Dataware Technologies announces record third quarter results; Net income increases 76 percent on $10.2 million in revenues.

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Oct. 23, 1995 -- Dataware Technologies, Inc. (NASDAQ: DWTI) today reported that revenues for the third quarter ended September 30, 1995 grew 18 percent to a record $10.2 million, compared with $8.7 million for the third quarter of 1994.

The company reported record net income of $820,000, or $0.13 per share, for the third quarter of 1995, compared with net income of $467,000, or $0.08 per share, for the same period a year ago. Software license revenues increased 33 percent to $5.4 million from $4.1 million, services revenues increased 23 percent to $4.4 million from $3.6 million, and systems integration revenues decreased 65 percent, to $357,000 from $1.0 million.

"This was our first $10 million-plus revenue quarter, and our first $1 million-plus operating profit quarter; both are important milestones for Dataware," stated Kurt Mueller, chairman and chief executive officer. "Growth in our higher margin software and services revenues continued to offset the decreases in our lower margin systems integration business."

For the nine months ended September 30, 1995, Dataware reported that revenues increased 30 percent to $29.5 million, compared with $22.7 million for the same period in 1994. For the first nine months of 1995, Dataware reported net income of $1.9 million, or $0.30 per share, compared with net income of $503,000, or $0.08 per share, for the same period in 1994.

Mueller continued, "Highlights of the third quarter included significant software orders from customers, including Dun & Bradstreet, Microboards, R.R. Donnelley & Sons, Thomson & Thomson and one of the regional bell operating companies. New announced customers for Total Recall(R) -- our development system for easy integration of Dataware's BRS software with a variety of relational database systems -- included Ford Motor Company and the U.S. Army." "During the quarter, we successfully delivered new services projects to key organizations including Ace Hardware, Blue Cross of Michigan, International Data Group and Pennwell International," said Mueller. "We also shipped several new software product versions including BRS Client/Server 1.1 for Microsoft Windows NT and several update versions of CD Author(R), CD Answer(R) and CD Record(TM)."

Dataware Technologies, one of Inc. Magazine's 100 Fastest-Growing Small Public Companies, is a leading international developer and marketer of software and services for electronic information providers. Dataware's high-performance, multi-platform and multi-lingual software and comprehensive services enable customers -- including publishers, corporations, government agencies, law firms and universities -- to manage and distribute information on CD-ROM and on-line. Today, Dataware's software is used by more than 1,700 organizations worldwide. Dataware's strategy is to maintain and enhance its leadership position by emphasizing technological leadership, customer service, global distribution and selective acquisitions. -0-

The company's consolidated statements of income follow.

Dataware, CD Author, CD Answer and Total Recall are registered trademarks, and CD Record is a trademark owned or licensed by Dataware Technologies, Inc. Other company or product names mentioned in this press release may be trademarks or registered trademarks of their respective owners, and are hereby acknowledged.

                       Dataware Technologies, Inc.
                     Consolidated Statements of Income
              (In thousands except per share data, unaudited)

                                Three months            Nine months
                                    ended                  ended
                                  September 30          September 30
                                1995       1994       1995       1994
                            ------------------------------------------
Revenues:
    Software license fees     $5,404     $4,051    $14,606     $9,754
    Services                   4,444      3,600     13,033      9,086
    Systems integration          357      1,013      1,828      3,825
        Total revenues        10,205      8,664     29,467     22,665

Cost of revenues:
    Software license fees        872        581      2,209      1,538
    Services                   2,327      1,901      6,687      4,575
    Systems integration          317        572      1,392      2,368
        Total cost of revenues 3,516      3,054     10,288      8,481
Gross margin                   6,689      5,610     19,179     14,184

Operating expenses:
    Sales and marketing        3,291      2,844      9,716      7,726
    Product development        1,122      1,024      3,425      2,708
    General and administrative 1,274      1,219      3,788      3,526
        Total operating
         expenses              5,687      5,087     16,929     13,960

Income from operations         1,002        523      2,250        224

Interest income                  159        123        429        455
Other income (expenses), net      11        (24)        65         (1)
Income before income taxes     1,172        622      2,744        678

Provision for income taxes       352        155        823        175
        Net income              $820       $467     $1,921       $503
Net income per common share    $0.13      $0.08      $0.30      $0.08
Weighted average number of
 common and common equivalent
 shares                        6,525      6,143      6,495      6,074

CONTACT: Dataware Technologies, Inc.

G. Mead Wyman

[phone] x1702

[e-mail]

Home Page: http://www.dataware.com