Forte Software Reports Fourth Quarter and Fiscal 1998 Financial Results.

OAKLAND, Calif.--(BUSINESS WIRE)--April 23, 1998--Forte Software, Inc. (NASDAQ:FRTE), a leading supplier of development and integration environments for enterprise networked applications, today reported financial results for its fourth quarter and fiscal year ended March 31, 1998.

Total revenues in the fourth quarter were a record $21.8 million. This represents an 11% increase over revenues of $19.6 million in last year's fourth quarter, and a 26% increase over third quarter revenues of $17.3 million.

The fourth quarter net loss was $2.7 million compared to net income of $3.0 million in last year's fourth quarter. The fourth quarter diluted net loss per share was $0.14 compared to diluted net income per share of $0.14 in last year's fourth quarter.

For the full year, total revenues grew 13% to a record $71.3 million, compared with fiscal 1997 revenues of $63.1 million. The net loss was $14.2 million, versus net income of $7.2 million last year. The diluted net loss per share for fiscal 1998 was $0.73, compared to diluted net income per share of $0.34 last year.

"We are very pleased with our sequential revenue growth and our efforts to contain expenses," said Marty Sprinzen, President and Chief Executive Officer. "We have made considerable progress in implementing the action plan we announced last quarter, and in better aligning our product set and marketing strategies with evolving market requirements. While we still have a lot of work to do, we are pleased to see our efforts begin to pay off."

The following table provides a summary of Forte Software's fourth quarter and fiscal 1998 results (in millions, except per share data): -0-

                                   Quarter Ended         Year Ended
                                      March 31,           March 31,
                                  1997        1998    1997      1998

Revenues                       $  19.6      $ 21.8   $ 63.1   $ 71.3
Income (loss)
 from operations                   2.9        (2.8)     6.3    (15.8)

Net income (loss)                  3.0        (2.7)     7.2    (14.2)

Income  (loss) per
 share - basic                     0.16       (0.14)    0.39    (0.73)
Income (loss) per
 share - diluted                   0.14       (0.14)     0.34   (0.73)


     Revenues from license fees totaled $12.4 million, a 9% decrease
from last year's fourth quarter license fees of $13.5 million, and a
29% increase over fiscal 1998 third quarter license fees of $9.6
million. Maintenance and services revenues increased 56% in the fourth
quarter to a record $9.4 million, compared with $6.1 million in last
year's fourth quarter. License fees represented 57% and maintenance
and services contributed 43% of total revenues in the fourth quarter.
     International revenues increased to $9.9 million in the quarter
ended March 31, 1998, another Company record, and a 48% increase over
the comparable period in the prior year. Domestic revenues were $11.9
million in the fourth quarter, a decrease of 8% from the $12.9 million
domestic revenues in the comparable period in the prior year, and an
increase of 35% over the $8.8 million domestic revenues in the fiscal
1998 third quarter.

New Accounts

     Thirty new accounts were added in the fourth quarter, including
Aeroporta Di Roma, Autostrade, Boehringer Ingelheim, Cargolux, Dana
Commercial Credit, Heartland Advisors, Japan Tabacco, Kiloutou,
Kintetsu World Express, Mexico Ministry of Education, North Carolina
Dept. of Justice, Online Resources & Communications, and Telekurs.

Fourth Quarter Highlights

--   Over 30 new applications were deployed by Forte(R) customers and
     partners in a number of different business areas. Mazda Australia
     deployed an internet-based vehicle sales and distribution system
     to its dealerships nationwide. Asyst, a Forte VAR, deployed a
     micro chip manufacturing system using Forte Conductor(tm). In
     addition, many existing Forte applications were expanded to
     greater numbers of users.

--   In March at Open Systems Advisors' Crossroads 98 Conference, the
     Forte Application Environment(tm) was the only product in the
     database independent development category to receive the top
     deployment rating of AA.

--   At JavaOne, also in March, the Company announced that two leading
     software developers, HOME Account Network and Chordiant Software,
     are shipping software suites built with Java and Forte.

--   The Company announced that TransCanada PipeLines has standardized
     on Forte for mission-critical applications, with seven deployed
     Forte-based applications to date and nine more under development.

--   The Company announced support for the use of Forte Conductor as
     the foundation for Digital Equipment Corporation's AltaVista
     Process Flow, which automates multistep, multiparticipant
     workflow across production systems and Web applications.

--   On April 2, the Company announced that Mike Hedger, Senior Vice
     President of European Operations, was promoted to Executive Vice
     President, Worldwide Field Operations. Under Hedger's leadership
     the European subsidiaries have each grown from 50% to more than
     200% annually during the past two years.

About Forte Software

     Forte Software, Inc. designs, develops, markets, and supports
Forte, an advanced development and integration environment for
enterprise networked applications. Information systems organizations
use the Forte Application Environment to more easily build, integrate,
automate and manage powerful business solutions that run in
distributed computing environments, including the Internet and
multi-tier client/server. Forte is marketed and sold worldwide through
a combination of direct operations, subsidiaries, geographical
distributors and value-added resellers. For additional information,
contact Forte Software at [e-mail] or visit
http://www.forte.com.
     (c) Forte Software, Inc. Forte is a registered trademark, and
Forte Application Environment and Forte Conductor are trademarks, of
Forte Software, Inc.
     The statements in this release that relate to future plans,
events, or performance are forward-looking statements. Actual results
might differ materially due to a variety of factors. Forte Software
cannot guarantee completion of any future products or product features
mentioned in this release, and no reliance should be placed on their
availability. Additional information about factors that may impact
results is contained in Forte Software's Annual Report on Form 10-K
under the sections entitled Business Risks and Management's Discussion
and Analysis of Financial Condition and Results of Operations, and in
other SEC filings including Forte Software's most recent Form 10-Q.
-0-
                         Forte Software, Inc.
            Condensed Consolidated Statements Of Operations
               (in thousands, except per share amounts)

                             Three months ended       Years ended
                                  March 31,             March 31,
                              1997        1998       1997      1998
                                 (Unaudited)

Revenues:
 License fees              $ 13,534   $ 12,366    $ 43,595   $ 39,825
 Maintenance and
  services                    6,050      9,455      19,456     31,503
                           --------   --------    --------   --------
  Total revenues             19,584     21,821      63,051     71,328

Cost of revenues
  License fees                  171        432         665        892
  Maintenance
   and services               3,665      5,332      11,796     18,844
                           --------   --------    --------   --------
Total cost
  of revenues                 3,836      5,764      12,461     19,736

Gross profit                 15,748     16,057      50,590     51,592
                           --------   --------    --------   --------
Operating expenses

 Sales and marketing          8,497     12,488      28,560     44,862
 Product development
  and engineering             2,978      4,196      10,611     14,983
 General and
  administrative              1,342      2,198       5,119      7,585
                           --------   --------    --------   --------
 Total operating
  expenses                   12,817     18,882      44,290     67,430
                           --------   --------    --------   --------
Income (loss)
 from operations              2,931     (2,825)      6,300    (15,838)

Interest income net             491        476       1,988      2,006
                           --------   --------    --------   --------
Income (loss)
 before income taxes          3,422     (2,349)      8,288    (13,832)
Provision for
 income taxes                   460        310       1,039        345
                           --------   --------    --------   ------- share - diluted       $   0.14
  $  (0.14)   $   0
.34   $  (0.73)

Shares used in computing
 net income (loss) per
  share:

   Basic                     18,719     19,512      18,458     19,334
   Diluted                   21,068     19,512      21,110     19,334


                         Forte Software, Inc.
                 Condensed Consolidated Balance Sheets
                            (in thousands)

                                              March 31,
                                       1997             1998
       ASSETS

Current assets:
 Cash and cable, net of
  allowances of $1,151
  ($941 in      --------
Total current assets                                        --------        ----
              -----
---        --------
Total current liabilities              23,355          26,040

Capital lease obligations
 due after one year                       849             123
Deferred revenue          486)        (29,663)
  Foreign currency
   tra
Total liabilities and
 stockholders' equity                $ 73,749        RD: CALIFORNIA

INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED EARNINGS