BOCA RATON, Fla.--(BUSINESS WIRE)--Oct. 21, 1999--Boca Research,
Inc.(R) (NASDAQ:BOCI) today announced results for the third quarter
ended September 30, 1999. The Company reported net sales of $7.7
million and a net loss of $4.8 million, or $0.45 per share, compared
to net sales of $22.8 million and a net loss of $2.0 million, or $0.23
per share, in the third quarter of 1998.
    For the nine months ended September 30, 1999, the Company
reported net sales of $27.2 million and a net loss of $13.5 million,
or $1.39 per share, compared to net sales of $51.6 million and a net
loss of $14.8 million, or $1.69 per share, in the year ago period.
    The transition of the business to a software/systems
solutions-based enterprise continues. However, revenue in the third
quarter continued to be negatively impacted by the decline in sales of
Mac(R)-based modems, which have been a significant source of revenue
for the Company since its mid-1998 acquisition of the modem business
of Global Village Communication, Inc. While the Company continues to
develop new Mac-based products, such as an ADSL modem, recent Apple(R)
marketing decisions, such as the bundling of internal modems, are
expected to continue to negatively impact sales in the quarters ahead.
    Anthony F. Zalenski, Boca Research's president and chief
executive officer, commented, "We continue to make strides to
reposition the Company and diversify our business into products with
significant growth potential, such as information appliances and thin
clients. Until these markets become further developed, however, we
continue to focus on cost cutting in our data communication
operations, which includes our modem business. Recent initiatives
include selling two manufacturing lines, reducing the number of SKUs,
consolidating our Global Village technical support into our Boca
Raton-based technical support, and redirecting our manpower to
products that show the most promise. These inventory and cost-cutting
efforts helped reduce the net cash outflow in the quarter to well
below the reported loss. The Company continues to maintain an adequate
cash balance and no debt."

Third Quarter Accomplishments
    Mr. Zalenski continued, "In August we unveiled the latest phase
of Boca Research's business transformation that will launch the
Company into the Application Service Provider (ASP) marketplace. Our
new enterprise, AppsCom(TM), Inc., will leverage the Company's
communications expertise, its brands, and its state-of-the-art
Internet appliance business to help it become a leading provider of
packaged applications delivered via server-based computing. Through
licensing agreements with key technology partners, AppsCom's long-term
goal is to function as a clearinghouse for the rental of software
applications. This is a logical progression of our efforts to
reposition Boca Research in high-growth markets primarily serving the
small and medium enterprise and education markets."
    Mr. Zalenski added, "During the quarter, we entered into an
agreement with NetWolves Corporation, an Internet systems provider
known for its FoxBox technology that solves security issues for
commercial Internet users. The agreement specifies that Boca Research
will design, manufacturer and distribute Internet communications
gateways and thin clients for NetWolves; an initial order was placed
for 2000 thin client devices.
    "In September we formed a strategic alliance with The
LearningStation.com(TM), which selected our BocaVision(TM) thin client
device, based on Infomatec AG's Java(TM) Network Technology(TM) (JNT)
operating system, as the `device of choice' for their Smart Classroom
online educational service. As a result, over 5,000 of these devices
are being included in proposals at various school districts around the
Americas and the Caribbean," said Mr. Zalenski.
    "Boca Research's financial position continued to improve in the
quarter due to the $5 million investment by National Semiconductor
Corporation. Based on National Semiconductor's desire to expand its
relationship with Boca Research, they purchased 691,085 newly issued
shares at a price of $7.235 per share. Both companies have similar
strategies regarding the information appliance marketplace and are
working together to supply Philips and America Online Inc. with a
set-top box solution for the forthcoming AOL TV(SM) service. We will
continue to invest our capital wisely, primarily targeting the growing
thin client and information appliance markets," said Mr. Zalenski.

Outlook
    "To best capitalize on the emerging thin client, information
appliance, and related software development markets and to remain a
significant player in the data communications market, Boca Research
recently realigned the Company's management team along product lines.
We continue to manage our data communications business for growth,
emphasizing our DSL and I/O product lines while rightsizing our modem
operations, which show less potential over the long term. In the thin
client area, we are developing solutions for the small and medium
enterprise, education, and applications rental markets. Key to our
strategy is our strong technology partners, which include Infomatec
AG, Citrix(R), National Semiconductor(R), Liberate(TM) Technologies,
and Philips. We look forward to working with them in the quarters
ahead as we look to take advantage of the many opportunities in these
growing markets," Mr. Zalenski concluded.
    This release contains forward-looking statements that reflect
management's best judgement, based on factors currently known.
However, these statements involve risks and uncertainties, including
the rate of development of the thin client and information appliance
markets generally, the successful development and market acceptance of
new products, the degree of competition in the market for such
products, competitive pricing practices, the product and channel mix,
component costs, and manufacturing efficiencies. Further, a
significant portion of the Company's sales is derived from a limited
number of customers. Therefore, the loss of one or more customers
could adversely impact operating results. These and other risks are
detailed in Boca Research's annual report on Form 10-K for the year
ended December 31, 1998, as well as in the Company's periodic filings
with the Securities and Exchange Commission (SEC). Such risks and
uncertainties could cause actual results to differ materially from
those in the forward-looking statements included in this release.