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Information Storage Devices Announces
Record Third Quarter Results

Revenues up 54%; Net Income up 40%

SAN JOSE, Calif., October 18, 1995 -- Information Storage Devices, Inc. (ISD), (NASDAQ:ISDI), a leading supplier of voice solutions, today reported record results for the third quarter ended September 30, 1995.

Net revenues for the third quarter climbed 54 percent to $15.5 million, up from $10.1 million in the same period last year, and net income rose to $1.7 million, up 40 percent from $1.2 million a year ago. Earnings per share totaled 19 cents, comparable to the same period a year ago on 40 percent higher shares.

"ISD had another excellent quarter, once again reflecting strong demand for our voice chips," said David Angel, president and chief executive officer. "We made additional progress in converting our 1.5 micron designs to a 1.2 micron process, a program we initiated in the first half of 1995, to increase our supply of available product and improve profitability. Approximately 85 percent of our revenue in the third quarter was generated from 1.2 micron products," he said.

Gross margin improved to a record 41 percent, up from 36 percent in the same period last year, and 38 percent in the second quarter of fiscal 1995.

"We also achieved several new design wins for our ChipCorder solutions, including cellular, wireless and automotive applications," Angel added.

ISD's ChipCorder technology enables voice, sound and music to be recorded on a single microchip and played back at a later time. Messages can be recorded, rerecorded and stored with the assurance that they will not be lost, even during battery replacement.

For the nine months ended September 30, 1995, revenues rose 62 percent to $42.8 million compared with $26.5 million a year ago. Net income for the period was $4.1 million, or 49 cents per share, compared with net income of $2.4 million, or 38 cents, in the similar period last year. Shares outstanding increased 33 percent compared with the same period a year ago.

Information Storage Devices, Inc. designs, develops, and markets integrated circuit solutions for voice applications in the consumer and communications markets. The company is located at 2045 Hamilton Avenue, San Jose, CA 95125. Telephone: (408) 369-2520.

ChipCorder is a trademark of Information Storage Devices.

Information Storage Devices, Inc.
Condensed Statements Of Income
(in thousands, except per share amounts)
Three months endedNine months ended
--------------------------------------
9/30/959/30/949/30/959/30/94
Net revenues$15,546$10,070$42,785$26,485
Costs and expenses:
Cost of goods sold
9,238 6,46926,39918,167
Research and development
1,7779754,660 2,250
Selling, general and administrative2,1731,3506,1803,543
Total operating expenses13,1888,79437,23923,960
Income from operations2,3581,2765,5462,525
Other income (expense)295(17)818(45)
Income before income taxes
 2,6531,259 6,364 2,480
Provision for income taxes934 332,23257
Net income $1,719$1,226$4,132$2,423
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Earnings per share $0.19$0.19 $0.49$0.38
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Weighted avg common and common 8,947 6,3858,4366,364
equivalent shares outstanding

Information Storage Devices, Inc.
Condensed Balance Sheets
(in thousands)
9/30/95 12/31/94
(unaudited) (audited)
Assets
Current Assets:
Cash and short-term investments
$76,857$ 7,605
Accounts receivable, net
8,7475,711
Inventories
 5,0673,767
Other current assets
 1,911925
------ ------
Total current assets
92,58218,008
Property and equipment net 4,9573,559
Other assets6580
Long-term Investments02,529
Total assets
$ 100,726 $ 22,268
==============
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt
$1,055$ 774
Accounts payable and accrued liabilities
9,2946,954
Deferred revenue
1,635545
Total current liabilities
2,8311,775
Long-term liabilities2,8311,775
Shareholders' equity85,91112,220
Total liabilities and shareholders' equity$100,726$22,268
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