Ciprico Reports First Quarter Results

MINNEAPOLIS -- Ciprico Inc. (NASDAQ: CPCI) (the "Company") today announced results for the first quarter ended December 31, 2006. Sales for the quarter of $2.8 million were at thesame level as sales in the previous quarter but down 31% vs. the firstquarter of the prior fiscal year. Substantial decline in sales of bothlegacy products and DiMeda products were in part offset by increases insoftware licensing revenue related to sales of RAIDCore(TM) andFlexSTORE(TM) software. In addition, sales of MediaVault(TM) productsincreased 10% over the prior quarter and were consistent with the firstquarter of the prior year.

Gross margin for the first quarter was 43% compared to 31% in the previousquarter and 39% in the prior year. The higher gross margin was in spite ofadditional inventory charges for legacy products. The key driver of the higher gross margin was the increase in softwarelicensing revenues, which have substantially better gross margins. Withoutthe inventory charges gross margin would have exceeded 50%.

Ciprico Inc.