Comshare Reports First Quarter Profit.

ANN ARBOR, Mich.--(BUSINESS WIRE)--Oct. 20, 1998--Comshare, Inc. (Nasdaq:CSRE) today announced results for the three-month period ended September 30, 1998. The Company reported net income of $.1 million, or $.01 per share, for the first quarter ended September 30, 1998. This compares to a net loss excluding the unusual charge of $1.9 million, or $.19 per share, for the same quarter last year and to a net loss of $3.5 million, or $.36 per share, including the unusual charge.

"We kept a tight rein on costs that enabled us to report a small profit this quarter," said Dennis Ganster, President and CEO. "Our financial goals this fiscal year are to be profitable and grow revenue compared to the comparable revenue base of last year. I am pleased that we are on track from the start of the fiscal year."

Without the revenue from the Retail Business that was sold in June, 1998, and reflecting software revenue from the Company's agents on a consistent basis, license fees and total revenue in the year ago quarter would have been $5.3 million and $15.8 million, respectively. "On a comparable basis, license fees grew 16% to $6.1 million and total revenue increased 8% to $17.2 million from year ago levels," said Ganster. "The revenue growth this quarter reflected continued improvement in the North American operations and improvement in the company's European operations. License fees increased 93% compared to the year ago quarter in North America and 7% in Europe, primarily on strong growth in our UK operations, which was up 81%. Business in Asia Pacific continues to be weak due to the economic turmoil in that region."

"I believe the improvement this quarter reflects several factors," continued Ganster. "The changes made over the past year to rebuild the sales force and strengthen the marketing lead generation programs in our direct operations are beginning to positively impact revenue growth. Our focused strategy of financial analytic applications means that we are leading with our budgeting application, and we are encouraged by the 30% growth in BudgetPLUS license fees compared to the year ago quarter. In addition, we believe the major disruptions in our European direct sales force from the sale of the Retail Business are largely behind us."

Among the sales in the first quarter were licenses to Lorillard Tobacco Company, Gibson Petroleum Company Limited, Vodafone Limited, John Menzies, a merchandise retail company, Getty Images, Amey Construction, AMES Department Stores, Inc., NBC, SPX Corporation, Citizens Bank of Rhode Island and Tricon Restaurant Services Group, Inc. Customers select Comshare's products because they offer the functionality, flexibility and analytical capabilities needed in financial applications. Tammi Price, Supervisor of Corporate Planning and Economics for Gibson Petroleum Company Limited commented, "We chose Comshare as the company to provide an answer to our budgeting and analysis needs because of the flexibility that Comshare's budget solution provides, and its extensive ad hoc analysis capability. Comshare's BudgetPLUS is very user friendly, while still maintaining flexibility and a high degree of functionality." According to Vincent Losito, Manager of Corporate Accounting for Lorillard Tobacco Company, "By implementing the new Lorillard budget system with Comshare BudgetPLUS, we will now be able to do more analysis of our business as opposed to just crunching numbers, thereby giving management more actionable information in a more timely manner."

As part of the new marketing program initiated last year, Dennis Ganster will appear on CNBC on November 15th. The show, World Business Review, is hosted by Casper Weinberger and co-hosted by the Gartner Group. Mr. Ganster is featured in a panel discussion with representatives from KPMG Peat Marwick LLP on the topic of business intelligence applications. "The segment really illustrates how Comshare's strategy and applications line up with leading industry experts and our customer needs," said Ganster. The episode also features a field report on Lockheed Martin, one of Comshare's customers utilizing a combination of Comshare products for web-based budgeting, reporting and consolidation.

About Comshare

Comshare is a leading provider of financial analytic applications for management planning and control, including financial consolidation and reporting, enterprise budgeting, and financial analysis. These complete client/server and Web-based analytic applications are based on an open architecture, utilizing market-leading databases. Comshare's applications incorporate Guided Analysis capabilities, including innovative data visualization, designed to improve decision-making for enhanced competitiveness and improved profitability. A strong customer orientation, application expertise, and commitment to the best technologies have made Comshare one of the top independent software companies, with customers around the world, many of which are Fortune 500 and Financial Times Top 1000 companies. Comshare, Inc. is a Microsoft Certified Solution Provider. For more information on Comshare, call 1-800-922-7979, e-mail [e-mail], or visit Comshare's Web site at http://www.comshare.com.

Safe Harbor Statement

Certain information in this press release contains "forward looking statements" within the meaning of the Securities Exchange Act of 1934, including those concerning the Company's future results and strategy. Actual results could differ materially from those in the forward looking statements due to a number of uncertainties, including, but not limited to, the demand for the Company's products and services; the size, timing and recognition of revenue from significant orders; increased competition; the Company's success in and expense associated with developing, introducing and shipping new products; new product introductions and announcements by the Company's competitors; changes in Company strategy; product life cycles; the cost and continued availability of third party software and technology incorporated into the Company's products; the impact of rapid technological advances, evolving industry standards and changes in customer requirements, including the impact on the Company's revenues of the proposed release by Microsoft of an OLAP database; the impact of recent transitional changes in North American and international management and sales personnel; cancellations of maintenance and support agreements; software defects; changes in operating expenses; variations in the amount of cost savings anticipated to result from cost reduction actions; the impact of cost reduction actions on the Company's operations; fluctuations in foreign exchange rates; the impact of undetected errors or defects associated with the Year 2000 date functions on the Company's current products and internal systems; the ability of the Company to generate sufficient future taxable income or to execute available tax strategies, required to realize deferred tax assets; economic conditions generally or in specific industry segments; risks inherent in seeking and consummating acquisitions, including the diversion of management attention to the assimilation of the operations and personnel of acquired businesses, the ability of the Company to successfully integrate acquired businesses and the impact on the Company's results and financial condition from debt issued, liabilities acquired, and additional expenses incurred in connection with such acquisitions. In addition, a significant portion of the Company's revenue in any quarter is typically derived from non-recurring license fees, a substantial portion of which is booked in the last month of a quarter. Since the purchase of the Company's products is relatively discretionary and generally involves a significant commitment of capital, in the event of any downturn in any potential customer's business or the economy in general, purchases of the Company's products may be deferred or canceled. Further, the Company's expense levels are based, in part, on its expectations as to future revenue and a significant portion of the Company's expenses do not vary with revenue. As a result, if revenue is below expectations, results of operations are likely to be materially adversely affected.

Comshare is a registered trademark; Guided Analysis, Comshare DecisionWeb and Comshare Decision are trademarks of Comshare, Inc. All other trademarks are the property of their respective holders. -0-

                        COMSHARE, INCORPORATED
                 CONSOLIDATED STATEMENT OF OPERATIONS
                 (in thousands, except per share data)

                                            Three Months Ended
                                              September 30,
                                           ____________________
                                             1998         1997
                                             ____         ____
Revenue
   Software licenses                       $  6,126    $  7,414
   Software maintenance                       7,114       8,218
   Implementation, consulting
    and other services                        3,919       5,330
                                           ________    ________
Total revenue                                17,159      20,962

Costs and expenses
   Selling and marketing                      6,938       9,961
   Cost of revenue and support                6,406       6,767
   Internal research and product development  2,247       3,091
   General and administrative                 1,977       2,967
   Unusual charge                               -         1,614
                                           ________    ________
Total costs and expenses                     17,568      24,400
                                           ________    ________
Income (loss) from operations                  (409)     (3,438)

Other income (expense)
   Interest income                              569         140
   Interest expense                             (87)       (102)
   Exchange gain (loss)                           7        (105)
                                           ________    ________
Total other income (expense)                    489         (67)

Income (loss) before taxes                       80      (3,505)
Provision for income taxes                       28        -
                                           ________    ________
Net income (loss)                          $     52    $ (3,505)
                                           ________    ________
                                           ________    ________
Weighted average number of common
 shares outstanding                          10,029       9,874
                                           ________    ________
                                           ________    ________
Basic net income (loss) per common share   $   0.01    $  (0.36)
                                           ________    ________
                                           ________    ________


                        COMSHARE, INCORPORATED
                 CONDENSED CONSOLIDATED BALANCE SHEET
                            (in thousands)

                                         September 30,  June 30,
                                             1998        1998
                                           ________    ________
Assets

   Current Assets
      Cash and cash equivalents            $ 43,831    $ 49,102
      Accounts receivable, net               19,575      21,354
      Other current assets                    4,935       4,578
                                           ________    ________
   Total current assets                      68,341      75,034

   Property and equipment, net                3,022       3,282
   Deferred income taxes                      5,377       5,377
   Other assets                               5,281       4,999
                                           ________    ________

                                           $ 82,021    $ 88,692
                                           ________    ________
                                           ________    ________
Liabilities and Shareholders' Equity

   Current Liabilities
      Notes payable                        $  4,339    $  1,238
      Deferred revenue                       12,999      14,834
      Other current liabilities              22,322      29,431
                                           ________    ________
   Total current liabilities                 39,660      45,503

   Long-term debt and obligations               485       1,434
   Other liabilities                          3,168       3,350

   Shareholders' equity                      38,708      38,405
                                           ________    ________

                                           $ 82,021    $ 88,692
                                           ________    ________
                                           ________    ________