Astea International announces third quarter 1996 results; 1996 third-quarter revenues increase 25 percent over prior year.

HORSHAM, Pa.--(BUSINESS WIRE)--Oct. 25, 1996-- Astea International (NASDAQ: ATEA), a leading supplier of customer interaction software, today announced financial results for the third quarter and first nine months of 1996.

For the third quarter ended September 30, 1996, the Company reported revenues of $17.5 million, a 25 percent increase over $14.0 million for the same period one year ago. Net income for the third quarter of 1996 was $0.09 million, or $0.01 per share, compared with pro forma net income of $1.3 million, or $0.10 per share, in last year's third quarter.

Weighted average shares outstanding in the third quarter of 1996 were 13.6 million shares versus 12.4 million shares in the third quarter of 1995.

For the nine months ended September 30, 1996, Astea's revenues were $43.9 million, compared with $36.7 million in the same period in 1995. The Company reported a pro forma net loss of $2.2 million, or $0.18 per share, for the first nine months of 1996, compared with net income of $3.0 million, or $0.28 per share, for the same period one year ago.

Astea's pro forma net loss for the first nine months of 1996 does not include a previously announced one-time charge for purchased research and development of approximately $13.8 million, or approximately $1.08 per share, for the acquisition of Abalon AB in June 1996. Astea's 1996 and 1995 financial results include the results of Bendata, Inc., which merged with Astea in February 1996 and was accounted for as a pooling of interests. Astea's 1996 third-quarter financial results include the results of Abalon AB, which Astea acquired in June 1996 and was accounted for as a purchase transaction.

Zack B. Bergreen, president and chief executive officer of Astea, commented, "Astea's third-quarter revenues reflect the addition of new customers, such as our previously announced contract with Philips Medical Systems, as well as increased sales to existing customers. During the quarter, we continued to build a stronger global infrastructure by integrating both Bendata and Abalon into our operations, expanding our U.S. sales force with the addition of three new sales representatives, implementing marketing programs designed to generate demand for our product lines, and enhancing the Internet capabilities of DISPATCH-1."

Bergreen continued, "One of the highlights of the third quarter was the ninth annual ADONUS Conference for Astea users, where Abalon's Sellplan product was received enthusiastically by attendees. We also were pleased to see that our customers continue to be excited about Astea's World Wide Web capabilities for DISPATCH-1, our field service software solution. Also during the quarter, Bendata released HEAT version 3.0 with new features and advanced functionality for the help desk software marketplace. In addition, the quarter was marked by Astea's announcement of an exclusive Japanese distribution partnership with Nissho Iwai. Our relationship with Nissho Iwai, one of the world's ten largest companies, is an important element in our strategy to expand our presence in the Asia/Pacific region."

Bergreen concluded, "We continue to be encouraged by the opportunities we see in the emerging customer interaction software market. As a result, it is important that we continue to invest significantly in the expansion of our sales, marketing and product development initiatives. Complementing these activities, Astea plans to leverage the depth and breadth of our product lines through cross selling into our installed customer base while also building our presence within key vertical markets. Additional elements in our plans for the expansion of our business worldwide will be the launch in the U.S. market of Sellplan, our sales automation solution, and the establishment of strategic alliances and relationships with integrators and distributors. We believe that the successful implementation of these initiatives during the fourth quarter and into 1997 will enable Astea to continue to grow and build on its leadership position in the customer interaction software market."

Astea International develops client/server-based customer interaction software that enables organizations to automate their customer support, field service and sales operations. With more than 550 employees worldwide, Astea markets its products through a direct sales and services network throughout North America, Europe, Israel, Asia, Australia and New Zealand. The Company s customer base of approximately 2,300 companies and 40,000 end users includes such industry leaders as Seimens Rolm; the Swedish PTT; Chevron; and EDS. Astea can be reached at [phone]; via e-mail at [e-mail] or via the World Wide Web at http://www.astea.com.

This press release contains forward-looking statements which are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties that could materially affect future results. Among these risk factors are Astea's ongoing dependence on large license fee contracts and the lengthy sales cycle and timing of orders for these contracts, continuing acceptance of Astea's products, the company's ability to grow from the sales of these products, successful integration of the acquired Abalon and Bendata businesses, the successful launch of Astea's sales automation solution in markets outside Scandinavia, the establishment of strategic relationships with distributors and systems integrators, general competitive pressures in the marketplace, and the continued overall growth in the customer interaction software industry. Consequently, the Company's results may fluctuate. Further information regarding these as well as other key risk factors and meaningful cautionary statements which could affect the Company's financial results are included at length in the Company's Forms 10-Q for the fiscal quarters ended March 31, 1996 and June 30, 1996, and Form 10-K for its fiscal year ended December 31, 1995, each filed with the SEC; and the Company's registration statements filed with the SEC and deemed effective on July 27, 1995 and September 23, 1996. The Company assumes no obligation to update the information contained in this press release.

                          ASTEA INTERNATIONAL INC.
                         Statements of Income (1)
                 (In thousands, except per share amounts)
                              (unaudited)

                              Three months           Nine months
                             ended Sept. 30,        ended Sept. 30,
                             1996      1995        1996        1995
Revenues:

 Software license fees     $8,164    $7,600     $19,533     $19,952
 Services and maintenance   9,326     6,430      24,335      16,740
   Total revenues          17,490    14,030      43,868      36,692

Costs and expenses:
 Cost of software license
  fees                      1,001       989       2,631       2,774
 Cost of services and
  maintenance               6,387     4,288      16,196      11,339
 Product development        2,147     1,001       5,968       2,656
 Sales and marketing        5,746     3,983      15,779      10,099
 General and administrative 2,079     1,751       7,423       4,715
   Total costs and
    expenses               17,360    12,012      47,997      31,583

Income (loss) from operations
 before nonrecurring items    130     2,018      (4,129)      5,109

Nonrecurring expenses related
 to merger transaction (2)     --        --       3,416          --
Charge for purchased research
 and development (3)           --        --      13,810          --

Total nonrecurring items       --        --      17,226          --

Income (loss) from operations 130     2,018     (21,355)      5,109
Net interest income/(expense) 113       193         622        (118)
Income (loss) before income
 taxes                        243     2,211     (20,733)      4,991
Income taxes (benefit) (4)    156       479      (1,613)        534
Net income (loss)             $87    $1,732    $(19,120)     $4,457

Pro forma information (5)
Pro forma income (loss)
  before income taxes         243     2,211      (3,507)      4,991

Pro forma income taxes
 (benefit)                    156       924      (1,275)      2,025

Pro forma net income (loss)    87     1,287      (2,232)      2,966

Pro forma net income (loss)
 per common and common
 equivalent share           $0.01     $0.10      $(0.18)      $0.28

Shares used in computing
 per share amounts         13,608    12,419      12,754      10,653

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The accompanying notes are an integral part of these statements.

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                          Astea International Inc.
                Notes to consolidated financial statements

(1) On June 28, 1996, the Company completed an acquisition with
Abalon AB (Abalon).  The Company acquired all of the capital stock of
Abalon for approximately $16 million (including transaction costs) in
a combination of cash and the Company's common stock.  The
acquisition was accounted for as a purchase transaction.  The total
purchase price was allocated to the assets acquired and liabilities
assumed based on their respective fair values.

On February 27, 1996, the Company completed a merger with Bendata,
Inc. (Bendata).  The Company exchanged 1,500,000 shares of its
common stock for all of Bendata's outstanding capital stock in a
merger accounted for as a pooling of interests.  All financial data
has been restated to include Bendata for each period presented.

(2) In connection with the Bendata merger, $3,416,000 of merger
expenses ($2,609,000 after-tax) were incurred and charged to expense
in the first quarter of 1996.  The merger expenses consisted of
merger related bonus payments made to Bendata non-shareholder
employees as well as legal, accounting and investment banking fees.

(3) In connection with the Abalon purchase, the Company recorded
approximately $13.8 million of the purchase price as a charge to
expense on the acquisition date as it was related to the fair value
of incomplete research and development projects.

(4) During the first seven months of 1995 for Astea and the first
nine months of 1995 for Bendata, they were taxed under subchapter S
of the Internal Revenue Code, therefore, income taxes includes a
provision for certain states which do not recognize S-corporation
status.  Income taxes for the first quarter of 1996 includes a charge
of $575,000 for the reinstatement of a deferred income tax liability
for Bendata caused by the termination of Bendata's S corporation
status as a result of the merger.  Excluding this charge, the Company
recorded an income tax benefit of $267,000, or an effective tax rate
of 15.5%.  This income tax benefit was reduced due to the
non-deductibility of certain merger expenses.

(5) The pro forma information excludes the one-time charge for
purchase of research and development costs of $13,810,000, the merger
expenses of $3,416,000 ($2,609,000 after-tax) and the one-time tax
charge of $575,000 due to the conversion of Bendata from an S
corporation to a C corporation as a result of the merger.  The pro
forma income taxes reflected above were calculated as if the
companies were C corporations for the periods presented using the
criteria established under the Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes.

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                      ASTEA INTERNATIONAL INC.
                    Condensed Balance Sheets (1)
                         (In thousands)
                          (Unaudited)

                                    September 30,       December 31,
                                        1996                1995
Assets

Current Assets:

 Cash and cash equivalents            $    3,523         $    4,021
   Investments available for sale         12,631             30,822
   Receivables, net of reserves           18,183             21,560
   Prepaid expenses and other              2,429              1,917
   Prepaid taxes                           1,911                - -
   Deferred income taxes                   3,073              1,194

   Total current assets                   41,750             59,514

Property and equipment - net               8,360              5,822
Capitalized software - net                 3,257              1,713
Goodwill                                   3,228              2,321

Total assets                          $   56,595         $   69,370

Liabilities and Stockholders' Equity
 Current Liabilities:

  Line of credit                       $   1,400         $    1,200
   Current portion of obligations
    under capital leases                     178                 97

  Accounts payable and
    accrued expenses                       9,971              9,613

  Deferred revenues                        6,260              7,872

  Total current liabilities               17,809             18,782

Deferred income taxes                        900                136

Noncurrent portion of obligations
 under capital leases                      2,834              2,532

Other noncurrent commitments               1,000                - -

Stockholders' Equity                      34,052             47,920

Total Liabilities and
 Stockholders' Equity                $    56,595        $    69,370

-0-

The accompanying notes are an integral part of these statements.

CONTACT: Astea International

Dianne M. Durkin, 617/275-5440

or

Len von Vital, 215/682-2500