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SDRC Reports First $100 Million Quarter; Revenues Up 17%.

CINCINNATI--(BUSINESS WIRE)--Oct. 19, 1998--SDRC (Nasdaq:SDRC), a leading global provider of product development solutions and developer of I-DEAS(TM) and Metaphase(R) Enterprise(TM) software, today reported revenues totaling $101.8 million for the quarter ended September 30, 1998, a 17% increase over the same quarter last year. SDRC's best revenue quarter ever was driven by a 35% increase in Asia, where SDRC's relationships with major corporations such as Nissan, Mazda, Toshiba, Hitachi, Mitsubishi, and Matsushita have made SDRC the design automation market leader in Japan. Total global license revenues were up 9% compared to the same quarter last year. Net income was $10.3 million, or 28 cents per average share outstanding, compared to $12.4 million or 33 cents per average share for the same period last year. Other income for the 1998 September quarter included a non-recurring gain on the sale of assets of about $2.7 million.

For the nine months ended September 30, 1998, SDRC's revenue was $288.1 million, up 12% compared to the first nine months of 1997. Net income was $25.8 million, or 67 cents per average share outstanding, compared to net income (after acquisition related costs of $20.9 million incurred in the first quarter of 1997) of $11.9 million, or 33 cents per average share outstanding for the same period last year.

"While overall demand for new software licenses has been impacted by global economic uncertainty and strong competition in our industry, SDRC's revenues continue to grow on the strength of our industry-leading professional consulting and services organization," said Bill Weyand, SDRC's Chairman, CEO and President. "Consulting services' revenues are up nearly 25% compared to both last year's third quarter and the last year-to-date. SDRC's vision is to become the leader in providing product development solutions, and our engineering consulting services are the driver for us being selected as the partner of choice by industry leaders focused on improving innovation and time-to-market," stated Mr. Weyand.

"Revenues from both Metaphase operations and new Metaphase licenses were at historic highs. We received significant Metaphase license orders in the quarter from Visteon, Samsung, Michelin and Seagate Technology, while major shipments of our I-DEAS design software went to Nissan, Mazda and Renault."

"We were active on the merger and acquisition front this quarter as we continue to structure SDRC for future growth," added Mr. Weyand. Last week, SDRC announced an agreement to acquire Imageware Corporation of Ann Arbor, Michigan for approximately $31 million in cash. Imageware provides technical surfacing applications including high-quality free-form surfacing, reverse engineering, point-cloud data processing and inspection. "Their emerging position in the automotive, aerospace and consumer products industries should clearly elevate SDRC's overall market share," stated Mr. Weyand.

Earlier in the quarter, SDRC announced the purchase of the Rapid Information Presentation Services (RIPS) software product from Altris Software, Inc. (OTC BB:ALTS) for $3 million, and closed on the transfer of SDRC's Core Test software products to MTS Systems Corporation (Nasdaq:MTSC). "Together, these actions demonstrate our objectives to structure SDRC for new growth markets and raise shareholder value," commented Mr. Weyand.

In yet another example of our objective to improve shareholder value, SDRC's Board of Directors announced, on September 17, 1998, its approval for the Company to repurchase up to 3,000,000 shares of SDRC common stock on the open market.

On the product front, SDRC will announce tomorrow the availability of our new out-of-the-box application for Metaphase Enterprise Document Management solutions. This product was created with the assistance of ABB and Visteon, two of our largest Metaphase customers, and it is already installed and in operation. Mr. Weyand went on to say, "This new application solution demonstrates the importance of our customer partnership strategy and presents another growth opportunity for us. As the market leader for Enterprise Product Data Management solutions, SDRC is continually introducing new web-centric, Java-interfaced tools to help our customers improve their time-to-market. Metaphase Document Management is the first of many new tool applications we plan to announce over the next several quarters."

SDRC (Structural Dynamics Research Corporation) is a leading provider of Enterprise Product Development Solutions through its suite of Mechanical Design Automation software, Product Data Management software, and related consulting services. The Company's products and consulting services help manufacturers optimize product development early in the design process, enabling them to reduce product cost and cycle time while significantly improving quality and time to market. SDRC employs more than 2,200 people and has offices in 16 countries throughout North America, Europe, and Asia/Pacific.

Except for historical information contained herein, the matters discussed in this news release may include forward-looking statements that involve risks and uncertainties. SDRC cautions that the actual results could differ materially from these statements depending upon a number of important factors described at length in our publicly-filed documents with the SEC, including the 10-K and 10-Q.

http://www.sdrc.com/ http://www.metaphasetech.com/

Note to Editors: SDRC is a registered trademark and I-DEAS and Metaphase Enterprise are trademarks of Structural Dynamics Research Corporation. All other trademarks or registered trademarks belong to their respective holders. -0-
 SDRC - CONSOLIDATED STATEMENT OF INCOME (Unaudited)
 (000, except per share data)

 Three Months Ended Nine Months Ended
 September 30, September 30,
 __________________ _________________
 1998 1997 1998 1997
 ____ ____ ____ ____
Revenue:
 Licenses $ 43,886 $ 40,429 $123,315 $123,824
 Maintenance and services 57,933 46,309 164,758 132,456
 ________ ________ ________ ________
 Total revenue 101,819 86,738 288,073 256,280

Cost of revenue 40,613 31,009 114,043 89,140
 ________ ________ ________ ________

Gross profit 61,206 55,729 174,030 167,140

Operating expenses:
 Selling and marketing 29,146 25,355 84,649 75,066
 Research and development 16,164 11,586 49,381 38,612
 General and administrative 4,503 3,835 13,186 12,899
 Purchased in-process
 research and development -- -- -- 20,850
 ________ ________ ________ ________
 Total operating expenses 49,813 40,776 147,216 147,427
 ________ ________ ________ ________
Operating income 11,393 14,953 26,814 19,713

Other income 4,144 1,211 10,830 2,871
 ________ ________ ________ ________
Income before income taxes 15,537 16,164 37,644 22,584
Income tax expense 5,199 3,412 11,865 9,366
 ________ ________ ________ ________
 Net income $ 10,338 12,752 $ 25,779 13,218
 ________ ________
 ________ ________
Proforma:(a)
 Income tax expense 3,759 10,729
 ________ ________

 Net income $12,405 $ 11,855
 ________ ________
 ________ ________


Net income per share $ .28 $ .33 $ .67 $ .33(b)

Common and common equivalent
 shares 37,226 37,185 38,404 36,411

(a) Reflects the tax expense that would have been reported if CASE (an
S corporation for income tax reporting purposes) had been a C
corporation. CASE was acquired in 1997 in a transaction accounted for
as a pooling of interests.

(b) $.90 excluding purchased in-process R&D.



 SDRC - CONSOLIDATED BALANCE SHEET

 (000 omitted)



 September 30, December 31,
 1998 1997
 _____________ ____________
 (Unaudited)
Assets:

 Cash and cash equivalents $132,625 $ 81,056
 Marketable securities 13,362 13,030
 Trade accounts receivable 83,748 88,954
 Other accounts receivable 8,129 17,815
 Prepaid expenses 10,951 9,082
 ________ ________


 Total current assets 248,815 209,937

 Marketable securities 13,046 14,925
 Property and equipment, net 25,039 24,627
 Computer software construction costs, net 32,118 31,610
 Other assets 16,986 12,097
 ________ ________

 Total assets $336,004 $293,196
 ________ ________
 ________ ________

Liabilities and shareholders' equity:

 Current liabilities $108,399 $107,608
 Other long-term liabilities 7,482 7,751
 Shareholders' equity 220,123 177,837
 ________ ________

 Total liabilities and shareholders'
 equity $336,004 $293,196
 ________ ________
 ________ ________
COPYRIGHT 1998 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Geographic Code:1USA
Date:Oct 19, 1998
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