Comshare reports a 60% increase in second quarter net income; client server application software sales drive fourth consecutive quarter of license fee growth.

ANN ARBOR, Mich.--(BUSINESS WIRE)--Jan. 19, 1995--Comshare, ancorporated (NASDAQ: CSRE) today reported a 60% increase in second quarter net income to $1.7 million, or $.30 a share, up from $1.1 million, or $.19 a share, for the same quarter of the previous year. Led by a 33% growth in software license fees, second quarter revenue totaled $27.7 million, up 16% from $23.8 million for the year-earlier quarter.

"License fee revenue grew for the fourth consecutive quarter, indicating strong market acceptance of our new client/server products introduced during the past year," said T. Wallace Wrathall, Comshare president and chief executive officer. "All three market areas are growing strongly with double-digit license fee growth in the quarter over the year-earlier quarter -- EIS/DSS increased 32%, financial applications grew 35%, and retail jumped 38%."

"Second quarter revenue growth reflects not only strong license fee growth in the quarter, but a pick up in implementation and consulting services revenue and client/server maintenance revenue fed by the past four quarters of license fee growth," said Kathryn A. Jehle, senior vice president and chief financial officer. "While growth in total maintenance revenue has been held back by the decline of mainframe maintenance in line with industry-wide trends, maintenance for desktop and client/server products increased 14% compared with the quarter last year."

Income before taxes jumped to $2.7 million, a 90% increase over the second quarter last year, driven by higher revenue and previous cost reduction actions. "The number of employees was 670 at the end of December 1994, down over 100 from a year ago," said Jehle. "The improvement in income before taxes was significantly stronger than the reported 90%," she added, "because the results for the year-earlier quarter included a nonrecurring $1.1 million gain from the sale of excess land that partially offset general and administrative expenses."

The company's cost of revenue and support increased primarily due to royalties related to Arbor Software's database engine, used in certain of the company's products. Wrathall said that the use of Arbor's technology helped accelerate market acceptance of the company's new client/server software, allowed Comshare to move quickly to market, and reduced product development risk.

"Since its release last March," said Wrathall, "Commander OLAP has fueled EIS/DSS growth with the sale of more than 125 application solutions to both new and existing EIS/DSS customers." Customers are selecting Commander OLAP, Comshare's new generation client/server software that has modern multidimensional server technology at its core, to meet end user application requirements for financial planning, sales and marketing reporting and profitability analysis.

"With the introduction of Windows versions and enhanced features to our products, financial and retail applications have both grown into sizable markets for Comshare," said Wrathall. Commander FDC and Budget offer a complete, integrated solution to the financial manager that provides all the functionality required for monthly management reports, statutory/legal consolidation, distributed budgeting, and monthly reforecasts -- all in one database, all under the control of the finance department. The ARTHUR retail applications enable a retailer to plan the merchandise mix for a selling season, compare actual sales to plan, and to replan the mix as necessary to maximize profits. "Our customers consider their ARTHUR applications as critical for success in the fast moving retail business, and they look to Comshare for planning methodology and expertise as well as application software to help them successfully manage in their increasingly competitive environment," said Wrathall.

Company Background

Comshare is a market leading, global software company that provides planning, analysis and reporting applications for business management and decision making. In addition to business intelligence (EIS/DSS) solutions and financial applications that are marketed across various industries and to government organizations, the company develops merchandise planning and sales performance applications for the retail industry.

Founded in 1966, Comshare has more than 3,000 customers worldwide, many of which are Fortune 500 and Financial Times Top 1000 companies. The company is one of the top 50 independent software companies according to annual rankings published by Software Magazine.

Commander and ARTHUR are trademarks of Comshare, Incorporated. Any other trademarks mentioned are the property of their respective owners.

-0-

                               Comshare, Incorporated
                          Consolidated Statement of Income

                  Three Months Ended         Six Months Ended
                     December 31,              December 31,
                  1994         1993         1994         1993

Revenue
 Software
  licenses       $13,017,600  $ 9,793,200  $23,023,900  $17,625,900
 Software maint.   9,237,400    9,915,400   18,208,600   20,967,300
 Implementation
  and consulting
  services         5,259,300    3,903,800   10,321,100    8,353,200
 Remote processing
  and other          141,400      166,700      259,800      562,600
                 -----------  -----------  -----------  -----------
                  27,655,700   23,779,100   51,813,400   47,509,000

Costs and expenses
 Selling and
  marketing       11,513,700   11,860,400   21,745,200   22,892,900
 Cost of revenue
  and support      5,979,400    4,159,400   11,361,100    8,421,200
 Internal research
  and product
  development      4,030,800    4,676,400    8,100,800    9,899,500
 Internally
  capitalized
  software        (2,940,300)  (3,284,500)  (6,019,100)  (6,796,800)
 Software
  amortization     3,261,600    2,911,700    6,647,000    5,919,900
 General and
  administrative   2,964,100    1,755,000    5,714,400    4,474,600
                 -----------  -----------  -----------  -----------
                  24,809,300   22,078,400   47,549,400   44,811,300
                 -----------  -----------  -----------  -----------
Income from
  operations       2,846,400    1,700,700    4,264,000    2,697,700

Other income
  (expense)
 Interest income      34,900       16,600       56,000       44,900
 Interest expense   (210,400)    (131,400)    (397,800)    (271,300)
 Exchange loss        (6,000)    (180,200)     (42,900)    (138,600)
                 -----------  -----------  -----------  -----------
                    (181,500)    (295,000)    (384,700)    (365,000)
                 -----------  -----------  -----------  -----------
Income before
  taxes            2,664,900    1,405,700    3,879,300    2,332,700
Provision for
  income taxes       984,300      354,100    1,447,900      624,000
                 -----------  -----------  -----------  -----------
Net income       $ 1,680,600  $ 1,051,600  $ 2,431,400  $ 1,708,700
                 ===========  ===========  ===========  ===========

Weighted average
  number of
  common and
  dilutive common
  equivalent
  shares           5,549,600    5,475,300    5,522,300    5,446,700
                   =========    =========    =========    =========

Net income per
  common share         $ .30        $ .19        $ .44        $ .31
                       =====        =====        =====        =====

Note:  Certain amounts in the prior year financial statements have
       been reclassified to conform with the current presentation.

CONTACT: Comshare, Incorporated, Ann Arbor

Kathryn Jehle, 313/769-6723

Ricia Hughes, 313/769-6068