ATLANTA, Aug. 14 /PRNewswire/ -- Preferred Networks, Inc. (Nasdaq: PFNT)
(PNI) today announced results for the second quarter and six months ended June
30, 1996.
    Total revenues for the second quarter increased 51% to a record
$2.5 million from $1.7 million for the second quarter of 1995.  PNI added
37,645 pagers in service during the quarter for a total of 215,706, a
152% increase from 85,703 at June 30, 1995.  The total units added in the
second quarter of 1996 included 27,205 that are part of the previously
announced agreement to acquire Big Apple Paging Corporation.  EBITDA (earnings
before interest, taxes, depreciation and amortization), a standard measure of
operating cash flow, was negative $1.4 million for the quarter compared with
negative $298,500 for the same quarter last year.  The net loss for the second
quarter was $1.5 million, or $.10 per share, compared with $522,000, or
$.06 per share, for the prior-year period.
    For the six months ended June 30, 1996, total revenues increased 63% to a
record $4.9 million from $3.0 million for the first half of 1995.  There was a
negative EBITDA for the six months ended June 30, 1996, of $2.6 million
compared with a negative EBITDA of $582,500 for the first half of 1995.  The
net loss for the six months was $3.0 million, or $.28 per share, compared with
$1.0 million, or $.12 per share, for the year-earlier period.
    Commenting on the results, Chairman and Chief Executive Officer Mark
Dunaway said, "We continued to build out our network during the second quarter
and completed out third Technical Control Center (TCC), located in
Poughkeepsie, New York, which supports service in Boston and New York City.
The completion of a nationwide network is our top priority and the most
significant measure of our growth.  We have 18 new markets under construction.
    "The growth in revenues from the 1995 to the 1996 second quarters reflects
the growth in units in service, which included new reseller agreements,
expansion into new markets and continued growth in existing markets.  There
has been significant pricing pressure in some of our markets which affected
our growth in units in the second quarter of 1996.  We are implementing a
number of new marketing initiatives to try to counteract the pricing pressure
and we are continuing the expansion of our network into new markets."
    Since the end of the quarter, PNI completed construction of a TCC in
Chicago, and is in the process of completing a TCC in Detroit.
    The Company also recently announced that it has entered into a $20 million
revolving credit facility with NationsBank which will be used for financing
paging network acquisitions and capital expenditures.
    "Our plans are to complete a nationwide network within two years," Dunaway
added. "As a result of the Federal Communications Commission (FCC) freeze on
paging licenses applications we have had to alter our build out strategy to
protect our licensing position.  This has created a delay in providing service
to some of our markets."
    PNI provides high-quality, reliable wholesale paging network services.  As
a carrier's carrier, PNI markets its networks to traditional resellers of
paging services and to other carriers and resellers that have their own
switching terminals and connect to PNI's switching centers.  PNI's strategy is
complemented by its centralized network architecture and use of a low-cost,
high-power paging frequency for which it is licensed or has licenses pending
nationwide.

                       PREFERRED NETWORKS, INC.
                        FINANCIAL HIGHLIGHTS
                            (UNAUDITED)
            (dollars in thousands, except per share data)

                                Three Months Ended        Six Months Ended
                                      June 30                  June 30,
                                  1996       1995          1996        1995
       Revenues
    Pager air time           $     1,445  $     744   $     2,744  $    1,393
    Pager sales                    1,050        861         2,086       1,523
    Maintenance and other            ---         46            33          68
    Total revenue                  2,495      1,651         4,863       2,984
       Cost of revenues
    Pager air time                   947        342         1,688         654
    Pager sales                    1,308      1,052         2,669       1,884
    Total                            240        257           506         446
    Selling general and admin.     1,680        556         3,140       1,028
    Depreciation and amortization    399        148           763         294
    Operating loss                (1,839)      (447)       (3,397)       (876)
    Interest expense                  13         77           155         155
    Interest income                  374          2           573           2
    Net loss                 $    (1,478) $    (522)  $    (2,979) $   (1,029)
    Historical net loss per
     share of common stock   $      (.10) $    (.06)  $      (.28) $     (.12)
    Weighted average common
     shares outstanding used
     in calculating historical
     net loss per share       14,417,732  9,237,071    12,679,831   9,197,740
    EBITDA*                  $    (1,440) $    (299)  $    (2,634) $     (582)

    *Earnings before interest, taxes, depreciation and amortization.

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