Broderbund Software Reports Results for Fourth Quarter and Fiscal Year.

NOVATO, Calif.--(BUSINESS WIRE)--Oct. 9, 1996--Broderbund Software, Inc. (NASDAQ:BROD) announced today its operating results for the fiscal year and the quarter ended August 31, 1996. Revenues for the fourth quarter of fiscal 1996 were $32.2 million as compared with $37.2 million reported during the same quarter last year. During the quarter, the Company incurred a one-time charge of $8.4 million for the write-off of in-process technology in conjunction with the acquisition of T/Maker Company. Exclusive of this charge, the net income for the fourth fiscal quarter would have been $4.2 million or $.20 per share, as compared with the $7.2 million or $.33 per share earned in the fourth quarter of the prior year. After the one-time charge, the Company incurred a net loss for the quarter ended August 31, 1996 totaling $4.2 million or $.20 per share.

For the fiscal year, revenues were $186.2 million, up 9% from the $171.6 million reported for the prior fiscal year. Exclusive of the one-time charge from the acquisition of T/Maker Company and a one-time gain relating to a terminated merger, net income for the year ended August 31, 1996 would have been $35.9 million or $1.67 per share, as compared to $36.2 million or $1.72 per share reported for fiscal 1995. After the non-recurring adjustments, actual net income for fiscal 1996 was $36.8 million or $1.71 per share.

"We accomplished a lot in fiscal 1996. We sold more products and generated the highest level of sales in our history," said Doug Carlston, Chairman of the Board. "Our products are among the best in the consumer software industry. We completed the strategic acquisition of T/Maker, successfully integrated Banner Blue Software and signed several significant development contracts. However, we are not satisfied with our results. Our growth rate stalled this year as the consumer software market became more competitive and grew at a slower rate. While the near-term prospects remain challenging, we are optimistic regarding the long-term outlook for Broderbund as a leader in the consumer software market. To help us revitalize our growth in this environment, we recently hired Joe Durrett as our new Chief Executive Officer."

"I am really excited to join Broderbund. I am committed to increasing our market share through new product innovation and more aggressive sales and marketing programs," said Joe Durrett, Broderbund's newly appointed Chief Executive Officer. "I plan to use my background and experience managing companies with consumer brands to accelerate our product flow and to increase our market presence."

During fiscal 1996, Broderbund introduced Internet capabilities to many of the products in its line-up. The Company released 42 new titles during the fiscal year, as compared with 36 new titles last year. The quality and innovation of Broderbund's products have been recognized by the over 400 awards won by the Company's products.

This press release contains forward-looking statements. There are certain important factors that could cause results to differ materially from those anticipated by the statements made above. Among, but not limited to these, are the anticipation of growth of certain market segments, the positioning of Broderbund's products in those segments, the competitive environment in the consumer software industry, the competition and continuing uncertainties in the consumer software distribution channels, and the importance of successful and timely new Broderbund product releases. Additional information on these and other factors which could affect the Company's financial results are included in the Company's 1995 Annual Report to Stockholders and Form 10-K and its Form 10-Q for the first three quarters of fiscal 1996 on file with the Securities and Exchange Commission.

Broderbund is the market share leader in the highly competitive productivity software category with The Print Shop(R) series and Family Tree Maker(R). Also included in the Company's portfolio are the education and creativity software best-sellers Kid Pix(R) and Where in the World is Carmen Sandiego?(R). Myst(R), a top-selling software title, is part of Broderbund's entertainment line.

Broderbund Software, Inc. develops, publishes and markets a diversified line of consumer software for use in homes, schools and small businesses. Since its founding in 1980, Broderbund has pioneered innovative award-winning products that take advantage of the latest technologies. Broderbund has a successful track record of identifying and capitalizing on emerging trends through its studio development approach. Broderbund's web site is located at: http://www.broderbund.com.

Broderbund, The Print Shop, Family Tree Maker, Kid Pix, Where in the World is Carmen Sandiego? and Myst are registered trademarks of Broderbund Software, Inc. All other products are trademarks or registered trademarks of their respective companies. -0-

                       BRODERBUND SOFTWARE, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share data)
                             (Unaudited)

                            Three months ended        Year ended
                                August 31,             August 31,
                            1996        1995        1996       1995
                            ----        ----        ----       ----

Net revenues               $32,209    $37,183    $186,207    $171,594
Cost of revenues             8,302     10,982      58,544      61,092
                            ------     ------     -------      ------
Gross margin                23,907     26,201     127,663     110,502
                            ------     ------      ------      ------

Operating expenses:
 Sales and marketing         7,541      6,098      34,381      25,143
 Research and development    7,473      7,107      29,244      22,784
 General and administrative  2,535      2,776      11,256      11,085
                            ------     ------      ------      ------
  Total operating expenses  17,549     15,981      74,881      59,012
                            ------     ------      ------      ------

Income from operations       6,358     10,220      52,782      51,490

Interest and dividend
 income, net                 1,586      1,408       6,499       6,364
Terminated merger revenue,
 net                            --         --      15,464          --
Equity in earnings of joint
 venture                    (1,074)       707         217       3,886
In-process technology
 charge                     (8,369)        --      (8,369)         --
                            -------    ------      -------      -----

Income (loss) before
 income taxes               (1,499)    12,335      66,593      61,740

Provision for income taxes   2,679      5,143      29,816      25,553
                            ------      -----      ------      ------
Net income (loss)          $(4,178)   $ 7,192     $36,777     $36,187
                            ======     ======      ======      ======
Net income (loss)
 per share                 $ (0.20)   $  0.33     $  1.71     $  1.72
                            ======     ======      ======      ======
Shares used in computing
 per share data             20,680     21,679      21,509      21,037
                            ======     ======      ======      ======



                       BRODERBUND SOFTWARE, INC.
               CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)
                              (Unaudited)


                                August 31, 1996     August 31, 1995


ASSETS

Current assets:
 Cash and short term
  investments                        $150,893            $126,547
 Accounts receivable, net               5,956               7,880
 Income tax prepayments                    --                 487
 Inventories                            3,140               2,562
 Deferred income taxes                 15,057              13,880
 Other                                    869               1,186
                                      -------             -------
    Total current assets              175,915             152,542

Equipment and improvements, net         7,014               5,570
Deferred income taxes                      --                 928
Purchased technology and
 advances                              13,090                 761
Investment in affiliates                4,053               1,386
Other current assets                      360                 364
                                      -------            --------
                                     $200,432            $161,551
                                     ========            ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                     $ 4,442              $6,094
 Income taxes payable                   8,966                  --
 Other current liabilities             20,014              26,554
                                       ------              ------
   Total current liabilities           33,422              32,648

Other liabilities                       1,462                  21
                                      -------             ------
   Total liabilities                   34,884              32,669
                                      -------             ------
Stockholders' equity:
 Common stock                          31,384              31,140
 Retained earnings                    134,164              97,742
                                      -------              ------
 Total stockholders' equity           165,548             128,882
                                      -------             -------
                                     $200,432            $161,551
                                     ========            ========

CONTACT: Broderbund Software, Inc.

Robin Linstrom, 415/382-4449 (Investor Relations)

[e-mail]

Eric Winkler, 415/382-4568 (Public Relations)

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