Micro Inc. ST: California IN: CPR SU: ERN

LW-TM -- SF006 -- 6063 10/25/93 06:31 EDT
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Date:Oct 25, 1993
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