ATLANTA, May 15 /PRNewswire/ -- Preferred Networks, Inc. (Nasdaq: PFNT)
(PNI) today announced results for the three months ended March 31, 1997.
    Total revenues for the first quarter of 1997 increased 243% to
$8.1 million from $2.4 million for the first quarter of 1996.  EBITDA
(earnings before interest, taxes, depreciation and amortization), a standard
measure of operating cash flow in the wireless industry, was negative
$3.0 million for the first quarter of 1997 compared with negative $1.2 million
for the prior-year period.  The net loss for the first quarter of 1997 was
$4.7 million, or $0.30 per share, compared with a loss of $1.5 million, or
$0.19 per share, for the prior-year period.
    Commenting on the results, Chairman and Chief Executive Officer Mark
Dunaway said, "The first quarter was an eventful one as we showed strong
internal growth as well as contribution from recent acquisitions.  The quarter
showed record revenue growth in our network services business, which was
complemented by the significant revenue contributions from our engineering
services business, which we acquired in July 1996, and our product services
business, which we acquired in December 1996.  Our expanded outsourcing
services platform has also enabled us to reduce our operating costs as a
percentage of revenues and has resulted in an increased overall operating
margin."
    At March 31, 1997, PNI was operating in 23 markets with six Technical
Control Centers (TCC's) in operation and was constructing networks in 28 new
markets, including a TCC in Southern California and network expansions into
Boston, Denver, Seattle, San Francisco, Los Angeles, Cleveland, Indianapolis,
and Minneapolis.  There were 393,167 units in service at the end of the first
quarter of 1997, a 121% increase from 178,061 units in service at the end of
the first quarter of 1996.  Other significant events since December 31, 1996
included:

    -- Closing of the pending acquisition of Mercury Paging & Communications,
       Inc., a New York based carrier providing one-way messaging in the New
       York, New Jersey and Southern Connecticut markets, primarily through
       reseller distribution.

    -- Obtaining a commitment for $15 million of preferred stock and warrants
       in a private placement with five institutional investors that are
       currently shareholders of PNI.  The funding provides capital to
       complete PNI's network build-out and fund its operations during this
       period.

    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; 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 share and per share data)

                                  Three months ended March 31,
                                  1997                 1996
    Revenues
      Network services     $2,566      31.6%     $1,299     54.9%
      Product sales         2,933      36.1       1,036     43.8
      Other services        2,617      32.3          33      1.3
      Total revenues        8,116     100.0       2,369    100.0

    Costs of revenues
      Network services      1,908      23.5         742     31.3
      Product sales         3,080      37.9       1,361     57.5
      Other services        2,026      25.0          --       --
      Total costs of
        revenues            7,014      86.4       2,103     88.8

    Gross margin            1,102      13.6         266     11.2

    Selling, general and
       administrative
       expenses             4,092      50.4       1,460     61.6
     Depreciation and
       amortization         1,646      20.3         363     15.3
      Operating loss       (4,636)    (57.1)     (1,557)   (65.7)

    Interest expense          227       2.8         142      6.0
    Interest income           138       1.7         198      8.4
      Net loss            $(4,724)    (58.2)     (1,501)   (63.3)%

    EBITDA                $(2,990)    (36.8)%   $(1,194)   (50.4)%

    Net loss per share
      of Common Stock       $(.30)                 $(.19)

    Weighted average number
      of common shares used
      in calculating net
      loss per share of
      Common Stock     15,860,004             10,858,366

                           PREFERRED NETWORKS, INC.
                   Balance Sheet And Statistical Highlights
                                 (Unaudited)
         (Balance sheet and capital expenditure dollars in thousands)

                                       March 31,  December 31,
                                           1997         1996
    Balance Sheet Data:
     Cash and cash equivalents           $3,050      $21,645
     Current assets                      13,752       30,725
     Property and equipment, net         25,860       21,560
     Total assets                        66,108       66,125
     Long-term debt                      16,192       16,030
     Stockholders' equity                40,946       40,583
     Total liabilities and
       stockholders' equity             $66,108      $66,125

                           PREFERRED NETWORKS, INC.
                                   Three months ended March 31,
                                           1997         1996
    Other Data:
      Capital expenditures               $5,303       $2,410

    Technical Control Centers:
      In operation                            6            3
      Under construction                      1            1

    Markets:
      In service                             23           15
      Under construction                     28           11

    Units in Service:
      Reseller                          295,709      139,194
      Co-location/interconnection        97,458       38,867
        Total units in service          393,167      178,061

    Average Revenue Per Unit              $2.43        $2.59

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