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HOGAN SYSTEMS REPORTS THIRD-QUARTER RESULTS

            HOGAN SYSTEMS REPORTS THIRD-QUARTER RESULTS
    DALLAS, Jan. 27 /PRNewswire/ -- Hogan Systems, Inc.


(NASDAQ-NMS: HOGN) today reported a net loss of $182,000, or $.01 per share, on revenues of $12,949,000 for its third fiscal quarter, ended Dec. 31, 1991. During the comparable period a year ago, the company earned $1,537,000, or $.11 per share, on revenues of $9,891,000.
    Although the company earned $126,000 before taxes and discontinued operations for the quarter, a tax provision of $308,000 arising from the mix between domestic and foreign operations resulted in a consolidated reported net loss.
    For the nine months ended Dec. 31, 1991, the company reported net income of $1,237,000, or $.09 per share, on revenues of $39,699,000. For the nine months ended Dec. 31, 1990, Hogan Systems reported net income of $1,262,000, or $.09 per share, on revenues of $28,508,000.
    According to Gregor G. Peterson, president and chief executive officer, revenues from license fees were less than expected, as sales anticipated for the third quarter are now expected to be completed in the fourth quarter, because of a lengthening of the sales cycle. Partially offsetting this result was higher than expected professional services revenue, which reached a record level during the third quarter. The company achieved this revenue increase despite a reduction in billable days because of the holiday periods that occurred during the quarter, he said.
    "Our professional services business continues to represent a growth area for the company," said Peterson.  "During the quarter, we added new personnel to handle the increasing number of long-term assignments." Peterson said that this increase in expenses was planned, in order to accommodate the cost of permanent staff additions.  Expense levels during the third quarter otherwise reflect the company's cost control measures.
    The company also improved its cash and investment balance at Dec. 31, 1991.  Cash increased from $17,700,000 on Sept. 30, to more than $25 million on Dec. 31, an increase of $7,300,000 during the quarter.
    As the company's cash position increased, its accounts receivable balance at Dec. 31, 1991, decreased from the previous fiscal quarter. Accounts receivable totaled $25,100,000 at the end of the third quarter, a decrease of $7,100,000 from Sept. 30, 1991.
    Hogan Systems, Inc., of Dallas, designs, markets and supports integrated online application software products for use by financial institutions worldwide.  The company maintains major sales and support offices in Woking, England; Melbourne, Australia; Frankfurt, Germany; and Dallas.  The company is listed in alphabetical quotations as "Hogan" or "Hogansys."
                          HOGAN SYSTEMS, INC.
                        Statements of Operations
    Periods ended         Three months           Nine months
     Dec. 31,            1991       1990        1991       1990
                           (In thousands, except per share data)
    Revenues:
     License fees        $    780   $  1,695    $  4,471   $  5,458
     Royalty income             -        380         460      3,552
     Maintenance fees       2,373      2,417       7,185      6,627
     Professional
      service fees          9,796      5,399      27,583     12,871
       Total revenues      12,949      9,891      39,699     28,508
    Expenses:
     Software development   1,341      1,204       4,170      5,021
     Professional services  7,796      3,711      20,763      9,920
     Selling and marketing  2,310      2,009       6,915      5,270
     General and
       administrative       1,738      1,643       5,777      5,281
        Total expenses     13,185      8,567      37,625     25,492
    Operating income
     (loss)                  (236)     1,324       2,074      3,016
    Interest income           362        507       1,101      1,627
    Income before taxes       126      1,831       3,175      4,643
    Provision for income
     taxes                    308        322       1,068      1,192
    Income (loss) from
     continuing operations   (182)     1,509       2,107      3,451
    Income (loss) from
     discontinued operations    -         28        (870)    (2,189)
    Net income (loss)    $   (182)  $  1,537    $  1,237   $  1,262
    Per share data:
     Income (loss) from
        continuing
        operations       $  (0.01)  $   0.11    $   0.15   $   0.26
    Net income (loss)    $  (0.01)  $   0.11    $   0.09   $   0.09
    Weighted average
     number of common
     shares                14,000     13,800      14,200     13,400
                          HOGAN SYSTEMS, INC.
                             Balance Sheets
                          Dec. 31,      Sept. 30,      March 31,
                           1991           1991           1991
                                      (in thousands)
    Assets
    Current assets:
    Cash and short
     term investments     $25,009       $17,674         $24,180
    Accounts receivable    25,127        32,208          23,968
    Prepaid expenses and
     other current assets   1,103         1,445           1,200
    Total current assets   51,239        51,327          49,348
    Installment receivables
     due after one year     2,852         2,425           2,747
    Software, at cost,
     net of accumulated
     amortization           1,710         1,875           2,132
    Other assets            5,237         5,498           5,439
    Total assets          $61,038       $61,125         $59,666
    Liabilities and
     Shareholders' Equity
    Current Liabilities:
     Accounts payable and
      accrued expenses    $ 5,616       $ 4,912         $ 5,110
     Deferred maintenance
      revenue               6,052         6,851           7,632
     Other                  5,366         5,292           3,921
    Total current
     liabilities           17,034        17,055          16,663
    Deferred revenue           69            69              69
    Other liabilities         943         1,098             422
    Total liabilities      18,046        18,222          17,154
    Shareholders' equity
     before treasury stock 50,796        50,707          50,316
    Less treasury stock    (7,804)       (7,804)         (7,804)
    Total shareholders'
     equity                42,992        42,903          42,512
    Total liabilities
     and shareholders'
     equity               $61,038       $61,125         $59,666
    Hogan Systems, Inc., will conduct a conference call for members of the financial community at 1 p.m. (Central Standard Time) this afternoon (Monday, Jan. 27).
    At that time, Peterson and Jim Dunn, senior vice president and chief financial officer, will discuss the company's third-quarter financial results, which were announced today.
    If you would like to participate in this conference call, please call 800-359-8449 at 1 p.m. today.
    For further information, contact Dalene Nichols at 214-788-7945, or Larry Meltzer at 214-953-0808.
    -0-         1/27/92
    /CONTACT:  James M. Dunn, senior vice president and CFO of Hogan Systems, 214-788-7939, or Larry Meltzer of  Meltzer & Martin Public Relations, 214-953-0808, for Hogan Systems/
    (HOGN) CO:  Hogan Systems Inc. ST:  Texas IN:  CPR SU:  ERN SH -- NY031 -- 3658 01/27/92 10:53 EST
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