Computer Access Technology Reports Earnings Per Share of $0.03 on Revenue of $4.9 Million for Q2 2004

Computer Access Technology Reports Earnings Per Share of $0.03 on
Revenue of $4.9 Million for Q2 2004 


SANTA CLARA, Calif., July 22  /PRNewswire-FirstCall/ -- Computer Access
Technology Corporation [CATC] (NASDAQ:CATZ), a communication protocols expert
company, today reported financial results for the second quarter ended June 30,
2004.  Revenue for the second quarter of 2004 was $4.9 million, compared to
$3.9 million for the second quarter of 2003 and $4.6 million for the first
quarter of 2004.  The Company reported an operating profit of $334,000 for the
second quarter of 2004 compared with an operating loss of $78,000 in the second
quarter of 2003.  Combined with net other income of $218,000, the resulting net
profit for the second quarter of 2004 was $552,000, or $0.03 per share,
compared to a net profit of $120,000, or $0.01 per share in the second quarter
of 2003.  The Company generated $731,000 in cash flow from operations during
the second quarter of 2004.

For the second quarter of 2004, the Company's gross profit margin was 82.4%,
compared to 79.3% in the second quarter of 2003.  The Company's operating
expenses totaled $3.7 million.

Carmine Napolitano, President and CEO, said:  "We are pleased with the most
recent financial results, as they continue to validate the growth strategy we
put in place two years ago.  The investments we made to significantly expand
our product footprint, and with it our addressable market, have begun to
pay-off in the form of operating leverage and profitability."

During the quarter and in recent weeks CATC made the following corporate
announcements:

  --    On July 9, 2004, CATC announced that it had significantly
        strengthened its storage distribution network in North America by
        granting Sierra Technologies, LLC the right to sell CATC's Storage
        products along the East Coast of the U.S. Over the past 13 years,
        Sierra Technologies has established itself as a leading provider of
        electronic test, measurement, and manufacturing systems to the
        storage market, supporting a strong and loyal customer base.

  During the quarter CATC made the following product related announcements:

  --    Release of the FCTracer(TM) 4G, a 4 Gbps Fibre Channel expert
        analysis system offering 4 Gbps Fibre Channel early adopters a test
        platform that combines advanced capture, display, analysis and
        reporting tools with the ability to capture traffic at 1, 2 and
        4 Gbps signaling speed. With this product release, CATC becomes
        among the first to deliver support for 4G Fibre Channel, enabling us
        to challenge entrenched market participants.
  --    Release of its PETracer(TM) EML, a 16-lane PCI Express(R) expert
        analysis system built on CATC's newest and most advanced Universal
        Protocol Analyzer System(TM), the UPAS 100K. The PETracer EML
        captures, analyzes and displays bidirectional 16-Lane PCI Express
        traffic to allow semiconductor, motherboard and add-in card
        manufacturers to accelerate market introduction of their PCI Express
        solutions. The UPAS 100K is specifically designed for high-speed
        serial protocols such as PCI Express and provides future scalability
        with expanded hardware capabilities, significantly reducing the
        lifecycle cost of ownership.



Separately, CATC announced this morning the retirement of Chief Executive
Officer Dan Wilnai and new appointments to executive management and the Board
of Directors.

Conference Call, Webcast

CATC has scheduled a conference call for analysts and investors to discuss our
quarterly results at 8:00 a.m. PDT on Thursday, July 22, 2004.  Open to the
public, a live Webcast of the conference call will be accessible from the
"Investor Relations" section of CATC's website (http://www.catc.com/investor/).
 Following the live Webcast, an archived version of the Webcast will be
available on the CATC website through August 31, 2004.

About CATC

CATC, a communication protocol expert company, provides advanced verification
systems and connectivity products for existing and emerging digital
communications standards such as Bluetooth, Fibre Channel, IEEE 1394,
InfiniBand, PCI Express, SCSI, Serial ATA, Serial Attached SCSI (SAS) and USB.
CATC products are used by semiconductor, device, system and software companies
at each phase of their products' lifecycles from development through production
and market deployment. CATC's expert protocol analysis systems allow customers
to monitor communications traffic, diagnose design and operational problems and
confirm interoperability and standards compliance. Technicians also use CATC's
test and analysis products on production lines and for maintenance of deployed
systems and networks. CATC was founded in 1992 and is headquartered in Santa
Clara, California. For more information regarding CATC and its products, please
visit http://www.catc.com/.

Regarding Forward-Looking Statements

This press release may contain forward-looking statements based on CATC's
current expectations, such as availability of product, market acceptance and
competition, management capability and experience, levels of growth,
profitability and shareholder value. These forward-looking statements involve
risks and uncertainties. A number of important factors could cause actual
results to differ materially from those in the forward-looking statements, such
as CATC's production of new products, market acceptance of its products,
competitive pressures, management performance, success of growth, profitability
and increased shareholder value. These factors, as well as other factors that
could cause actual results to differ materially, are discussed in more detail
in CATC's Annual Report on Form 10-K, filed February 20, 2004, as amended by
its Form 10-K/A filed on March 3, 2004, its most recent Form 10-Q filed on May
13, 2004 and subsequent filings CATC may make with the SEC, as amended, which
can be viewed at the Securities and Exchange Commission's website at
http://www.sec.gov/.

NOTE:  CATC, Computer Access Technology Corporation, FCTracer, PETracer,
Universal Protocol Analyzer System, and UPAS are proprietary marks of Computer
Access Technology Corporation.  All other company names and marks may be
trademarks of the respective companies with which they are associated.

                  COMPUTER ACCESS TECHNOLOGY CORPORATION
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                        (unaudited, in thousands)

                                                   June 30,   December 31,
                                                     2004          2003
  ASSETS

  Current assets:
    Cash and cash equivalents                      $18,176        $34,116
    Short-term investments                           2,617          1,055
    Trade accounts receivable, net                   3,000          3,180
    Inventories                                      1,592            907
    Other current assets                               615            675
      Total current assets                          26,000         39,933
  Long-term investments                             24,779          9,367
  Property and equipment, net                          980            768
  Purchased intangibles                                 98            167
  Other assets                                         135            114
                                                   $51,992        $50,349

  LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities:
    Accounts payable                                  $795           $393
    Accrued expenses                                 3,116          2,919
    Accrued restructuring                               15             29
    Deferred revenue                                   581            535
      Total current liabilities                      4,507          3,876
  Deferred rent                                         15              2
      Total liabilities                              4,522          3,878

  Stockholders' equity:
    Common stock                                        20             19
    Additional paid-in capital                      52,960         52,595
    Deferred stock-based compensation                   --            (32)
    Unrealized loss on investments                    (312)            --
    Accumulated deficit                             (5,198)        (6,111)
      Total stockholders' equity                    47,470         46,471
                                                   $51,992        $50,349


                  COMPUTER ACCESS TECHNOLOGY CORPORATION

             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           (unaudited, in thousands, except per share amounts)

                                   Three Month Period    Six Month Period
                                         Ended                Ended
                                        June 30,             June 30,
                                    2004      2003       2004       2003

  Revenue                         $4,896     $3,856     $9,541     $7,118
  Cost of revenue                    853        791      1,669      1,455
  Amortization of acquired
   developed technology                9          9         17         18
  Gross profit                     4,034      3,056      7,855      5,645
  Operating expenses:
    Research and development       1,569      1,249      3,172      2,557
    Sales and marketing            1,515      1,193      2,796      2,337
    General and administrative       590        585      1,272      1,261
    Amortization of
     purchased intangibles            26         26         52         52
    Amortization of deferred
     stock-based compensation         --         81         26        140
        Total operating expenses   3,700      3,134      7,318      6,347
  Income (loss) from operations      334        (78)       537       (702)
  Other income, net                  218        198        376        359
  Income (loss)
   before income taxes              5522        120        913       (343)
  Income taxes                        --         --         --         --
  Net income (loss)                 $552       $120       $913      $(343)
  Net income (loss) per share:
    Basic                          $0.03      $0.01      $0.02     $(0.02)
    Diluted                        $0.03      $0.01      $0.02     $(0.02)
  Weighted average
   shares outstanding
    Basic                         19,551     19,442     19,509     19,411
    Diluted                       20,718     19,980     20,688     19,411


DATASOURCE: Computer Access Technology Corporation



CONTACT:  Jason LeBeck of Computer Access Technology Corporation,

[phone], or 



Web site:  http://www.catc.com/

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