COMMUNICATIONS SYSTEMS, INC. DECLARES QUARTERLY DIVIDEND OF $0.04 PER SHARE AND INCREASES LINE OF CREDIT FROM $10 MILLION TO $15 MILLION – AUGUST, 2016

Minnetonka, MN – August 18, 2016 – Communications Systems, Inc. (NASDAQ: JCS) (“CSI” or the “Company”), a global provider of physical connectivity infrastructure and services for deployments of broadband networks, today announced that its Board of Directors has declared a regular quarterly cash dividend of $0.04 per common share. The dividend will be payable on October 3, 2016 to shareholders of record as of September 15, 2016. The quarterly dividend announced today represents a reduction of $0.12 per share, or approximately $4.2 million on an annualized basis, from the regular quarterly dividend of $0.16 per share last paid on July 1, 2016. This marks the 56th consecutive quarter that CSI has paid a dividend to its shareholders.

The Company also announced that it has signed an amended and restated credit agreement, replacing a note that matures on November 1, 2016. Under this agreement, the Company has expanded its line of credit from $10 million to $15 million. Also, in addition to other cost cutting initiatives recently announced by the Company, the Board of Directors authorized a number of expense reduction measures, including a reduction in compensation paid to non-employee directors.

“We remain committed to returning cash to our shareholders while maintaining financial flexibility to invest in new product development and the growth of our businesses. Our new product sales have grown significantly over the past year and we aim to build on this success by continuing to invest in the business. We are pursuing a number of compelling opportunities that we believe will accelerate new product sales, deliver strong ROI and enhance long-term shareholder value,” commented Roger H.D. Lacey, Chief Executive Officer of CSI.

“Based on recent trades in the Company’s common stock in the last week, the declared dividend of $0.04 per share represents an annual yield of approximately 2.3%, which is in excess of the average yield of our industry peers. The $4.2 million in annualized cash savings generated by the reduction to our quarterly cash dividend, combined with the $5 million increase in our available credit line, will allow us to fund our growth plan while protecting our strong balance sheet,” Mr. Lacey concluded.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on Communications Systems’ current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results or events may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive or regulatory factors, and other risks and uncertainties affecting the operation of Communications Systems’ business. These risks, uncertainties and contingencies are presented in the Company’s Annual Report on Form 10-K and, from time to time, in the Company’s other filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. Communications Systems is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

About Communications Systems

Communications Systems, Inc. provides physical connectivity infrastructure and services for global deployments of broadband networks. Focusing on innovative, cost-effective solutions, CSI provides customers the ability to deliver, manage, and optimize their broadband network services and architecture. From the integration of fiber optics in any application and environment to efficient home voice and data deployments to optimization of data and application access, CSI provides tools for maximum utilization of the network from the edge to the user. With partners and customers in over 50 countries, CSI has built a reputation as a reliable global innovator focusing on quality and customer service.

Contacts:
Communications Systems, Inc		The Equity Group Inc.
Edwin C. Freeman		Devin Sullivan
Chief Financial Office		Senior Vice President
952-996-1674		212-836-9608
[email protected]		[email protected]
Roger H. D. Lacey		Kalle Ahl, CFA
Chief Executive Officer		Senior Associate
952-996-1674		212-836-9614
		[email protected]