Centra Reports Record Revenue in Fourth Quarter 2001; Full Year Revenue Increases 70 Percent Over Prior Year.

Business & High-Tech Editors

LEXINGTON, Mass.--(BUSINESS WIRE)--Jan. 24, 2002

Fourth Quarter Gross Margin Rises to 84 Percent;

Signs 97 New Customers; Grows Total Customer Base to 775;

$1M Cash Flow Positive in Fourth Quarter

Centra Software, Inc. (NASDAQ: CTRA), the world's leading provider of business software solutions for eLearning and collaboration, today announced results for the fourth quarter and full year ended December 31, 2001.

Led by a record 97 new accounts, Centra's revenue climbed to $11.0 million in the fourth quarter. This represents a 41 percent increase over the same period last year, and 20 percent sequential growth over the third quarter of 2001. On a pro forma basis, excluding non-cash stock-based compensation expense, amortization of goodwill and other intangible assets, net loss for the fourth quarter of 2001 was $1.9 million, or $0.08 per share, compared to a pro forma net loss of $3.2 million, or $0.14 per share reported in the fourth quarter of 2000. This was a significant improvement over the pro forma net loss of $3.3 million or $0.13 per share in the third quarter of 2001. Net loss for the fourth quarter of 2001 was $2.6 million, or $0.10 per share, compared with a net loss of $3.4 million, or $0.15 per share, for the same period last year.

The Company's 2001 fourth quarter gross margin increased to 84 percent, a 400 basis point improvement from the third quarter. The higher gross margin percent was attributed to increased margins on Centra's outsourced application service (ASP) and its professional services business during the fourth quarter.

"We had a solid fourth quarter as demand for Centra's solutions continued to grow, and as we continued to win the majority of the competitive evaluations that we participated in. In addition, we grew our market share by signing a record number of new customers in the fourth quarter, including most of the deals that were delayed by economic concerns in the third quarter," said Leon Navickas, Chairman and Chief Executive Officer. "This past year we grew our international sales and our ASP business according to plan, extended our platform with the acquisition and successful integration of Mindlever, generated significant traction and momentum in sales of the Knowledge Products, and achieved Centra's first cash-flow positive quarter."

Software license revenue, which accounted for 69 percent of total revenue for the quarter, was $7.6 million, a 21 percent increase over the same period last year and an 18 percent increase over the prior quarter. Services revenue for the quarter, driven by a surge in demand over the second half of 2001 for the Company's products delivered on a subscription basis (ASP), increased by 24 percent over the previous quarter to $3.4 million.

Fourth Quarter 2001 Highlights

-- Centra shipped CentraOne(TM)5.3, providing significant new recording
capabilities and out-of-the-box support for Centra Knowledge Catalog(TM), a
unique product extension that gives users instant access to a searchable,
self-service library of knowledge objects, Centra recordings, and other
third-party content from their event homepage. These major enhancements to
CentraOne further reinforce the online learning experience, and maximize
investments in eLearning through unparalleled support for standards that ensure
interoperability and content reusability across a broad range of live and
self-paced delivery formats.

-- Centra continued to strengthen its partner ecosystem while deepening
relationships with KPMG and PwC Consulting - two of the world's largest
professional services firms. In Q4, KPMG Consulting Europe announced the
integration of Centra into a new end-to-end Interactive Learning Solution
(iLS), and PwC Consulting selected Centra to provide eLearning and real-time
collaboration capabilities to Global 2000 customers through a new business
initiative known as B2E (business-to-extended-enterpr ise). New solution
partnerships in Q4 included agreements with Blackboard, DK Systems, Edcor,
ePharmaLearning, Epiance, Forum Corporation, GP e-Learning Technologies,
Plateau Systems, and Richardson.

-- Bolstering a growing international presence, Centra established a sales
office in Germany, increasing its ability to acquire and manage clients in one
of the fastest growing markets in Europe. Working closely with its local
distribution partner, TERTIA Edusoft GmbH, Centra has added some of the most
prestigious organizations in Germany to its customer list, including Deutsche
Telekomm, Siemens AG, and Sony Europe GmbH. In Asia, a newly formed eLearning
Initiative Group (eIG), comprised of Oracle Corporation, Global Knowledge, CSK
Corporation, and Macnica, Centra's exclusive distribution partner in Japan,
announced that it will underpin its offerings with Centra's real-time
collaboration platform to accelerate the adoption of eLearning and
collaboration within corporations across Japan. Centra also added four new
distribution partners to its international indirect sales channel in Q4,
expanding coverage in the Nordics and Latin America.

-- The CentraOne Web collaboration platform won a prestigious MIMC Award for
Best Enterprise Application, citing capabilities that "revolutionize the way
businesses learn and work together virtually." In October, Centra's CEO, Leon
Navickas, was named to this year's elite list of Massachusetts High Tech
All-Stars, recognized for his vision in bringing real-time interaction and
collaboration to the Internet, his leadership and innovation in building
Centra, and his success in making Centra the leader for eLearning and business
collaboration.

Full Year Results

Centra signed a record number of customers during 2001 with 334 new accounts, and recorded revenue of $39.1 million, a 70 percent increase over the same period last year. On a pro forma basis, excluding non-cash stock-based compensation expense, a one-time non-operating charge in the first quarter related to losses from short-term investments, the write-off of acquired in-process research and development, amortization of goodwill and other intangible assets, net loss for the full year ended 2001 was $11.5 million, or $0.47 per share, compared to a pro forma net loss of $12.9 million, or $0.57 per share reported in 2000. Net loss for the year ended December 31, 2001 was $16.7 million, or $0.68 per share, compared with a net loss of $14.5 million, or $0.67 per share, for the same period last year.

SmartForce PLC Merger

As previously announced, Centra entered into a definitive agreement to be acquired by SmartForce PLC (NASDAQ: SMTF) in a stock merger in which each outstanding share of common stock of Centra will be exchanged for 0.425 American Depositary Shares of SmartForce. The merger is subject to approval by the stockholders of both companies and to other customary closing conditions, including regulatory approval.

Financial Outlook

For the first quarter of 2002, Centra expects to report revenue in the range of $11.0 to $11.3 million. The Company anticipates a pro forma net loss, excluding non-cash stock-based compensation expense and other intangible assets, for the first quarter of 2002 to be $0.08 per share.

For 2002, the Company has set its target revenue in the range of $55 million to $60 million, representing annual revenue growth of approximately 50 percent over 2001. Gross margins for the year are expected to be in the range of 84 percent to 86 percent. Based on management's current assessment of market conditions and the Company's prospects, the Company forecasts achieving break even, on a pro forma basis, in the second quarter of 2002. The Company's objective is to achieve earnings per share for 2002, on a pro forma basis, in the range of $0.10 to $0.13 per share.

The above targets represent the Company's current revenue and earnings goals as of the date of this release, and are based on current conditions. The Company does not undertake to update these targets in any way or for any reason.

In conjunction with this release, Centra will host a conference call today at 5:30 p.m. EST . The call will be simultaneously Webcast over the Internet. To access the Webcast, go to the Company's Website at www.centra.com/investorrelations.

About Centra

Leading with an undisputed track record of helping millions of users to increase revenue and improve overall business performance, Centra provides Web collaboration solutions that enable the delivery of information in a variety of live and self-service formats, and add value through unmatched capabilities to capture interactions and content, personalize and manage this information, and instantly re-use it across the enterprise. Today hundreds of global organizations across every industry and market sector choose Centra, including ExxonMobil, Cadbury Schweppes, Citigroup, AT&T, Procter & Gamble, McKesson, Merck, Nationwide Insurance, Sysco, and Stanford University. Centra's products are bolstered by a vital ecosystem of strategic partners, including PwC Consulting, Deloitte Consulting, EDS, KPMG iLS, Microsoft, Siebel, Cisco, and Oracle. Headquartered in Boston's technology corridor, Centra has sales offices throughout North America, Europe and Asia.

Safe Harbor Statement

With the exception of the historical information contained in this release, the matters described herein contain forward-looking statements, and our comments in our Webcast teleconference today may contain, including but not limited to, statements concerning management's expectations regarding future results of operations, statements that involve risk and uncertainties that may individually or mutually impact the matters herein, and cause actual results, events and performance to differ materially. These risk factors include, but are not limited to, technological difficulties, the results of future research, lack of product demand and market acceptance for current and future products, the effect of economic conditions, the impact of competitive products and pricing, the Company's ability to manage and integrate the operation of the business of MindLever.com, Inc., acquired on April 30, 2001, and/or other factors outside the control of the Company, which are detailed from time to time in the Company's SEC reports, which are available at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Additional Information About the Merger and Where to Find It

SmartForce intends to file a registration statement on Form S-4 in connection with the transaction, and SmartForce and Centra intend to mail a joint proxy statement/prospectus to their respective stockholders in connection with the transaction. Investors and security holders of SmartForce and Centra are urged to read the joint proxy statement/prospectus when it becomes available because it will contain important information about SmartForce, Centra and the transaction. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus (when it is available) at the SEC's Web site at www.sec.gov. A free copy of the joint proxy statement/prospectus may also be obtained (when it is available) from SmartForce or Centra. In addition to the registration statement on form S-4 to be filed by SmartForce in connection with the transaction, and the joint proxy statement/prospectus to be mailed to the stockholders of SmartForce and Centra in connection with the transaction, each of SmartForce and Centra file annual, quarterly and special reports, proxy and information statements, and other information with the SEC. Investors may read and copy any of these reports, statements and other information at the SEC's public reference rooms located at 450 5th Street, N.W., Washington, D.C., 20549, or any of the SEC's other public reference rooms. Investors should call the SEC at 1-800-SEC-0330 for further information on these public reference rooms. The reports, statements and other information filed by SmartForce and Centra with the SEC are also available for free at the SEC's Web site at www.sec.gov. A free copy of these reports, statements and other information may also be obtained from SmartForce or Centra.

SmartForce's executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Centra and SmartForce in favor of the Merger. The other executive officers and directors of SmartForce who may be participants in the solicitation of proxies in connection with the Merger have not been determined as of the date of this filing. A description of the interests of SmartForce's executive officers and directors in SmartForce is set forth in the proxy statement for SmartForce's 2001 Annual Meeting of Stockholders, which was filed with the SEC on June 15, 2001. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of SmartForce's executive officers and directors in the Merger by reading the preliminary joint proxy statement/prospectus filed with the SEC when it becomes available.

Centra's executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Centra and SmartForce in favor of the Merger. The other executive officers and directors of Centra who may be participants in the solicitation of proxies in connection with the Merger have not been determined as of the date of this filing. A description of the interests of Centra's executive officers and directors in Centra is set forth in the proxy statement for Centra's 2001 Annual Meeting of Stockholders, which was filed with the SEC on March 30, 2001. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of Centra's executive officers and directors in the Merger by reading the preliminary joint proxy statement/prospectus filed with the SEC when it becomes available.

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

                                December 31,      December 31,
                                    2000              2001
Assets
Current assets:
  Cash and cash equivalents       $ 42,015         $ 25,424
  Short term investments            23,172           22,759
  Restricted cash                      100              100
  Accounts receivable, net           4,170            9,654
  Prepaid expenses and other
   current assets                    1,766            1,250

    Total current assets            71,223           59,187

Property and equipment, net          3,379            4,182

Restricted cash                        400              549
Other assets                            62              104
Goodwill and other intangible
 assets                                  -            6,955

    Total assets                  $ 75,064         $ 70,977

Liabilities and stockholders'
 equity

Current liabilities:
  Current maturities of term
   loan                           $    482         $  1,563
  Accounts payable                   1,184            1,463
  Accrued expenses                   4,612            5,808
  Deferred revenue                   5,018            8,165

    Total current liabilities       11,296           16,999

Term loan, net of current
 maturities                          1,894            2,631

Total stockholders' equity          61,874           51,347

Total liabilities and
 stockholders' equity             $ 75,064         $ 70,977


                         CENTRA SOFTWARE, INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
   For the Three and Twelve Months Ended December 31, 2000 and 2001
             (Amounts in thousands, except per share data)
                              (Unaudited)

                              Three months         Twelve Months
                            ended December 31,   ended December 31,
                           2000           2001    2000         2001

Revenues
  License                $ 6,306         7,628  $ 18,697     28,815
  Service                  1,524         3,421     4,276     10,302
    Total revenues         7,830        11,049    22,973     39,117

Cost of revenues
  License                     98           121       314        505
  Service                  1,162         1,606     3,381      6,552
    Total cost of
     revenues              1,260         1,727     3,695      7,057

    Gross profit           6,570         9,322    19,278     32,060

Operating expenses
  Sales and marketing      7,077         6,571    22,563     25,481
  Product development      2,107         3,035     8,481     12,516
  General and
   administrative          1,664         1,754     4,977      7,418
  Compensation charge for
   issuance of stock
   options (1)               223           217       925        887
  Acquired in process
   research and
   development (1)             -             -         -      2,200
  Amortization of
   goodwill (1)                -           294         -        783
  Amortization of other
   intangible assets (1)       -           200         -        533
    Total operating
     expenses             11,071        12,071    36,946     49,818

  Operating loss          (4,501)       (2,749)  (17,668)   (17,758)

Other income, net          1,066           136     3,810      1,848
Loss on investment (1)         -             -         -       (772)

  Net loss                (3,435)       (2,613)  (13,858)   (16,682)

Accretion of discount on
 preferred stock (1)           -             -       649          -

Net loss attributable to
 common stockholders     $(3,435)     $ (2,613) $(14,507)  $(16,682)

Basic and diluted net
 loss per share          $ (0.15)     $  (0.10) $  (0.67)  $  (0.68)

Weighted average
 shares outstanding:
  Basic and diluted       23,443        24,909    21,781     24,449

Pro forma net loss (1)   $(3,212)     $ (1,902) $(12,933)  $(11,507)

Pro forma net loss per
 share                   $ (0.14)     $  (0.08) $  (0.57)     (0.47)

Pro forma basic and
 diluted weighted
 average common
 shares outstanding       23,443        24,909    22,608     24,449

(1) The pro forma net loss excludes non-cash stock-based compensation
    expense, acquired in process research and development,
    amortization of goodwill and other intangible assets, loss on
    investment, accretion of discount on preferred stock and assumes
    the conversion of convertible preferred stock into common stock at
    the beginning of each period presented.