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4Front Software International, Inc. Announces Second Quarter and Six Months Results.

LONDON--(BUSINESS WIRE)--Sept. 10, 1997--4Front Software International, Inc. (Nasdaq NM Symbol: FFST) today announced results for the second quarter and six months ended July 31, 1997. -0-
 Highlights(a)

Second Quarter Ended July 31,
 1997 1996 % Increase

Revenues $ 18,820,000 $10,060,000 87%

Net income $ 677,000 $ 313,000 116%

Net income per share
 (basic) $ 0.10 $ 0.07 43%

Net income per share
 (diluted) $ 0.10 $ 0.06 67%

Fully diluted shares
 outstanding 6,776,606 5,545,307
-0-

Six Months Ended July 31,
 1997 1996 % Increase

Revenues $37,444,000 $20,611,000 82%

Net income $ 1,308,000 $ 511,000 156%

Net income per share
 (basic) $ 0.20 $ 0.14 43%

Net income per share
 (diluted) $ 0.19 $ 0.11 73%

Fully diluted shares
 outstanding 6,737,475 4,698,297
-0-
 (a) A substantial part of the company's growth in the past three
years has been achieved through acquisition. Accordingly, the
results of operations from period to period are not necessarily
comparable.
-0-
 For the second quarter ended July 31, 1997, revenues for 4Front
increased 87% to $18,820,00 versus $10,060,000 reported for the
comparable year-ago period. Net income for the most recent quarter
was $677,000, or $0.10 per share fully diluted (based on 6,776,606
shares), versus $313,000, or $ $0.06 per share fully diluted (based
on 5,545,307 shares), for the comparable year-ago period. The
increase in shares outstanding reflects the impact of the company's
secondary offering of Common Stock that was completed during the
second quarter of 1996 and the assumed conversion of applicable stock
and warrants for the second quarter ended July 31, 1997.
 For the six months ended July 31, 1997, revenues for 4Front
increased 82% to $37,444,000 versus $20,611,000 for the comparable
year-ago period. Net income for the period was $1,308,000, or $0.19
per share fully diluted (based on 6,737,475 shares), versus $511,000,
or $0.11 per share fully diluted (based on 4,698,297 shares) for the
comparable year-ago period. The increase in shares outstanding
reflects the impact of the Company's secondary offering of Common
Stock that was completed during the second quarter of 1996 and the
assumed conversion of applicable stock and warrants for the six
months ended July 31, 1997.
 Anil Doshi, Chairman and Chief Executive Officer of 4Front
Software International, Inc., said, "The second quarter was another
period of solid progress toward our goal of becoming one of the UK's
leading independent computer service companies. Our record results
were driven by the growth of our higher margin services activities,
which resulted in overall improvement in operating margins and
increased profitability. During the second quarter, our services
division won a significant number of large-scale contracts. Prior to
this week's acquisition, 4Front was servicing seven contracts with a
current annual value of over $1 million, versus servicing no such
contracts during the first half of last year.
 "As announced earlier this week, 4Front has now moved into the
top five UK independent hardware maintenance companies (according to
the most recent industry statistics) through the acquisition of
Firstpoint Limited. One of our major targets in the current year
was to achieve a revenue mix in which the provision of services
rather than the distribution of products was the largest contributor.
We expect that the Firstpoint acquisition, coupled with the internal
growth of our existing service activities, will now enable us to
achieve this target. The Firstpoint acquisition will not only
further increase 4Front's market profile, but also give our services
business its own critical mass from which to obtain additional
leverage. For example, the Firstpoint acquisition will increase our
number of $1 million plus contracts to 15 and will expand our
geographical coverage as well as our technical expertise."
 Mr. Doshi concluded, "Operating margin improvement remains our
primary target going forward. We have made significant progress in
this area, primarily through the increased contribution of our higher
margin service activities over the past year. Although we expect the
cost of integration of Firstpoint to halt temporarily the trend of
overall margin growth for the remainder of the current year, we
expect to resume that upward trend in 1998, after Firstpoint's
services business has been assimilated into 4Front. We are confident
of achieving this result since the integration of Firstpoint is in
the hands of the same management team that successfully integrated
Datapro, acquired a year ago, which is now contributing strongly to
overall profitability and which has been a significant factor in
margin and service revenue growth.
 Mark Ellis, President of 4Front Software International, Inc.,
said, "The product division has historically played an important role
in our business, particularly in giving us the critical mass to win
increasingly larger service contracts. It was in this context that
the successful acquisition of Hammer last August was of such
importance. Now, revenue growth in this area is of secondary
importance to overall operating margin improvement and within our
storage, network computer and other product range, we are primarily
seeking product that can deliver better than average distribution
margins and/or offer integration or other service opportunities to
us. As a result of this higher margin and value-added focus we are
increasingly eliminating or reducing product distribution business
that carries margins that are unacceptably low. This policy is
naturally having an impact on overall product distribution revenue
contrasting with significant expansion of higher margin service
activities.
 "During the past two months, management has reorganized 4Front's
operating structure in order to provide a more effective framework
for margin improvement, business growth and management efficiencies.
The new structure separates 4Front's higher margin service and
value-added activities, previously operated as 4Front Services, into
three new divisions: 4Front Services, 4Front Networks and 4Front
Software. 4Front Products will remain our distribution arm. These
newly organized divisions will be managed and coordinated more
closely under central management in order to more effectively promote
the 4Front brand and to enable greater leverage of the considerable
cross-marketing opportunities within 4Front's established customer
base."
 4Front Software International, Inc., a UK-based specialized
computer services company provides a wide range of specialized
high-end information technology solutions and services principally to
Financial Times UK Top 500 companies and government authorities. The
company provides key elements of distributed computing, including
systems development and integration, storage and client-server
solutions and products, as well as extensive hardware maintenance and
software support, including help desk support services. The
company's customers include Mobil Oil, Royal Dutch/Shell Group,
GEC/Marconi, JP Morgan, Fujitsu, Dupont, Reuters and the U.K.
Ministry of Defense.

4Front's website can be found at www.4ffst.com
-0-


 4FRONT SOFTWARE INTERNATIONAL, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS

 For the Three Months Ended For the Six Months Ended
 July 31, July 31, July 31, July 31,
 1997 1996 1997 1996
 (unaudited) (unaudited) (unaudited) (unaudited)

REVENUES
Products $ 10,507,327 $ 6,867,120 $ 20,935,014 $ 14,195,459
Services 8,312,680 3,193,305 16,509,278 6,415,204
 18,820,007 10,060,425 37,444,292 20,610,663

Cost of Products 8,932,880 5,451,628 17,813,749 11,454,423
Cost of Services 3,788,994 1,203,928 7,937,735 2,480,274
 12,721,874 6,655,556 25,751,484 13,934,697

GROSS PROFIT
Products 1,574,447 1,415,492 3,121,265 2,741,036
Services 4,523,686 1,989,377 8,571,543 3,934,930
 6,098,133 3,404,869 11,692,808 6,675,966

OPERATING EXPENSES:
 Selling, general
 and admin-
 istrative 4,687,082 2,832,116 9,041,708 5,544,194
 Depreciation 222,524 73,437 417,690 154,396
 Amortization 230,611 61,870 441,092 123,740
 Total operating
 expenses 5,140,217 2,967,423 9,900,490 5,822,330

INCOME BEFORE
 INTEREST, INCOME
 TAXES AND SHARE OF
 RESULTS IN EQUITY
 INVESTEE: 957,916 437,446 1,792,318 853,636

Interest income 84,566 77,747 162,210 81,588
Interest expense (139,777) (25,322) (210,922) (128,936)

INCOME BEFORE INCOME
 TAXES AND SHARE OF
 RESULTS IN EQUITY
 INVESTEE: 902,705 489,871 1,743,606 806,288

SHARE OF OPERATING
 (LOSS) OF
 EQUITY INVESTEE - (72,219) - (124,392)

INCOME BEFORE
 INCOME TAXES 902,705 417,652 1,743,606 681,896

INCOME TAXES 225,676 104,413 435,901 170,474

NET INCOME $ 677,029 $ 313,239 $ 1,307,705 $ 511,422

NET INCOME PER
 COMMON SHARE $ 0.10 $ 0.06 $ 0.19 $ 0.12
 (In accordance
 with APB Op. No. 15)

NET INCOME PER
 COMMON SHARE
 (Basic) $ 0.10 $ 0.07 $ 0.20 $ 0.14
 (In accordance
 with SFAS No. 128)

NET INCOME PER
 COMMON SHARE
 (Diluted) $ 0.10 $ 0.06 $ 0.19 $ 0.11
 (In accordance
 with SFAS No. 128)
-0-
 4FRONT SELECT BALANCE SHEET INFORMATION


 July 31, 1997 January 31, 1997
 (unaudited) (audited)

Current assets $ 29,422,000 $ 30,349,000
Current liabilities 22,425,000 24,764,000
Total assets 40,813,000 42,021,000
Long-term debt 322,000 489,000
Shareholders' equity $ 18,066,000 $ 16,769,000




CONTACT: Investor Relations Contact: Jason Thompson

Lippert/Heilshorn & Associates, Inc.

Tel: 212/838-3777

or

Company Contact: Mark Ellis or Ken Newell

4Front Software International, Inc.

Tel: 011/44-171-269-5848
COPYRIGHT 1997 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Date:Sep 10, 1997
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