Communications Systems, Inc. Reports Fourth Quarter and Full Year 2008 Results

MINNETONKA, Minn., March 24 /PRNewswire-FirstCall/ -- Communications Systems,
Inc. (Nasdaq: JCS) today reported 2008 sales of $122,700,000, an all-time
record for the Company. Sales were up 1.2% from a year ago. Reported net
income for 2008, after a non-cash impairment charge of $3,000,000, was
$6,611,000 or $0.77 per diluted share versus $7,511,000 or $0.85 per diluted
share in 2007. The $3,000,000 non-cash impairment charge, as reported in the
first quarter, was for goodwill and asset impairment due to the loss of the
U.S. Virgin Islands Department of Education contract with JDL.

2008 fourth quarter sales remained flat at $28,405,000 compared to $28,451,000
in 2007. Fourth quarter net income was $1,370,000 or $$0.17 per diluted share
compared to $1,452,000 or $0.17 per diluted share for the same period in 2007.

For the year ending December 31, 2008, operating income increased 3.0%, after
the non-cash impairment charge of $3,000,000, before taxes to $10,584,000
compared to $10,263,000 for 2007. Operating income increased to $2,219,000
for the fourth quarter of 2008 compared to $1,703,000 for the same period in
2007.

Jeffrey K. Berg, President and CEO, commented, "We are pleased with our 2008
fourth quarter and full year results in the face of the current world economic
conditions. Transition Networks, our largest and fastest growing business
unit, increased 2008 revenue 18% over 2007 and increased 2008 operating profit
84% over 2007. CSI's employees are doing an outstanding job of managing
through these difficult and challenging times, while continuing to prepare CSI
and the business units for when the economy turns to a "growth position."

David T. McGraw, Vice President of Finance and CFO, also commented, "CSI
continues its history of a strong financial Company. At December 31, 2008,
CSI closed the year with $29,952,000 in cash in spite of using approximately
$7.3 million in cash for stock dividends and stock buy-back during the year.
The current ratio continues at a lofty 8 to 1."

Cautionary Statement
From time to time, in reports filed with the Securities and Exchange
Commission, in press releases, and in other communications to shareholders or
the investing public, the Communications Systems Inc. may make forward-looking
statements concerning possible or anticipated future financial performance,
business activities or plans which are typically preceded by the words
"believes," "expects," "anticipates," "intends" or similar expressions. For
these forward-looking statements, the Company claims the protection of the
safe harbor for forward-looking statements contained in federal securities
laws. Shareholders and the investing public should understand that these
forward-looking statements are subject to risks and uncertainties, including
those disclosed in our periodic filings with the SEC, which could cause actual
performance, activities or plans after the date the statements are made to
differ significantly from those indicated in the forward-looking statements
when made.

About Communications Systems
Communications Systems, Inc. provides physical connectivity infrastructure and
services for cost-effective broadband solutions and is a leading supplier of
voice-grade connecting devices and wiring systems. CSI serves the broadband
network market as the world's leading supplier of media conversion technology,
that permits networks to deploy fiber optic technology while retaining the
copper-based infrastructure already embedded in the network. In addition, CSI
supplies copper wire and fiber optic structured wiring systems for broadband
networks, as well as line filters for digital subscriber line service. CSI
also provides network design, training and management services.

CSI CONSOLIDATED SUMMARY OF EARNINGS
Selected Income Statement Data

Three Months Three Months Twelve Months Twelve Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
2008 2007 2008 2007

Sales $28,404,879 $28,450,812 $122,699,678 $121,243,248
Gross margin 10,452,447 9,525,130 46,691,516 42,885,710
Operating income 2,219,411 1,703,476 10,583,587 10,262,568
Income before income
taxes 2,240,088 2,773,253 11,181,292 12,022,766
Income taxes 869,875 1,321,000 4,569,875 4,512,000
Net income $1,370,213 $1,452,253 $6,611,417 $7,510,766

Basic net income
per share $0.17 $0.17 $0.77 $0.86
Diluted net income
per share $0.17 $0.17 $0.77 $0.85
Cash dividends
per share $0.12 $0.12 $0.48 $0.42

Average basic
shares outstanding 8,282,348 8,577,358 8,539,396 8,761,300
Average dilutive
shares outstanding 8,284,812 8,642,379 8,562,533 8,830,713

Selected Balance Sheet Data

December 31, 2008 December 31, 2007

Total assets $98,737,791 $100,760,313
Cash 29,951,561 29,427,879
Property, plant and
equipment, net 12,014,541 13,944,597
Long-term liabilities 4,918,716 4,044,905
Stockholders' equity 83,728,143 84,930,582

SOURCE Communications Systems, Inc.

Jeffrey K. Berg, President and Chief Executive Officer, or David T. McGraw,
Vice President - Finance and Chief Financial Officer, +1-952-996-1674, both of
Communications Systems, Inc.