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XIRCOM POSTS 145 PERCENT GAIN IN NET INCOME FOR FISCAL 1992; NET SALES INCREASE 124 PERCENT

 XIRCOM POSTS 145 PERCENT GAIN IN NET INCOME FOR FISCAL 1992;
 NET SALES INCREASE 124 PERCENT
 CALABASAS, Calif., Oct. 26 /PRNewswire/ -- Xircom Inc. (NASDAQ: XIRC) today reported that net income for fiscal 1992, ended Sept. 30, increased 145 percent to $6.1 million, equal to $0.41 per share, compared with $2.5 million, or $0.19 per share, for fiscal 1991. Net sales for the same period increased 124 percent to $59.1 million from $26.3 million for fiscal 1991.
 Xircom President and Chief Executive Officer Dirk I. Gates, credited the continued growth to strong demand for the company's second generation of external local area network (LAN) adapters, which were introduced in fiscal 1992. Gates said, "Xircom enjoys a dominant position in a market that has two dynamics, the growth of portable personal computers (PCs) and the increasing use of portables on networks. We created the external LAN adapter market; and through technological leadership, marketing programs promoting end-user demand, and a high level of customer support and service, we have maintained a 70 percent market share, according to independent industry analysts."
 Net sales for the fourth quarter increased 92 percent to $17.1 million, compared with $8.9 million in the fourth quarter of fiscal 1991. Net income for the fourth quarter of fiscal 1992 increased 74 percent to $1.8 million from $1.0 million in the fourth quarter of fiscal 1991, with net income per share of $0.11 vs. $0.08. Gross profit margins declined in the fourth quarter to 52.4 percent, compared to an average of 54.0 percent for the first nine months of fiscal 1992, primarily due to additional inventory reserves provided for older version products.
 During the fourth quarter, Xircom announced two innovative new products. The Pocket Ethernet Print Server is a pocket-sized server that allows printers to be simply and easily connected anywhere on a network. The second new product, Xircom's CreditCard Ethernet Adapter, is the first in a family of products that will provide LAN connectivity for the newest portable computers that incorporate internal slots for the Personal Computer Memory Card Industry Association (PCMCIA) standard. Gates said, "PCMCIA holds much promise as an industry standard for connecting peripherals through a relatively high performance interface. Xircom now offers users the choice of its traditional parallel port adapter or the CreditCard Adapter."
 Commenting on the outlook for the company, Gates added, "Although fiscal fourth quarter revenue grew 17 percent over third quarter, we don't expect this growth rate to continue in the near term. The industry is beginning a transition to PCMCIA technology which could cause buyer hesitancy in selecting which network adapter best meets their needs. In addition, increased competition in the future could affect selling prices." Gates continued, "As the product technology evolves, we believe Xircom is well-positioned with a range of products to meet users' requirements, whether they be for PCMCIA or parallel port connectivity. We also expect to announce technologically advanced expansions to our networking product line that will begin to contribute in the second half of fiscal 1993."
 The balance sheet at Sept. 30, 1992, reflects cash and investments of $32.7 million. Gates said, "Our financial strength permits us to continue to invest in the development of new products, including those that will offer nomadic networking solutions for the next generations of mobile computers and further differentiate Xircom from its competitors."
 Founded in 1988, Xircom develops and manufactures simple-to-use network connectivity solutions for the portable computer market and has sold more than 300,000 LAN adapters for connecting portable PCs to local area networks.
 XIRCOM INC.
 Condensed Consolidated Income Statements
 (In thousands, except per share information)
 Three months ended Year ended
 Sept. 30, Sept. 30,
 1992 1991 1992 1991
 Net Sales $17,051 $8,877 $59,083 $26,324
 Cost of sales 8,117 3,530 27,440 11,550
 Gross profit 8,934 5,347 31,643 14,774
 Operating expenses:
 Research and
 development 1,341 611 3,908 1,615
 Sales and
 marketing 4,025 2,448 14,817 6,714
 General and
 administrative 963 549 3,391 2,297
 Total operating
 expenses 6,329 3,608 22,116 10,626
 Operating income 2,605 1,739 9,527 4,148
 Other income
 (expense), net 101 (41) 90 (12)
 Income before
 income taxes 2,706 1,698 9,617 4,136
 Provision for
 income taxes 942 683 3,560 1,663
 Net income $1,764 $1,015 $6,057 $2,473
 Shares used in
 computing net
 income per share 16,216 13,451 14,926 13,309
 Net sales 100.0pct 100.0pct 100.0pct 100.0pct
 Gross profit 52.4pct 60.2pct 53.6pct 56.1pct
 Research and
 development
 expenses 7.9pct 6.9pct 6.6pct 6.1pct
 Sales and
 marketing expenses 23.6pct 27.6pct 25.1pct 25.5pct
 General and
 administrative
 expenses 5.6pct 6.2pct 5.7pct 8.7pct
 Operating income 15.3pct 19.6pct 16.1pct 15.8pct
 Net income 10.3pct 11.4pct 10.3pct 9.4pct
 XIRCOM INC.
 Condensed Consolidated Balance Sheets
 (In thousands)
 Sept. 30, Sept. 30,
 1992 1991
 Current assets:
 Cash and short-term
 investments $32,739 ---
 Accounts receivable 10,480 5,692
 Inventories 8,196 5,577
 Other current assets 2,178 756
 Total current assets 53,593 12,025
 Equipment and
 improvements, net 3,124 1,450
 Other assets 326 272
 Total assets $57,043 $13,747
 Current liabilities:
 Notes payable to bank --- $2,200
 Accounts payable 2,856 2,812
 Accrued liabilities 1,519 919
 Current portion of
 long-term obligations 436 278
 Accrued income taxes 1,482 681
 Total current
 liabilities 6,293 6,890
 Long-term obligations 1,181 678
 Stockholders' equity:
 Convertible preferred
 stock-series A --- 26
 Convertible preferred
 stock-series B --- 2,497
 Common Stock 15 ---
 Paid-in capital,
 net of unearned
 stock compensation 39,902 61
 Retained earnings 9,652 3,595
 Total stockholders'
 equity 49,569 6,179
 Total liabilities
 and stockholders'
 equity $57,043 $13,747
 -0- 10/26/92
 /EDITOR'S NOTE: Xircom is a registered trademark of Xircom Inc. CreditCard Ethernet Adapter and Pocket Ethernet Print Server are trademarks of Xircom Inc./
 /CONTACT: JoAnne Martz, director of investor relations of Xircom, 818-878-6220/
 (XIRC) CO: Xircom Inc. ST: California IN: CPR SU: ERN


BP-JL -- LA035 -- 5013 10/26/92 16:23 EST
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