ADD BW0166 (SANTA-CRUZ-OPERATION).

--(BUSINESS WIRE)--

ADD BW0166 (SANTA-CRUZ-OPERATION), after last graph xxx SCO's home page on the World Wide Web: http:\\www.sco.com -0-

                The Santa Cruz Operation Inc.
            Consolidated Statements of Operations
           (In thousands, except earnings per share)

                         Three Months Ended      Six Months Ended
                              March 31                March 31
                          1995       1994        1995         1994
                        (unaudited)(unaudited) (unaudited) (unaudited)

Net revenues:
 Licenses                $ 47,115   $38,869      $89,743     $75,696
 Services                   6,159     4,848       11,513       9,662
 Net revenues              53,274    43,717      101,256      85,358

Cost of revenues:
 Licenses                   8,106     8,619       16,070      16,051
 Services                   5,137     4,143        9,966       8,398
 Total cost of revenues    13,243    12,762       26,036      24,449
 Gross margin              40,031    30,955       75,220      60,909

Operating expenses:
 Research and development   8,300     7,234       15,751      13,960
 Sales and marketing       20,665    16,163       39,498      32,596
 General and administrative 5,168     4,547        9,535       9,205
 Non-recurring charges          0         0       14,095           0
 Total operating expenses  34,133    27,944       78,879      55,761
 Operating earnings
  (losses)                  5,898     3,011       (3,659)      5,148

Other income (expense):
 Interest income (expense),
  net                         604       326        1,503         562
 Other income (expense)      (143)      264          (74)         38
  Profit (loss) before
   income taxes             6,359     3,601       (2,230)      5,748
 Income taxes               1,764     1,116        2,503       1,782
  Net profit (loss)        $4,595    $2,485      $(4,733)     $3,966
  Net profit (loss) per
   share                   $ 0.14    $ 0.08      $ (0.15)     $ 0.12

  Common and common equivalents
   used in computing net profit
   per share               33,744    31,856       30,904      31,837

                           The Santa Cruz Operation Inc.
                           Consolidated Balance Sheets
                        (in thousands, except for share data)

                                          March 31,   Sept. 30,
                                            1995         1994
                                        (unaudited)

ASSETS
Current Assets:
 Cash and cash equivalents                 $17,132      $27,703
 Short-term investments                     43,758       51,613
 Receivables, net                           45,430       38,149
 Inventories                                 1,670        1,399
 Deferred tax asset                          1,650        1,650
 Other current assets                        7,345        4,842
Total current assets                       116,985      125,356

Property and equipment, net                 14,100       10,090
Other assets                                10,129        3,128
Total assets                              $141,214     $138,574

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
 Current portion of capitalized
  lease obligations and term loan         $    983     $  1,291
 Royalties payable                           6,199        7,395
 Trade accounts payable                     12,298        8,888
 Income taxes payable                        7,833        9,044
 Accrued expenses and other current
  liabilities                               17,665       14,870
 Customer deposits and deferred revenues     7,307        6,358
Total current liabilities                   52,285       47,846

Long-term portion of capitalized lease
 obligations                                   390          787
Other long-term liabilities                  2,890          297
Total long-term liabilities                  3,280        1,084
Commitments                                   --            --

SHAREHOLDERS' EQUITY
Common stock, net, authorized
 100,000,000 shares
 Issued and outstanding 31,013,378 and
 30,586,125 shares                          85,000       84,764
 Cumulative translation adjustment             154         (348)
 Retained earnings                             495        5,228
Total shareholders' equity                  85,649       89,644

Total liabilities and
 shareholders' equity                     $141,214     $138,574

CONTACT: The Santa Cruz Operation, Inc.

Jeff Finn, 408/427-7671