Abacus Direct Reports Record 4th Quarter & Year-End Results; 1998 Revenues & Net Income Up 52%.

WESTMINSTER, Colo.--(BUSINESS WIRE)--Feb. 3, 1999--Abacus Direct Corporation (NASDAQ: ABDR) today announced record revenues and earnings for the fourth quarter and for the year ended December 31, 1998.

Revenues for the fourth quarter were $12.5 million, a 44% increase over revenues of $8.7 million for the same period a year ago. Net income was $2,946,000, or $0.29 per diluted share, up 43% from $2,055,000, or $0.20 per diluted share, reported for the same period a year ago.

Revenues for 1998 were $47.0 million, a 52% increase over revenues of $31.0 million for the same period last year. Net income was $11,426,000, or $1.12 per diluted share, a 52% increase over net income of $7,497,000, or $0.74 per diluted share for the same period last year.

Commenting on these results, Tony White, Chairman & CEO, said, "We are extremely pleased that our fourth quarter performance delivered yet another quarter of record results. By almost any measure, 1998 was the most successful year in Abacus' history. We achieved record revenues and profitability, welcomed our 1,000th participant to the Abacus Alliance, introduced a proprietary network with a direct link to Alliance members, exceeded our targets for direct marketing initiatives outside consumer catalogs, and expanded our senior management and Board of Directors. In terms of partnerships, we just entered into a new marketing alliance with Harte-Hanks, initiated a European joint venture with VNU and completed our first Internet alliance with Catalog City."

Mr. White stated, "Our record profits during the quarter and year reflects our ability to help our clients target new and existing customers. Our fourth quarter revenue increase was lead by strong growth in Housefile scoring of 96% and Optimization of 75%. Our highly profitable business model allowed us to fund continued growth in our core consumer catalog services, increase our investment outside consumer catalogs, while at the same time expanding operating margins and increasing cash flow."

The number of titles in the Abacus Alliance increased by 46 during the quarter, exceeding the quarterly target of 25. The fourth quarter additions bring the total catalog titles in the Alliance to 1,052 (excluding participation from companies/titles outside consumer catalogs) and increased the gap in number of participating titles between Abacus and its closest competitor to approximately 700. Mr. White continued, "This lead reflects the benefits of having been the first cooperative database company to attain critical mass of data. We believe the number of participating titles in the Alliance, the large size of our database, and our highly scaleable modeling platform are our most valuable assets. In 1999, we remain committed to our goal of acquiring more titles, accreting transactions to our database and providing more value to our customers."

"We made substantial progress in growing revenues and acquiring new clients in direct marketing initiatives outside consumer catalogs. We exceeded our revenue goals for the fourth quarter and the year, and we participated in direct mail tests with approximately 350 companies/titles. Of these, approximately 200 companies/titles have already joined the Abacus Alliance and are contributing data." The data contribution from these companies is incremental to the 1,052 consumer catalog titles in the Alliance. As stated previously, these initiatives include retail, business to business catalogs, publishing, financial services, telecommunications and fund raising.

Commenting on Abacus' European joint venture, Mr. White said, "We have an experienced leader heading our European JV, and he has recruited a strong staff from both Abacus and VNU. The staff is concentrating its initial efforts on technical issues associated with creating a database, recruiting clients, and gaining market acceptance for the Abacus model. I recently had the opportunity to present the Abacus model to a large number of direct mailers in the UK and was pleased with how well our new venture is being received. These direct mailers are looking for effective targeting services to help them find new customers."

Abacus also expanded its Board of Directors with the appointment of Robert L. North, President, Chief Executive Officer of HNC Software, Inc. Mr. White continued, "We are very pleased to have Bob North as an Abacus director. As CEO of one of the leading predictive software solutions companies for over 10 years, Bob fully understands the value of being able to predict consumer behavior and deliver quantifiable results to clients. He has also led HNC through a period of rapid revenue growth. Given his exceptional background, we look forward to his contributions and the value he will bring to our Board."

Mr. White concluded, "We took significant steps in 1998 to position Abacus for future growth. In 1999, we plan to continue expanding distribution by increasing our sales force in all areas and to enter into strategic partnerships to leverage existing relationships. We will also look to strategic partnerships to introduce new Internet-based capabilities during the year."

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 implementation and success of the Company's new initiatives, strategic alliances and joint ventures, and the likelihood of incremental revenues offsetting 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, adoption of new laws and regulations, 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


                          Three Months Ended     Twelve Months Ended
                              December 31,           December 31,
                          -------------------    --------------------
                            1998       1997        1998        1997
                          --------   --------    --------    --------
Net revenues           $12,521,585 $8,704,241 $46,979,184 $30,971,183
Cost of revenues         2,979,667  1,714,715   9,581,248   5,942,482
                          --------   --------    --------    --------
  Gross profit           9,541,918  6,989,526  37,397,936  25,028,701

Other operating costs
  Selling and marketing  3,202,596  2,240,358  12,627,546   7,999,652
  General and
    administrative       1,400,907  1,148,553   4,928,123   3,911,224

  Research and development 440,210    466,961   1,690,948   1,506,960

  Facility relocation and
    other                        -          -     360,000     101,833
                          --------   --------    --------    --------
  Total operating
    expenses             5,043,713  3,855,872  19,606,617  13,519,669

Income from operations   4,498,205  3,133,654  17,791,319  11,509,032

Equity in earnings (losses)
  of joint venture         (53,452)         -     (53,452)          -
Interest and other income
  (expense), net           258,991    102,149     754,917     297,115
                          --------   --------    --------    --------
Income before income
  taxes                  4,703,744  3,235,803  18,492,784  11,806,147
Provision for income
  taxes                  1,757,615  1,181,095   7,066,396   4,309,280
                          --------   --------    --------    --------
  Net Income            $2,946,129 $2,054,708 $11,426,388  $7,496,867
                          ========   ========    ========    ========

Net income per common
  share -- basic             $0.30      $0.21       $1.17       $0.78
Net income per common
  share -- diluted           $0.29      $0.20       $1.12       $0.74

Weighted average number
  of outstanding common
  shares -- basic        9,801,801  9,617,878   9,726,937   9,546,079

Weighted average number
  of outstanding common
  shares -- diluted     10,271,750 10,123,373  10,216,143  10,057,610

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