Carleton Announces Second Quarter Results.

MINNETONKA, Minn.--(BUSINESS WIRE)--Oct. 21, 1998--Carleton (NASDAQ:CARL) today reported revenues of $1.01 million for its second quarter ended September 27, 1998, an increase of 88% over the same quarter a year ago. The Company recorded an operating loss from continuing operations for the quarter of $(.60) per share, compared to an operating loss of $(.45) per share in the same quarter a year ago. The per share amounts reflect the one-for-five reverse stock split effected by the Company in September 1998. The Company's balance sheet reflects $4.7 in million of working capital, including $7.8 million of cash.

"After a year of reorganization and repositioning, the Company is now poised to take advantage of the market we identified in November 1997. The Company has clear market positioning, a compelling product solution and strong market response as gauged by pipeline growth and analyst feedback. We have invested heavily over the last 12 months in developing and marketing a new generation of products for creating customer data repositories for analytical and customer relationship management applications," said Robert D. Gordon, chairman, chief executive officer and president of Carleton. "Industry analysts expect this market to be driven by a major wave of business spending on customer relationship management systems. While the results to date are not what we like to see, the Company is well positioned to succeed and fulfill its 'Pure data Pure results' mission. The reward for the investments of the last year should be evident in the coming quarters."

"The Company is working aggressively to build marketplace awareness of the new Carleton," continued Gordon. "Focused marketing initiatives, emphasizing a strong business oriented sales message, are resulting in a steady stream of leads and a growing pipeline with well over 100 qualified prospects. The number of customer references and case studies continue to grow and the sales team has been strengthened with the addition of several experienced sales representatives. In addition, the Company has aligned itself with powerful business partners, including CSC, Sybase and SAIC. Successful implementations at organizations such as Federal Express, 3M, Cargill, Bestfoods and Virginia Department of Transportation reinforce the value of our solutions."

The information in this press release contains forward-looking statements that involve risks. Carleton cautions readers that actual results could differ materially from results suggested by these statements. Factors that could cause actual results to differ are discussed in the Company's annual report or Form 10-K for the year ended March 29, 1998.

About Carleton

Carleton provides data integration solutions for rapid deployment of business critical applications, such as data warehousing and application conversions. The Company markets its products and services to Fortune 1000 clients in industries such as financial services, insurance, health care and manufacturing. Headquartered in Minnetonka, Minnesota, Carleton distributes its technology and consulting services through direct sales and channel partners worldwide. For more information, call 800-328-3998, send e-mail to [e-mail] or visit Carleton's web site at http://www.carleton.com. Pure data Pure results

All brand names and products names are trademarks or registered trademarks of their respective companies.

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CONSOLIDATED STATEMENTS
OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)

                                    Three                  Six
                                 Months Ended         Months Ended
                              Sept 27,   Sept 28,   Sept 27,  Sept 28,
                                1998       1997       1998      1997
Revenues
     Sales                   $   513    $   433    $ 1,428   $   624
     Maintenance and Other       499        103        906       191
     Total                     1,012        536      2,334       815

Costs and Expenses
     Cost of revenues            671        418      1,297       857
     Research, development
       and engineering           942        492      1,903       981
     Selling, general and
       administrative          1,487        977      2,995     1,908
     Total                     3,100      1,887      6,195     3,746
Loss from operations          (2,088)    (1,351)    (3,861)   (2,931)

Investment income                108        109        260       236
Interest expense and other       (15)       (37)       (31)      (34)

Loss from continuing
  operations before
  income taxes                (1,995)    (1,279)    (3,632)   (2,729)
Income taxes                       0          3          0         5
Net loss from continuing
  operations                  (1,995)    (1,282)    (3,632)   (2,734)

Discontinued operations:
     Income from operations of
     discontinued Internet
     Solutions Division            0        303          0     1,228

Net Loss                   ($  1,995)  ($   979) ($  3,632)($  1,506)

Income (Loss) per Share:
     Continuing Operations  ($  0.60) ($   0.45) ($   1.09)($   0.96)
     Discontinued
       Operations               0.00       0.11       0.00      0.43
     Total                  ($  0.60) ($   0.34) ($   1.09)($   0.53)

Weighted Average
 Shares Outstanding            3,343      2,846      3,333     2,839



CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)

                                              (Unaudited)
                                              September 27,  March 29,
                                                  1998         1998

ASSETS

Current Assets
      Cash and cash equivalents               $  7,764     $ 11,111
      Cash in escrow                                61          730
      Accounts receivable - net                    628        1,517
      Other                                        150           76
      Total current assets                       8,603       13,434

Property and equipment                           4,313        4,649
Accumulated depreciation                        (3,080)      (3,256)
Property and equipment - net                     1,233        1,393

                                              $  9,836     $ 14,827

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
      Accounts payable                        $    366     $    319
      Accrued expenses                           1,816        3,067
      Deferred revenue                             696          809
      Note payable                               1,000        1,000
      Total current liabilities                  3,878        5,195

Long-term Notes Payable                            506          602

Shareholders' Equity
     Common stock - authorized,
       6,000,000 shares at $.25 par value;
       issued and outstanding at
       September 27, 1998 - 3,343,266 shares
       March 29, 1998 - 3,305,363 shares           836          826
     Additional paid-in capital                 62,768       62,723
     Retained deficit                          (58,152)     (54,519)
     Total shareholders' equity                  5,452        9,030

Total                                         $  9,836     $ 14,827