HUDSON, Ohio--(BUSINESS WIRE)--November 15, 2010--DPAC Technologies Corp. (OTCBB: DPAC), a leader in device networking and connectivity solutions, today reported results for its third quarter ended September 30, 2010.

The Company reported revenue of $1.88 million for the third quarter of 2010 compared with $1.43 million for the third quarter of 2009 and $1.98 million for the second quarter of 2010, and which represented an increase of $452,000, or 32%, over the prior year period.

Gross margin percentage for the third quarter was 40.4% compared to 39.0% for the same period of 2009. Total operating expenses incurred in the third quarter of 2010 of $760,000 decreased by $5,000 from the prior year period.

The Company reported a loss from operations of $1,300 as compared to an operating loss of $208,000 for the third quarter of 2009 and an operating profit of $32,000 for the second quarter of 2010. The Company reported a net loss of $219,000 as compared to a net loss of $384,000 for the prior year’s third quarter and a net loss of $93,000 for the second quarter of 2010.

For the nine months ended September 30, 2010, the Company reported revenue of $5.63 million compared with revenue of $5.14 million for the nine months ended September 30, 2009, an increase of 10%.

Gross margin percentage for the nine months ended September 30, 2010 increased to 43.5% from 40.8% for the same period of 2009. Total operating expenses for the nine months ended September 30, 2010 of $2.36 million decrease by $257,000, or 10%, from the nine months ended September 30, 2009. The Company reported income from operations for the nine months ended September 30, 2010 of $87,000 as compared to an operating loss of $524,000 for the comparable prior year period. The Company reported a net loss of $408,000 as compared to a net loss of $985,000 for the nine months ended September 30, 2009.

Chief Executive Officer and President Steve Runkel commented, “Our third quarter results demonstrate a continued strengthening in our business. Revenue for the quarter increased over 30% compared to the same period last year. We are particularly pleased to see growth in excess of 30% in both the Device Connectivity and the Device Networking product lines. During the quarter we made substantial progress in resolving several of the supply chain challenges that have impacted the timing of our revenue throughout the year. We expect to see continued progress in this area in Q4.”

Mr. Runkel continued, “We are also pleased to have announced the latest generation of our flagship industrial embedded 802.11 modules during the quarter. The new Airborne WLNG-DP550 series of modules integrates significantly advanced radio performance with our advanced security and device integration functionality to provide the leading Wi-Fi solution for truly industrial applications. An important feature of the WLNG-DP550 series is the backward compatibility with all previous generations allowing our customers to implement advanced functionality without modification to their current product designs.”

DPAC Technologies provides embedded wireless networking products for machine-to-machine communication applications. DPAC’s Airborne™ and AirborneDirect™ wireless products are used by major OEMs in the transportation, instrumentation and industrial control, homeland security, medical diagnostics and logistics markets to provide remote data collection and control. DPAC Technologies is based in Hudson, OH. The Company’s web site address is www.dpactech.com. Information concerning DPAC is filed by DPAC with the SEC and is available on the SEC website, www.sec.gov.

Quatech, Inc., a wholly-owned subsidiary of DPAC, delivers high performance device networking & connectivity solutions to help companies improve their bottom line performance. Quatech enables reliable machine-to-machine (M2M) communications via secure 802.11 wireless or traditional wired networks with industrial grade (hardened) embedded radios, modules, boards and external device servers and bridges. For local and mobile connections, Quatech serial adapters provide secure connectivity and port expansion via any interface option. Satisfied customers rely on our unique combination of performance and support to improve bottom line performance through real-time remote monitoring & control, streamlined systems and lower total cost of ownership (TCO). Quatech markets its products through a global network of distributors, resellers, systems integrators and original equipment manufacturers (OEMs). Founded in 1983, Quatech is headquartered in Hudson, Ohio, and merged with DPAC Technologies, Inc. in February 2006. www.quatech.com.

This press release includes forward-looking statements. You can identify these statements by their forward-looking words such as "may," "will," "expect," "anticipate," "believe," "guidance," "estimate," "intend," "predict," and "continue" or similar words or any connection with any discussion of future events or circumstances or of management's current estimates or beliefs. Forward-looking statements are subject to risks and uncertainties, and therefore results may differ materially from those set forth in those statements. More information about the risks and challenges faced by DPAC Technologies Corp. is contained in the Securities and Exchange Commission filings made by the Company on Form S-4, 10-K, 10-Q and 8-K. DPAC Technologies Corp. specifically disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, future developments or otherwise.

DPAC Technologies Corp. Summary Consolidated Balance Sheet Information (Unaudited) (In 000’s)

	September 30,		December 31,
	2010		2009
CURRENT ASSETS:	(Unaudited)
Cash	$	29	$	18
Accounts receivable, net		1,159		1,124
Inventories		941		1,077
Prepaid expenses and other current assets		102		74
Total current assets		2,231		2,293

Property, net		662		745
Deferred financing costs		80		102
Goodwill and intangible assets		6,656		7,027
Other assets		16		19
TOTAL	$	9,645	$	10,186

CURRENT LIABILITIES:
Revolving credit facility	$	1,500	$	1,425
Current portion of long-term debt		329		230
Accounts payable		1,117		1,514
Liability for put warrants		129		100
Other accrued liabilities		516		367
Total current liabilities		3,591		3,636

Long-term debt, net of current portion		3,165		3,267

Net stockholders' equity		2,889		3,283

TOTAL	$	9,645	$	10,186

DPAC Technologies Corp.
Condensed Consolidated Statements of Operations
( Unaudited )
(in 000's)


	For the quarter ended:						For the nine months ended:
	September 30,						September 30,
	2010			2009			2010			2009

REVENUE	$	1,877		$	1,425		$	5,631		$	5,136

COST OF GOODS SOLD		1,119			869			3,181			3,040

GROSS PROFIT		758			556			2,450			2,096

OPERATING EXPENSES
Sales and marketing		190			182			555			674
Research and development		178			178			561			599
General and administrative		255			260			847			958
Amortization of intangible assets		136			132			400			377
Restructuring costs		-			12			-			12
Total operating expenses		759			764			2,363			2,620

INCOME (LOSS) FROM OPERATIONS		(1	)		(208	)		87			(524	)

OTHER EXPENSES:
Interest expense		153			147			467			432
Fair value adjustment for warrant liability		65			29			28			29
Total other expenses		218			176			495			461

NET LOSS	$	(219	)	$	(384	)	$	(408	)	$	(985	)

PREFERRED STOCK DIVIDENDS		113			47			338			143

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(332	)	$	(431	)	$	(746	)	$	(1,128	)

NET LOSS PER SHARE:
Net Loss - Basic and diluted	$	0.00		$	0.00		$	0.00			($0.01	)

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic and diluted		109,415			105,856			109,415			103,167


An itemized reconciliation between net earnings on a GAAP basis and non-GAAP basis is as follows:

GAAP net loss	$	(219	)	$	(384	)	$	(408	)	$	(985	)
Amortization of intangibles assets		136			132			400			377
Compensation expense for stock options		10			20			50			100
Non-GAAP net income (loss)	$	(73	)	$	(232	)	$	42		$	(508	)

CONTACT:
DPAC Technologies
Steve Vukadinovich, Chief Financial Officer, 330-655-9000
Steve.Vukadinovich@dpactech.com
or
Steve Runkel, Chief Executive Officer, 330-655-9000
Steve.Runkel@Quatech.com