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SERVING SOFTWARE REPORTS THIRD QUARTER RESULTS

 MINNEAPOLIS, Nov. 2 /PRNewswire/ -- Serving Software Inc. (NASDAQ: SERV) today announced net income of $58,000, equal to 1 cent per share, for its third quarter ended Sept. 30, 1993. This compares with net income of $102,000, or 2 cents per share, for the third quarter last year.
 Third quarter revenue was $3,230,000, compared with $3,217,000 a year ago. Revenue from existing clients for add-on sales and software support increased 66 percent for the quarter to $1,177,000, compared with $710,000 a year ago.
 Net loss for the nine months was $132,000, or 3 cents per share, compared with net income of $261,000, equal to 6 cents per share, for the same period a year ago. Revenue for the first three quarters was $9,322,000, compared with $8,726,000 last year.
 "New system sales for the third quarter historically are not as strong as the second and fourth quarters," said John Haugo, president and CEO. "This year, uncertainty over the impact of healthcare reform continues to cause many hospitals to delay capital purchase decisions, which has slowed our overall revenue growth. At the same time, we have spent aggressively in research and development, marketing and client support, which has caused all of these expenses to increase as a percentage of sales. We believe the disappointments in sales are temporary, and that our spending is an investment in the future.
 "Some components of healthcare reform are now becoming more certain, which we believe will translate into increased demand for hospital information systems. Consistent with our historical pattern, we anticipate the fourth quarter again will be our strongest, leading us to record sales and earnings for the full year."
 Minneapolis-based Serving Software develops, markets and supports computer-based software systems for hospital resource management. The company's systems, installed in more than 750 hospitals worldwide, are designed to ensure efficient resource management at both departmental and hospital-wide levels. Hospitals use the systems to increase productivity, reduce operating costs, enhance revenue opportunities, improve quality assurance and enhance patient care.
 SERVING SOFTWARE INC.
 Consolidated Statements of Operations
 (Unaudited -- In thousands, except per-share amounts)
 Three months ended Nine months ended
 9/30/93 9/30/92 9/30/93 9/30/92
 Revenue $3,230 $3,217 $9,322 $8,726
 Cost of sales 641 863 1,973 2,275
 Gross profit 2,589 2,354 7,349 6,451
 Software research 289 160 763 369
 Selling, general and admin. 2,196 2,008 6,655 5,596
 Interest expense 4 9 9 44
 Income (loss) before income
 taxes and cumulative effect
 of accounting change 100 177 (78) 442
 Income tax expense (benefit) 42 75 (33) 181
 Income (loss) before cumulative
 effect of accounting change 58 102 (45) 261
 Cumulative effect of accounting
 change for income taxes -- -- (87) --
 Net income (loss) $58 $102 $(132) $261
 Income (loss) per share before
 cumulative effect of
 accounting change $.01 $.02 $(.01) $.06
 Cumulative effect of
 accounting change per share .00 .00 (.02) .00
 Net income (loss) per share
 of common stock $.01 $.02 $(.03) $.06
 Weighted average common
 shares outstanding 4,899 4,914 4,758 4,496
 -0- 11/2/93
 /CONTACT: John Swenson, of Swenson/Falker Associates, 612-371-0000, for Serving Software; or John Haugo or Wes Schultz of Serving Software, 612-623-4038/
 (SERV)


CO: Serving Software Inc. ST: Minnesota IN: CPR SU: ERN

CP-DB -- MN018 -- 9811 11/02/93 16:32 EST
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Publication:PR Newswire
Date:Nov 2, 1993
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