ATLANTA, Nov. 12 /PRNewswire/ -- Preferred Networks, Inc.,
(Nasdaq: PFNT) (PNI), an outsourcing services provider to the wireless
industry, today announced results for the three months and nine months ended
September 30, 1997.
    Total revenues for the third quarter increased 175% to $8.6 million from
$3.1 million for the third quarter of 1996.  EBITDA (earnings before interest,
taxes, depreciation and amortization), a standard measure of operating
cashflow in the wireless industry, was negative $3.0 million compared with
negative $2.2 million for the prior-year period.  The net loss for the third
quarter of 1997 was $5.0 million, or $0.34 per share, compared with a loss of
$2.5 million, or $0.17 per share for the prior-year period.
    Total revenues for the nine months ended September 30, 1997 increased 229%
to $26.3 million from $8.0 million for the nine months ended
September 30, 1996.  EBITDA was negative $8.9 million compared with negative
$4.8 million for the prior-year period. The net loss for the nine months ended
September 30, 1997 was $14.8 million, or $0.96 per share, compared with a loss
of $5.5 million, or $0.46 per share for the prior-year period.
    Commenting on the results for the third quarter, Chairman and Chief
Executive Officer Mark H. Dunaway said, "We are very excited about the large
customer relationships developed during the third quarter and the resulting
revenue prospects as we approach 1998.  Our expanded outsourcing services and
sophisticated technical platforms have enabled us to increasingly serve
significant companies and support their one-way and two-way wireless
applications.  The third quarter also showed a significant reduction in
capital expended for expansion and we are excited about the critical mass we
have achieved and our ability to generate financial returns from our
historical investments."
    At September 30, 1997, PNI's network services business was operating in
27 markets with six Technical Control Centers, up from 23 markets at
June 30, 1997.  At September 30, 1997, PNI's network services business had
457,627 units in service, a 46% increase in units from 313,270 units in
service at the end of the third quarter in 1996.
    Preferred Networks, Inc., headquartered in metropolitan Atlanta, provides
outsourcing solutions to the wireless industry which allow companies to offer
branded wireless services directly to subscribers, while relying on PNI to
provide high-quality network, technical, and product services.  PNI offers its
services through its wholesale paging networks as one of the largest carrier's
carriers in the U.S., and through its wholly owned subsidiaries: Preferred
Technical Services, Inc., a provider of paging network equipment installation,
maintenance and engineering services; and EPS Wireless, Inc., a national
provider of paging and cellular product repair services, sales of new, used
and refurbished paging and cellular products and inventory management
services.  PNI's address on the World Wide Web is: http://www.pni.net .

    Safe Harbor Statement Under the Private Securities Litigation Reform Act
    of 1995:
    The statements contained in this release which are not historical facts,
such as those concerning future financial performance and growth, are
forward-looking statements that are subject to risks and uncertainties,
including those identified in the Company's 1996 Annual Report on Form 10-K
and actual results could differ materially from those anticipated in the
forward-looking statements.

                           PREFERRED NETWORKS, INC.
                             Financial Highlights
                                 (Unaudited)
                (dollars in thousands, except per share data)

                               Three months ended September 30,
                                     1997                   1996
    Revenues
      Network services       $ 3,268      37.9%     $ 1,554      49.5%
      Product sales            3,117      36.1        1,239      39.5
      Other services           2,238      26.0          343      11.0
        Total revenues         8,623     100.0        3,136     100.0

    Costs of revenues
      Network services         2,030      23.5        1,210      38.6
      Product sales            3,201      37.1        1,651      52.7
      Other services           2,413      28.0          119       3.8
         Total cost
            of revenues        7,644      88.6        2,981      95.1
     Gross margin                979      11.4          155       4.9

    Selling, general and
      administrative
      expenses                 3,961      45.9        2,322      74.0
    Depreciation and
      amortization             1,846      21.4          636      20.3
    Other expenses(A)             --        --           --        --
      Operating loss          (4,828)    (56.0)      (2,802)    (89.4)
    Interest expense            (323)     (3.7)         (39)     (1.3)
    Interest income              136       1.6          334      1O.7
      Net loss               $(5,015)    (58.1)%    $(2,508)    (80.0)%

    EBITDA                   $(2,982)    (34.6)%    $(2,167)    (69.1)%

    Net loss per share
      of Common Stock          $(.34)       --        $(.17)       --

    Weighted average number of
      common shares used in
      calculating net loss
      per share of Common
      Stock               16,194,512        --    14,479,226       --


                           PREFERRED NETWORKS, INC.
                             Financial Highlights
                                 (Unaudited)
                (dollars in thousands, except per share data)

                               Nine months ended September 30,
                                     1997                   1996
    Revenues
      Network services       $ 9,085      34.5%     $ 4,298      53.7%
      Product sales            9,523      36.2        3,325      41.6
      Other services           7,721      29.3          376       4.7
        Total revenues        26,329     100.0        7,999     100.0

    Costs of revenues
      Network services         6,134      23.3        2,898      36.2
      Product sales            9,840      37.4        4,320      54.0
      Other services           6,798      25.8          119       1.5
         Total cost
            of revenues       22,771      86.5        7,338      91.7
     Gross margin              3,557      13.5          662       8.3

    Selling, general and
      administrative
      expenses                12,182      46.3        5,462      68.3
    Depreciation and
      amortization             5,296      20.1        1,398      17.5
    Other expenses(A)            278       1.1           --        --
      Operating loss         (14,198)    (53.9)      (6,199)    (77.5)
    Interest expense            (929)     (3.5)        (194)     (2.4)
    Interest income              354       1.3          907      11.3
      Net loss              $(14,773)    (56.1)%    $(5,486)    (68.6)%

    EBITDA                   $(8,903)    (33.8)%    $(4,800)    (60.0)%

    Net loss per share
      of Common Stock          $(.96)       --        $(.46)       --

    Weighted average number of
      common shares used in
      calculating net loss
      per share of Common
      Stock               16,067,527        --      13,251,775     --

    (A) Other expenses includes $278,000 in charges that reflect certain
        non-recurring severance expenses associated with cost reduction
        measures primarily in the area of SG&A.

                           PREFERRED NETWORKS, INC.
                                Balance Sheet
                                 (Unaudited)
                            (dollars in thousands)


    Balance Sheet Data:
                                Sept. 30, 1997    Dec. 31, 1996

    Cash and cash equivalents          $10,111          $21,645
    Total current assets                19,145           30,725
    Property and equipment, net         26,622           21,560
    Total assets                        71,887           66,125
    Total debt                          19,604           17,025
    Stockholders' equity                32,615           40,583
    Total liabilities and
       stockholders' equity             71,887           66,125

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