PERIPHONICS CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 (In thousands, except share and per share data)

                                                                                 February 28, 1998        May 31, 1997
                                                                                    (Unaudited)             (Audited)

ASSETS
Current Assets:
Cash and cash equivalents.................................................            $10,989                 $25,092
Short-term investments....................................................             11,033                    ---
Accounts receivable, less allowance for doubtful accounts
    of $1,000 and $1,000, respectively....................................             37,289                  35,735
Inventories...............................................................             13,631                  12,858
Deferred income taxes.....................................................              1,412                   1,357
Prepaid expenses and other current assets.................................              1,256                   1,211
                                                                                       ------                 -------
    Total Current Assets                                                               75,610                  76,253

Property, plant and equipment, net........................................             19,133                  16,952
Other assets..............................................................                412                     378
                                                                                       ------                 -------
TOTAL ASSETS..............................................................            $95,155                 $93,583
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LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Accounts payable..........................................................           $  5,258                 $ 5,928
Accrued expenses and other current liabilities............................             12,804                  15,125
                                                                                      -------                 -------
     Total Current Liabilities............................................             18,062                  21,053
Deferred Income Taxes.....................................................                691                     322
                                                                                      -------                 -------
TOTAL LIABILITIES.........................................................             18,753                  21,375
                                                                                      -------                 -------

Shareholders' Equity:
Preferred stock, par value $.01 per share,                                               ---                    ---
    1,000,000 shares authorized, none issued
Common stock, par value $.01 per share,                                                   137                     137
    30,000,000 shares authorized;
    13,801,684 shares outstanding as of February 28, 1998;
    13,693,758 shares outstanding as of May 31, 1997
Additional Paid-in Capital................................................             43,394                  42,559
Retained Earnings.........................................................             32,871                  29,512
                                                                                      -------                 ------- 
  Total Shareholders' Equity..............................................             76,402                  72,208
                                                                                      -------                 -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................................            $95,155                 $93,583
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