Fourth Quarter Revenues Increase 127%

    ATLANTA, Feb. 19 /PRNewswire/ -- Preferred Networks, Inc. (Nasdaq: PFNT)
(PNI), a leading provider of outsourcing services and network operations for
the wireless industry, today announced results for the fourth quarter and year
ended December 31, 1996.
    Total revenues for the fourth quarter of 1996 increased 127% to
$5.4 million from $2.4 million for the fourth quarter of 1995.  EBITDA
(earnings before interest, taxes, depreciation and amortization), a standard
measure of operating cash flow in the wireless industry, was negative
$3.8 million for the quarter compared with negative $948,000 for the prior-
year period.  The net loss for the quarter was $4.7 million, or $0.32 per
share, compared with a loss of $1.2 million, or $0.23 per share, for the
fourth quarter of 1995.
    For the year ended December 31, 1996, total revenues increased 82% to a
record $13.4 million from $7.4 million for 1995.  1996 EBITDA was negative
$8.6 million compared with a negative $2.2 million for 1995.  The net loss for
1996 was $10.2 million, or $0.79 per share, compared with a loss of
$2.9 million, or $O.48 per share, for 1995.
    At December 31, 1996, PNI had five of its planned ten Technical Control
Centers (TCCs) in operation with three under construction.  At year-end, the
Company had networks in operation in 21 markets with networks under
construction in an additional 28 markets.  There were 362,481 units in service
or under agency agreement at year-end, a 136% increase from 153,901 units in
service at year-end 1995.
    Commenting on the results, Chairman and Chief Executive Officer Mark
Dunaway said, "In 1996, we made great progress toward building networks
nationwide utilizing the 157.740 MHz channel, and broadened the scope of our
carrier's carrier strategy from being purely an operator of wholesale one-way
paging networks to providing outsourcing services for the wireless industry,
including engineering and maintenance of networks and systems equipment, and
repair and fulfillment services for paging and cellular companies.
    "The strong growth in revenues for both the fourth quarter and year
reflects, among other things, the continued expansion of our networks into key
new markets, a ramp-up of service in existing markets and the contribution of
Preferred Technical Services and EPS Wireless.  As expected, we reported
negative EBITDA and a net loss for the year, reflecting, among other things,
the significant investment we are making in networks, systems and personnel to
complete the build-out of our networks nationwide and TCCs."

    Strategic acquisitions in 1996 included:
    -- Paging Services Inc. (now Preferred Technical Services, Inc. -- "PTS"),
       which expanded PNI's services to include repair, maintenance,
       installation services, and equipment sales to paging and PCS carriers.

    -- Big Apple Paging Corporation, which increased PNI's presence in
       New York, New Jersey, and Connecticut.
    -- Mercury Paging & Communications, Inc., a carrier in the New Jersey,
       New York, and Southern Connecticut markets.  (The definitive agreement
       was executed in September 1996, and the acquisition closed in early
       1997.)

    -- EPS Wireless Inc., which expanded PNI's capabilities to offer wireless
       product repairs, sales of new and refurbished paging and cellular
       products, inventory management, and product fulfillment.

    Other significant events in 1996 included:
    -- Significant increases in our credit facilities to be used primarily for
       financing paging network acquisitions and capital expenditures.

    -- Addition of an industry-renowned director to our board, John J. "Jack"
       Hurley, Vice Chairman of Glenayre Technologies, Inc.

    "With the expansion of our core business and the strategic alliances that
we have developed, such as with Teletouch and Metrocall, we are creating a
truly unique organization to serve the wireless industry and provide added
value to our customers.  In 1997, we expect to see the incremental benefit of
PTS and EPS to our core network business.  We also expect continued growth in
units in service as we ramp up services on our existing network and complete
the build-out of our 157.740 MHz network nationwide."
    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, and through its wholly owned subsidiaries: Preferred Technical
Services, which provides paging network equipment installation, maintenance
and engineering services; and EPS Wireless, which is one of the five largest
repair facilities providing paging and cellular product repair, sales, and
fulfillment services.  PNI's address on the World Wide Web is:
http:\\www.pni.net.

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

                                Three Months Ended      Twelve Months Ended
                                    December 31,           December 31,
                                  1996       1995          1996        1995
       Revenues
    Pager airtime            $     1,823  $   1,173   $     6,121  $    3,549
    Pager sales                    2,493      1,123         5,818       3,651
    Maintenance and other          1,035         60         1,412         153
    Total revenues                 5,351      2,356        13,351       7,353
       Cost of revenues
    Pager airtime                  1,723        616         4,621       1,768
    Pager sales                    4,009      1,363         8,329       4,558
    Other                            542        ---           663         ---
    Total                           (923)       377          (262)      1,027
    Selling, general and admin.    2,876      1,325         8,338       3,180
    Depreciation and amortization  1,081        275         2,479         763
    Operating loss                (4,880)    (1,223)      (11,079)     (2,916)
    Interest expense                  48         85           242         317
    Interest income                  215        143         1,122         363
    Net loss                 $    (4,713) $  (1,165)  $   (10,199) $   (2,870)
    Historical net loss per
     share of common stock   $     (0.32) $   (0.23)  $     (0.79) $    (0.48)
    Weighted average common
     shares outstanding used
     in calculating historical
     net loss per share       14,818,573  9,158,397    13,643,474   9,158,406
    EBITDA*                  $    (3,799) $    (948)  $    (8,600) $   (2,153)

    *Earnings before interest, taxes, depreciation and amortization.


                                  Preferred Networks Inc.
                                   Statistical Highlights

                                     December 31, 1996      December 31, 1995

    Technical Control Centers:
      In operation                          5                       2
      Under construction                    3                       2

    Markets:
      In service                           21                      12
      Under construction                   28                       8

    Units in Service:
      Reseller units                     186,482                  129,983

    Co-location/interconnection units     89,236                   23,918
      Total units in service             275,718                  153,901

    Under agency agreement                86,763                    ---
      Total                              362,481                  153,901

    Average revenue per unit               $2.48                    $2.94

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