Viasoft Provides Guidance on First Quarter Results.

PHOENIX--(BUSINESS WIRE)--Oct. 5, 1998--Viasoft, Inc. (Nasdaq NM:VIAS) today announced that based on preliminary information, it expects first quarter results to be significantly below expectations of the investment community. Based on information available to date, the Company estimates that total revenue for the quarter ended September 30, 1998 will be in the range of $24.2 million to $25.3 million, consisting of the following components: license revenue between $9.3 million to $9.7 million, services revenue between $6.9 million and $7.3 million and maintenance revenue between $8.0 million and $8.3 million. Excluding a write-off of purchased in-process research and development in connection with the transaction discussed below and the restructuring charge also discussed below, loss per share for the quarter is estimated to be in the range of $0.04 to $0.08 per share.

Included in operating expenses were approximately $2.0 million in research and development expenses for development license fees in connection with strategic distribution relationships entered into during the quarter and a provision for bad debt.

As previously reported, the Company will take a charge of approximately $5.0 million in the quarter ended September 30, 1998 in connection with the acquisition of exclusive worldwide marketing and development rights to SHL TRANSFORM, a knowledge-driven process management and productivity software toolset.

The Company is implementing a cost reduction and restructuring plan that includes a reduction in workforce of more than 10%, effective immediately, office consolidations and the write-down of certain intangibles. The Company will recognize a charge of approximately $4.5 million to $5.5 million related to this restructuring in the quarter ended September 30, 1998. The purpose of this restructuring plan is to allow the Company to increase its investment in its non-year 2000 solutions, as well as align expenses with a decrease in forecasted revenues.

Including the SHL transaction and restructuring charge, the loss per share for the quarter is estimated to be in the range of $0.37 to $0.41.

Commenting on the preliminary results, Steven D. Whiteman, chairman and chief executive officer, noted, "We saw growth in the services business, but were very disappointed with the weakness in license revenue worldwide, due in part to decreased demand for year 2000 solutions. While we believe that opportunities still exist in the year 2000 market, we have clearly shifted our focus to investing in application modernization solutions to meet our customers' needs beyond the year 2000."

These preliminary estimates are based on the information available to the Company at this time and are subject to revision once final financial statements are completed. The Company plans to announce its final first quarter results October 21, 1998 after the market closes.

Viasoft is a leading provider of business solutions, consisting of integrated technology and specialized professional services, designed to enable customers worldwide to cost-effectively manage and evolve their information technology assets. Viasoft's flagship products are the Existing Systems Workbench(R), a comprehensive, integrated toolset that enables the management and modernization of existing systems; Rochade(TM), an enterprise repository environment; and the OnMark 2000(TM) suite of tools for the desktop and client/server year 2000 challenge.

Headquartered in Phoenix, Ariz., Viasoft provides sales and services through regional offices in the United States, Canada, Australia, Europe, the Asia/Pacific region and a growing network of international subsidiaries and distributors. For more information on Viasoft's products and services, please visit the Company's World Wide Web site at www.viasoft.com.

The statements made in this press release that are not historical facts contain forward-looking information that involves risks and uncertainties. Important factors that may cause actual results to differ include, but are not limited to, market demand and acceptance, the impact of competitive products and services, risks associated with results and timing of technology development and commercialization, the Company's ability to manage growth and acquisitions of technology or businesses, the effect of economic and business conditions including risks inherent in international operations and the ability to attract and retain technical personnel, risks associated with, as well as the Company's ability to manage, a consulting services business and other risks detailed from time to time in the Company's Securities and Exchange Commission filings.