California Microwave FY1997 First Quarter: $.12 Loss On Lower Sales

For Immediate Release - October 16, 1996

CALIFORNIA MICROWAVE FY1997 FIRST QUARTER:
$.12 LOSS ON LOWER SALES

REDWOOD CITY, CALIFORNIA - CALIFORNIA MICROWAVE, INC. (Nasdaq National Market:CMIC) reported today a net loss of $1.9 million, or $.12 per share, on a 10% decrease in sales to $103.7 million for its fiscal year 1997 first quarter ended September 30, 1996. This compares to net income of $5.1 million, or $.31 per share, on sales of $115.8 million reported for last yearís first quarter. New orders booked in the first quarter of fiscal 1997 increased 4% to total $105.1 million compared to $101.4 million booked last year, and a 15% increase compared to the $91.0 million booked in the fourth quarter of fiscal 1996. Backlog at September 30, 1996, stood at $ .8 million, a 22% decrease from last yearís reported $217.2 million.
Lower Sales; Pricing and Capacity Pressures
California Microwave indicated that three factors contributed to the loss for the quarter. First, while new orders increased in the wireless area, they were received too late to be shipped in the quarter, and sales of satellite communications systems were lower than planned. Second, pricing pressures resulted in margin erosion in certain products that were shipped. Lastly, although the companyís first-quarter order rate increased over the prior two quarters, factory over-capacity and associated expense levels put pressure on financial performance.
Orders: Wireless Up 24%; International Up 22%
Wireless communications orders increased 24% to $49.9 million, or 48% of total orders, from $40.1 million in last yearís first quarter. International orders increased 22% to $52.1 million, or 50% of total orders, from $42.8 million last year, and were concentrated in Latin America (33%) and Asia-Pacific (32%).
California Microwave, Inc. is a leader in satellite and wireless communications. It is the number one U.S. supplier of telecommunications satellite earth stations and microwave radios used in wireless communications. The Company operates facilities in seven states and sells into more than 110 countries. Its strategy calls for significant expansion in the wireless area.

CALIFORNIA MICROWAVE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)

Three Months Ended
September 30

1996 1995 % Change

Net Sales $103,692 $115,763 - 10

Cost of products sold 77,109 80,990 - 5

Gross margin 26,583 34,773 - 24

Expenses:

Research and development 7,865 7,166 + 10

Marketing and administration 19,753 18,038 + 10

Amortization of intangible assets 540 547 - 1

Total expenses 28,158 25,751 + 9

Operating income (loss) (1,575) 9,022 NM

Interest expense net (1,352) (1,043) +30

Income (loss) before income taxes (2,927) 7,979 NM

Provision for (benefit from) income taxes (1,054) 2,872 NM

Net income (loss) $(1,873) $5,107 NM

Net income (loss) per share $ ( 0.12) $.31 NM

Average shares and equivalents (thousands) 16,133 16,331 - 1

Bookings $105,066 $101,392 + 4

Backlog 169,823 217,175 -22

CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)

September 30
1996
June 30
1996

Current Assets:

Cash and cash equivalents $4,224 $4,560

Receivables 94,382 108,278

Inventories 106,737 103,456

Other current assets 14,835 14,205

Total current assets 220,178 230,499

Property, plant and equipment (net) 48,626 48,762

Intangible and other assets 58,173 59,079

$326,977 $ 338,340

Liabilities and stockholdersí equity

Current liabilities $ 74,947 $ 89,247

Long-term liabilities 82,612 79,233

Stockholders' equity 169,418 169,860

$326,977 $ 338,340

CALIFORNIA MICROWAVE, INC.

Fiscal 1997 First Quarter Bookings and Sales
by Product and Market Areas (in millions)

FY97 Q1 FY96 Q1 % Change % of FY97

BOOKINGS

Wireless $ 49.9 $ 40.1 + 24 48%

SatCom 36.8 38.8 - 5 35%

Intelligence/Other 18.4 22.5 -18 17%

Total $105.1 $101.4 + 4 100%

International $ 52.1 $ 42.8 + 22 50%

US Commercial 27.6 28.6 - 3 26%

US Government 25.4 30.0 -15 24%

Total $105.1 $101.4 + 4 100%

SALES

Wireless $ 44.6 $ 41.5 + 7 43%

SatCom 33.5 56.0 -40 32%

Intelligence/Other 25.6 18.3 +40 25%

Total $103.7 $115.8 -10 100%

International $ 42.9 $ 61.7 -30 42%

US Commercial 32.5 30.9 + 5 31%

US Government 28.3 23.2 +22 27%

Total $103.7 $115.8 -10 100%

For More Information Contact:

Stephanie M. Day
Vice President
Corporate Communications
(415) 596-6629 Investor Information Line:
(Toll-free) 1-888-225-6789
http://www.calmike.com.
Deborah Passik
William Dunk Partners, Inc.
(214) 960-9611

CONTACT US WHAT'S NEW? ABOUT THE COMPANY INVESTOR RELATIONS NEWS RELEASES
PRODUCTS APPLICATIONS LOCATIONS TRADE SHOWS & EVENTS
©1996 California Microwave, Inc. All rights reserved webmaster@calmike.com

	Three Months Ended September 30
	1996	1995	% Change
Net Sales	$103,692	$115,763	- 10
Cost of products sold	77,109	80,990	- 5
Gross margin	26,583	34,773	- 24
Expenses:
Research and development	7,865	7,166	+ 10
Marketing and administration	19,753	18,038	+ 10
Amortization of intangible assets	540	547	- 1
Total expenses	28,158	25,751	+ 9
Operating income (loss)	(1,575)	9,022	NM
Interest expense net	(1,352)	(1,043)	+30
Income (loss) before income taxes	(2,927)	7,979	NM
Provision for (benefit from) income taxes	(1,054)	2,872	NM
Net income (loss)	$(1,873)	$5,107	NM

Net income (loss) per share	$ ( 0.12)	$.31	NM

Average shares and equivalents (thousands)	16,133	16,331	- 1
Bookings	$105,066	$101,392	+ 4
Backlog	169,823	217,175	-22

	September 30 1996	June 30 1996
Current Assets:
Cash and cash equivalents	$4,224	$4,560
Receivables	94,382	108,278
Inventories	106,737	103,456
Other current assets	14,835	14,205
Total current assets	220,178	230,499

Property, plant and equipment (net)	48,626	48,762
Intangible and other assets	58,173	59,079
	$326,977	$ 338,340


Liabilities and stockholdersí equity
Current liabilities	$ 74,947	$ 89,247
Long-term liabilities	82,612	79,233
Stockholders' equity	169,418	169,860
	$326,977	$ 338,340

	FY97 Q1	FY96 Q1	% Change	% of FY97
BOOKINGS
Wireless	$ 49.9	$ 40.1	+ 24	48%
SatCom	36.8	38.8	- 5	35%
Intelligence/Other	18.4	22.5	-18	17%
Total	$105.1	$101.4	+ 4	100%

International	$ 52.1	$ 42.8	+ 22	50%
US Commercial	27.6	28.6	- 3	26%
US Government	25.4	30.0	-15	24%
Total	$105.1	$101.4	+ 4	100%

SALES
Wireless	$ 44.6	$ 41.5	+ 7	43%
SatCom	33.5	56.0	-40	32%
Intelligence/Other	25.6	18.3	+40	25%
Total	$103.7	$115.8	-10	100%

International	$ 42.9	$ 61.7	-30	42%
US Commercial	32.5	30.9	+ 5	31%
US Government	28.3	23.2	+22	27%
Total	$103.7	$115.8	-10	100%