Abacus Direct Delivers Record Quarterly Results; Net Income up 66% on Revenue Growth of 57%.

WESTMINSTER, Colo.--(BUSINESS WIRE)--July 22, 1998--Abacus Direct Corporation (Nasdaq: ABDR) today announced record revenues and net income for the second quarter and for the six months ended June 30, 1998.

Revenues for the second quarter were $9.4 million, a 57% increase over revenues of $6.0 million for the same period a year ago. Net income was $1,801,000 or $0.18 per diluted share, up 66% from $1,085,000, or $0.11 per diluted share, reported for the same period a year ago.

For the first half of 1998, revenues were $18.4 million, a 60% increase over revenues of $11.5 million for the same period last year. Net income was $3,490,000, or $0.34 per diluted share, a 69% increase over net income of $2,065,000, or $0.21 per diluted share for the same period last year.

Commenting on these results, Tony White, Chairman & CEO, said, "We are pleased to have delivered record results to our shareholders again. Historically, the second quarter has been challenging as catalogers frequently adjust their mailing campaigns prior to the seasonally strong third quarter. We met this year's second quarter challenge with record revenues, margins and profits. All of our core services showed solid results with Optimization and Housefile leading the way with growth rates of 85% and 54%, respectively."

White continued, "We are delighted to report that 53 new participants joined the Abacus Alliance during the quarter. These new additions bring the total number of titles in the Alliance to 977. As we approach 1,000 participants, we are keenly aware that our success depends on our ability to provide superior, measurable results to our customers. To that end, we plan to continue expanding our sales force and increasing our investment in technical resources."

White expanded, "Cost of revenues and operating expenses increased 54% over last year's second quarter and were on target with our plan. Our operating margin for the second quarter was 28.5%, up from 27.6% for the same period a year ago. For the six months ended June 30, our operating margin was 28.1% versus 27.2% for the same period a year ago. The operating expense increase was principally due to new hires in our sales and support staff, additions to our production services staff, and increased spending in our technology development area; investments designed to keep our growth momentum going. During the second quarter, we added 11 new employees, bringing our total headcount to 196, a 59% increase over the same period a year ago. Most of our 41 new hires in 1998 have been placed in direct sales positions or support areas responsible for fulfilling customer orders."

White added, "We are continuing to execute our operating plan and are beginning to see the benefits of aggressive first quarter investments in sales and support staff. The third quarter will be the first full quarter in which the majority of our new sales hires will be out of training and fully dedicated to customer accounts, reducing the number of accounts per sales person. This increased level of service is designed to contribute to higher sales in subsequent quarters."

Referring to the new market initiatives, White said, "Our stated goal for 1998 is to generate sufficient revenues (by year end) in markets outside consumer catalogs to cover operating costs  associated with developing these new initiatives and to establish Abacus as a viable source for lists and data in a number of new markets. Year to date progress in these new areas has exceeded our stated goal. For example, testing revenues for the first six months of the year exceeded operating expenses, and we believe our services have been well received by major participants in business and technology, telecommunications, retail, financial services, fund raising, and publishing. While we are pleased with the progress to date, these initiatives are still emerging, and it is still too early to reasonably quantify our potential in these markets."

White concluded, "Our operating focus for the second half of 1998 remains on expanding the Abacus Alliance in terms of members and depth of transactional data. At the same time, we are committed to improving performance and service to our existing customer base. We are pleased with our performance during the first half of 1998, and we believe the strong demand for our services will allow us to continue executing our operating plan."

Abacus Direct Corporation is a leading provider of information products and marketing research services to the direct marketing industry.

This news release contains forward-looking statements that involve risks and uncertainties, including the reception of new products and technologies, the expansion of the Abacus Alliance, the increase in product sales, the success of the Company's new initiatives and the likelihood of incremental revenues continuing to offset expenses related to those new initiatives. The Company's actual results could differ materially from those discussed in such forward-looking statements based on a variety of factors including, but not limited to, the actions of current and potential new competitors, changes in technology, the seasonality and cyclical  nature of the industry, changes in postal rates and paper prices, the nature and amount of the Company's revenues and expenses, and overall economic conditions. Other risks are reflected in the Company's filings with the Securities and Exchange Commission. -0-

                       ABACUS DIRECT CORPORATION
                  STATEMENT OF OPERATIONS  UNAUDITED
                            (In thousands)

                                Three Months Ended   Six Months Ended
                                      June 30,            June 30,
                                   1998      1997      1998      1997

Net revenues                     $ 9,367   $ 5,986   $18,449   $11,511
Cost of revenues                   2,256     1,285     4,227     2,589
                                 -------   -------   -------   -------
  Gross profit                     7,111     4,701    14,222     8,922

Other operating costs
  Selling and
    marketing                      2,911     1,859     5,936     3,365
  General and
   administrative                  1,123       846     2,244     1,715
  Research and
  development                        409       346       851       711
                                 -------   -------   -------   -------
Total operating
 expenses                          4,443     3,051     9,031     5,791

Income from operations             2,668     1,650     5,191     3,131

Interest and other
 income (expense),
 net                                 168        58       305       121
                                 -------   -------   -------   -------
Income before
  income taxes                     2,836     1,708     5,496     3,252
Provision for
  income taxes                     1,035       623     2,006     1,187
                                 -------   -------   -------   -------
    Net Income                   $ 1,801   $ 1,085   $ 3,490   $ 2,065
                                 =======   =======   =======   =======

Net income per
 common share
  basic                         $  0.19   $  0.11   $  0.36   $  0.22
Net income per
 common share
  diluted                       $  0.18   $  0.11   $  0.34   $  0.21

Weighted average
 number of
 outstanding
 common shares
  basic                           9,712     9,531     9,692     9,518

Weighted average
 number of
 outstanding
 common shares
  diluted                        10,236     9,984    10,202     9,992


    Note:  Certain prior period amounts have been reclassified to comply
with the current year presentation.



   CONTACT:  Abacus Direct Corp., Westminster
              Investors/Analysts: Carlos Sala [phone]
              Media: Cindi Gallucci [phone]