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LeCroy TO PURCHASE SERIAL DATA PROTOCOL ANALYZER PROVIDER

LeCroy Corp and Computer Access Technology Cor (CATC) announced that their boards of directors have unanimously approved a definitive agreement for LeCroy to acquire all of the outstanding common stock of CATC for $6 per share, or approximately $81 million in net cash. CATC provides the computer and data storage markets with comprehensive solutions for testing and verifying serial data communications protocols.

The transaction will enable LeCroy to:

• Capitalize on the surging demand for serial data test instruments.
• Leverage its global, technical, direct sales force to accelerate the growth of CATC's products.
• Strengthen its dominant position in the data storage market.
• Increase penetration into the computer market.
• Substantially expand gross margins to well above 60 percent.
• Increase operating leverage leading to expanded operating margins.
• Add to its strong cash generation capabilities.

"Our acquisition of CATC advances LeCroy's two key objectives -- to drive superior sustainable growth and generate significant cash from operations," said President and Chief Executive Officer Tom Reslewic. "CATC's leadership in high-speed serial data protocol test solutions directly complements our strength in the serial data oscilloscope market. Given the depth and efficiency of LeCroy's direct sales force, the combined company will be perfectly positioned to capitalize on the rapid deployment of new serial test standards and devices."

CATC President and CEO Carmine Napolitano said, "CATC has established itself as the standard for USB protocol analysis solutions. Our competitive advantage is our position as a first mover in designing testing solutions for the most important emerging serial data standards such as PCI Express, Serial Attached SCSI and Serial ATA. We are excited about the benefits of joining forces with LeCroy to provide comprehensive serial data test solutions from the physical layer to the protocol layer of the stack. Together, LeCroy and CATC can accomplish more in the serial data test market than either company could on its own."

"LeCroy and CATC each supply test solutions for advanced and emerging serial data protocols, yet there is virtually no overlap in products, markets or geographic footprint," added Reslewic. "LeCroy dominates the data storage market for serial data products. CATC's strength is the computer market. LeCroy is strong in physical layer products. CATC is a recognized leader in the protocol layer for serial data standards. As a result, LeCroy's products and technical strengths are focused on the early stages in the design cycle like hardware development, while CATC targets the later stages, such as system integration. While both companies are strong in North America, CATC is just beginning to penetrate certain markets in Europe and Asia, where LeCroy is well established. CATC employs a distributor and manufacturers' rep-based sales channel, while LeCroy uses a direct sales force."

"Growing consumer demand for digital audio and video imaging, along with pressure on data bus designers to improve throughput and reduce costs, are driving the creation of new serial data standards, protocols and devices," continued Reslewic. "With this acquisition, we expect to capture as much as 40 percent of the addressable serial data test market, which we project will increase from approximately $190 million today to nearly half a billion dollars within the next three to five years. Our estimate for this market is based in part on the fact that, over the past three years, LeCroy has substantially expanded its serial data business to more than $45 million. CATC also has grown rapidly, generating a revenue run rate of about $20 million. Along with its recent history of solid revenue growth, CATC generates gross margins of more than 82 percent as well as strong operating cash flow."

LeCroy expects the transaction to be accretive to earnings in the first full quarter of combined operations on an adjusted basis, excluding amortization of acquisition-related intangibles and other transaction-related charges.

For the trailing 12 months ended June 30, CATC reported $17.7 million in revenues. CATC reported a 34 percent year-over-year increase in revenue for the six months ended June 30, 2004 to $9.5 million. At the same time, the company reported an operating profit of $537,000 compared with an operating loss of $702,000 for the first six months of 2003. CATC generated $1.7 million in cash flow from operations for the first six months of 2004. At June 30, 2004 CATC had 69 employees.

Napolitano will join LeCroy's executive management team as president of the new Serial Data Solutions Division to be formed during the next sixty days and which will include all of CATC's Santa Clara operations and key elements of LeCroy's oscilloscope business aimed at serial data test applications.

"We look forward to welcoming the team of outstanding CATC employees into the LeCroy family," said Reslewic. "The emergence of serial data standards is our most critical growth driver for the foreseeable future. Today, LeCroy and CATC are each positioned as leaders in complementary segments of the serial data test solutions market. As a combined company, we will extend that leadership by continuing to rapidly gain share and expand market opportunities."