STOCKREPORTS		 Micronics Computers, Inc. NASDAQ Symbol MCRN
21-JUN-97 Industry:
Computers (Peripherals)		 Summary: This company supplies high-performance system boards and multimedia peripherals for personal computers.

Recent Price 2.81
52 Wk Range 3.44 - 1.88		 Yield Nil
12-Mo. P/E NM

Quantitative Evaluation:
Outlook (1 Lowest - 5 Highest)
NA
Fair Value
NA
Risk
HIGH
Earn/Div Rank
NR
Technical Evaluation:
BULLISH since 05/97
Rel. Strength Rank (1 Lowest - 99 Highest)
38
Insider Activity
NA

Business Profile 02-MAY-97

Revenues were restricted in FY 96 (Sep.) and in the first half of FY 97 by increased price competition and a product transition-induced slowdown that resulted in lower shipments to the OEM channel. Results were also hurt by weakness in government sales. The company is focused on introducing new products and carefully managing its balance sheet. Expenditures in sales and marketinghave increased to expand its customer base in distribution and international sales channels. During the second quarter, MCRN introduced three new Intel 430TX-based motherboards and began shipping four server products incorporating Pentium technology, and the M7S-Hi motherboard, which supports Intel's Pentium processor with MMX technology.

Operation Review 02-MAY-97

Net sales in the six months ended March 31, 1997, fell 40%, year to year, reflecting lower sales to OEM and government markets and product introduction delays related to supplier inability to provide component parts. Gross margins narrowed slightly, and following a 27% decline in R&D expenditures and 5.3% lower SG&A costs, an operating loss contrasted with operating income. After net interest and other income, which contrasted with net interest and other expense, and no tax expense in the current period, versus taxes at 40.9%, a net loss of $2,490,000 ($0.18 a share, based on 1.4% more shares) was incurred, in contrast to income of $13,000 (nil).

Stock Performance 20-JUN-97n

In the past 30 trading days, MCRN's shares have declined 4%, compared to a 9% rise in the S&P 500. Average trading volume for the past five days was 104,160 shares, compared with the 40-day moving average of 152,087 shares.

Key Stock Statistics

Dividend Rate/Share Nil
Shs. outstg. (M) 14.1
Avg. daily vol. (M) 0.189
Tang. Bk. Value/Share 3.17
Beta 0.88
Shareholders 400
Market cap. (B) $0.040
Inst. holdings 27%
Value of $10,000 invested 5 years ago:$ 3,408

Fiscal Year Ending Sep. 30

Revenue (Million $)
1997 1996 1995 1994 1993 1992
Q1 36.19 60.22 58.81 45.21 42.30 38.00
Q2 24.28 40.65 53.58 36.05 50.18 40.90
Q3 NA 29.78 53.84 36.36 47.17 41.10
Q4 NA 40.60 67.85 46.02 42.53 35.00
Year NA 171.3 234.1 163.6 182.2 155.0

Earning Per Share ($)
1997 1996 1995 1994 1993 1992
Q1 0.01 0.07 0.10 0.13 0.18 0.26
Q2 -0.19 -0.07 0.01 0.03 0.28 0.21
Q3 NA -0.14 -1.11 -0.02 0.24 0.15
Q4 NA -0.82 0.06 0.06 0.20 0.12
Year NA -0.96 -0.95 0.20 0.90 0.74

Dividend Data: No cash dividends have been paid, and the company intends to retain earnings for use in the development of its business. Micronics is prohibited from paying dividends without the prior consent of its bank.

Business Summary 02-MAY-97

Micronics Computers, Inc. supplies high-performance system boards that contain microprocessor and supporting logic circuitry and memory components that form the core of a personal computer, for high-performance personal computers sold by original equipment manufacturers (OEMs), distributors and value-added resellers (VARs).

The company specializes in the design, manufacture and marketing of system boards based on the Intel Pentium and Pentium Pro microprocessors. Its Pentium system boards let customers choose the CPU, clock speed, memory configuration, bus architecture and form factor best suited to their specific needs. All boards are compatible with major operating systems, including MS-DOS, IBM OS/2, UNIX, Microsoft Windows 3.1, 95 and NT, and Novell Netware.

Orchid Technology (acquired in August 1994) produces a wide range of multimedia products. Products are sold under the Kelvin, Fahrenheit and Righteous brand names. Orchid develops new technologies for add-in peripheral products before they become standard features on a system board. This strategy provides a low risk approach to building computer systems and offers premium prices by being the first to market. The latest product is the Righteous 3D add-in card, introduced in September 1996, which provides arcade level 3D graphics and is targeted at the PC gaming audience. The company plans to introduce other products in the Righteous 3D family, but as this is a relatively new market segment, Micronics is uncertain whether it will succeed in this endeavor.

The Nucleus family of products consists of a system board, power supply and case (either desktop or tower), which provides customers with reduced time to market and fewer staffing requirements necessary to source these items separately. The company recently announced a Server Technology division, which will expand on the Nucleus product line by offering server technology and barebone (system board, power supply and case) server products.

MCRN believes that its ability to respond quickly to market demands, technological advances and changes in industry standards is critical in taking advantage of the initial market for new products and remaining price-competitive as product prices decrease over time. R&D spending came to 4.3% of revenues in FY 96 (Sep.), versus 3.1% in FY 95 and 3.9% in FY 94.

In FY 96 and FY 95, OEMs accounted for 57% and 51% of net sales, respectively; distributors and VARs for 35% and 40%; and other customers for 8% and 9%. Micron Electronics, Inc., EDS and IBM combined for about 71% of net sales in FY 96. International sales, handled by a direct sales force, sales agents and distributors, accounted for 18% of total net sales in FY 96, down from 27% in FY 95.

Capitalization

Long Term Debt: None (3/97).

Per Share Data ($)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Tangible Bk. Val. 3.17 4.14 5.15 5.11 4.24 3.45 1.65 0.50 NA NA
Cash Flow -0.84 -0.77 0.29 0.96 0.79 1.09 0.54 0.21 0.10 NA
Earnings -0.96 -0.95 0.20 0.90 0.74 1.05 0.51 0.20 0.10 0.02
Dividends Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Payout Ratio Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Prices - High 4 1/4 5 7/8 6 1/8 7 1/2 8 3/4 9 3/4 NA NA NA NA
- Low 1 9/16 3 1/4 3 1/2 4 3/8 2 7/8 6 NA NA NA NA
P/E Ratio - High NM NM 31 8 12 9 NA NA NA NA
- Low NM NM 17 5 4 6 NA NA NA NA

Income Statement Analysis (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Revs. 171 234 164 182 155 134 82.0 36.0 26.0 4.0
Oper. Inc. -2.0 -5.2 3.3 16.3 15.0 14.8 6.0 1.9 0.9 NA
Depr. 1.7 2.4 1.1 0.8 0.6 0.4 0.2 0.1 0.0 NA
Int. Exp. 0.3 0.8 0.0 0.0 0.1 0.1 0.1 0.1 0.0 Nil
Pretax Inc. -5.4 -20.1 3.6 16.2 12.6 15.6 6.9 2.3 1.2 0.3
Eff. Tax Rate NM NM 36% 37% 35% 40% 37% 31% 33% 34%
Net Inc. -13.3 -12.8 2.3 10.1 8.2 9.4 4.3 1.6 0.8 0.2

Balance Sheet & Other Fin. Data (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Cash 21.4 4.6 20.5 23.7 26.8 20.8 2.9 0.1 NA NA
Curr. Assets 55.7 83.3 84.1 74.2 53.7 51.9 19.7 8.3 NA NA
Total Assets 61.8 93.3 93.7 76.6 56.4 54.2 21.1 9.1 4.9 1.6
Curr. Liab. 18.0 35.7 22.5 18.9 10.2 17.3 8.0 5.8 NA NA
LT Debt Nil 0.4 3.3 Nil Nil 0.1 0.1 0.1 0.1 Nil
Common Eqty. 43.9 56.6 67.9 57.6 45.5 35.9 12.8 3.2 1.3 0.5
Total Cap. 43.9 57.7 71.2 57.7 46.2 36.9 13.1 3.3 1.4 0.5
Cap. Exp. 0.5 1.2 1.0 0.5 1.0 1.1 0.8 0.1 0.2 NA
Cash Flow -11.6 -10.4 3.4 10.9 8.7 9.8 4.6 1.7 0.8 NA

Curr. Ratio 3.1 2.3 3.7 3.9 5.3 3.0 2.5 1.4 NA NA
% LT Debt of Cap. Nil 0.7 4.6 Nil Nil 0.1 0.8 3.6 4.3 Nil
% Net Inc.of Revs. NM NM 1.4 5.6 5.3 7.0 5.3 4.4 3.0 4.4
% Ret. on Assets NM NM 2.5 14.9 14.6 22.7 28.8 22.4 23.8 NA
% Ret. on Equity NM NM 3.4 19.2 19.8 35.3 54.3 70.1 84.7 NA

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--221 Warren Avenue, Fremont, CA 94539-7085. Tel--(510) 651-2300. Fax--(510) 651-5612. Website--http://www.micronics.com Chrmn--S. P. Kitrosser. Pres & CEO--S. Munshani. VP-Fin & CFO--B. Finley. Dirs--S. P. Kitrosser, S. Munshani, W. Shelander. Transfer Agent--ChaseMellon Shareholder Services, San Francisco. Incorporated--in California in 1986. Empl-- 229. S&P Analyst: Ted Groesbeck


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