Boole & Babbage reports record earnings; Q2 new revenue growth was 23%; Operating income increased 22% with net income at a record level; EPS increased 18% to a record $.46; Cash grew to a record level of $41.7 million.

SAN JOSE, Calif.--(BUSINESS WIRE)--April 27, 1995--Boole & Babbage, Inc. (NASDAQ:BOOL) announced record net income and earnings per share for its second quarter of fiscal 1995.

Second quarter revenues were $37,253,000 or a 16% increase over the fiscal 1994 revenues of $32,023,000. Operating income was up 22% to $4,054,000 compared to 1994's second quarter. Net income rose by 30% to a record $3,570,000 due to higher interest income. After the effect of 8% more shares outstanding, related earnings per share increased 18% to a record $.46, compared to $.39 last year.

For the six months ended March 31, 1995, licensing revenue was up 29% with total revenue up 20% to $75,826,000. Operating income increased by 24% and earnings per share was up by 27% to $.90 compared to $.71 last year.

"Our client/server product line had record new revenues and growth of 55% this past quarter," said Paul E. Newton, President and CEO. "We also showed continued strength in our mainframe products which grew by 15%. Since both of these product areas were up against record sales in the year ago quarter, we are very pleased with these results. Helped by a weaker U.S. Dollar, we showed strong license growth of nearly 40% in our international markets. In North America, after a strong first quarter, licenses declined 8% but still showed a solid 14% growth rate for the first half of this year.

"During the second quarter our sales and marketing costs increased at the same rate as our new revenue as we continued to invest in our sales channels and key marketing programs to help increase future revenue growth. For instance, we successfully completed a 50-city seminar series for our distributed systems management products. As part of our alternate distribution channel strategy, we signed up our first VARs and expanded our list of marketing partnerships.

"On the product development front, we released a new version of Ensign which now runs on all leading UNIX platforms. With this high degree of interoperability, Ensign has recently been certified by Hewlett-Packard to be part of their H-P OpenView Premium Solutions Partner program. This interoperability with leading frameworks was also demonstrated by both COMMAND/POST and Ensign as we became members of the NetView Association sponsored by IBM. In addition, we began shipping ported versions of COMMAND/POST running on IBM's AIX platform in order to help leverage our traditional customer base.

"In our internal data center we just installed one of the new CMOS-based parallel processors from IBM. In addition to increasing our general processing capability, this processor will further enhance the ongoing development investment in our unique plex products which exploit this exciting new technology.

"Our cash flow was exceptional this quarter as strong collection efforts reduced our trade DSO to 67 days. This helped produce a record cash balance of $41.7 million which is up by 68% from a year ago, providing substantial resources for future expansion. Thus, both operationally and financially, we've had an active, profitable start for the new fiscal year," Newton concluded.

Boole & Babbage is the worldwide leader in Enterprise Automation software for distributed systems. The Company is committed to supporting open systems and the growing client/server market to help IS organizations reduce costs and increase systems availability. Boole & Babbage maintains strategic alliances with Hewlett-Packard, IBM and other industry leaders to ensure its customers the most powerful, efficient solutions. Founded in 1967, Boole & Babbage sells more than 40 products in North America, Europe, Asia, Japan, Australia and Latin America. -0-

        Condensed Consolidated Statements of Income (Unaudited)
              (In thousands, except per share amounts)

                                                   Six Months
                         Q295        Q294        FY95      FY94

Revenues                $37,253     $32,023    $75,826   $63,140
Costs and expenses       33,199      28,712     67,601    56,490
Operating income          4,054       3,311      8,225     6,650
Other income              1,116         685      1,747       691
  Pretax income           5,170       3,996      9,972     7,341

Income taxes              1,600       1,240      3,090     2,275
Tax rate                   31.0%       31.0%      31.0%     31.0%
  Net income            $ 3,570     $ 2,756    $ 6,882   $ 5,066
Earnings per share     46 cents    39 cents   90 cents  71 cents
Shares outstanding        7,700       7,110      7,615     7,100

           Condensed Consolidated Balance Sheets (Unaudited)

                             March 31,     Sept. 30,    Mar. 31,
                              1995           1994        1994

Cash                        $ 41,658      $ 34,019      $ 24,865
Trade receivables             22,926        23,180        19,270
Lease and other receivables   44,864        38,262        33,594
Furniture and equipment        8,174         8,506         8,553
Capitalized software          13,273        14,276        13,812
Other                         13,925        13,383         9,478
   Total Assets             $144,820      $131,626      $109,572

Accrued expenses            $ 30,529      $ 30,200      $ 24,884
Other liabilities              4,810         6,357         6,590
Deferred maint. income        52,785        46,905        37,659
Stockholders' equity          56,696        48,164        40,439
   Total Liabilities and
    Equity                  $144,820      $131,626      $109,572
-0-

CONTACT: Boole & Babbage Inc.

Arthur Knapp, 408/526-3333