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FOURTH SHIFT SECOND QUARTER 1993 REVENUE UP 119 PERCENT

 MINNEAPOLIS, Aug. 10 /PRNewswire/ -- Fourth Shift Corporation (NASDAQ: FSFT) today reported that revenue increased 119 percent to $9,550,000 for the second quarter ended June 30, 1993, up from $4,368,000 in the same period last year. Net income increased 471 percent to $788,000, or $0.12 per share, compared with second quarter 1992 net income of $138,000, or $0.02 per share. MSS license revenue was up 38 percent in the second quarter versus the same period last year, and license revenue from the JIT product line, acquired in December 1992, is on target with the 1993 roll-out plan.
 For the first six months of 1993, revenue was up 93 percent and net income increased 148 percent versus the same period last year. Specifically, revenue increased to $16,177,000 from $8,365,000; net income rose to $889,000 from $359,000; and earnings per share increased to $0.14 from $0.06.
 "We are pleased with our second quarter performance, which was above plan," said M.M. Stuckey, Fourth Shift chairman and chief executive officer. "I'm enthusiastic about the two-tiered product strategy we have in place. The JIT product line allows us to provide solutions to Fortune 1000 enterprises looking to downsize on Oracle and UNIX-based client/server open systems, while our PC/LAN-based product, MSS, remains squarely aimed at those cost-conscious industrial companies that prefer local-area networked open systems solutions."
 Fourth Shift closed on its initial public offering July 21, 1993. The company issued 3,050,000 shares at $6.50 per share.
 Fourth Shift Corporation is a developer and marketer of client/server application software for industrial management. The company markets two product lines, both of which are designed to take advantage of corporate downsizing and demassification trends and the shift from mainframe systems to client/server platforms. Fourth Shift has approximately 1,500 customers in 37 countries. In the United States, its products are sold through a direct sales force and a network of value-added resellers. Internationally, Fourth Shift products are sold through wholly owned business units in Canada, Mexico, Europe and mainland China, and elsewhere by distributors.
 FOURTH SHIFT CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except earnings per share and shares outstanding)
 (Unaudited)
 Three Months Ended Six Months Ended
 6/30/93 6/30/92 6/30/93 6/30/92
 REVENUE:
 Software licenses $3,800 $1,837 $6,266 $3,618
 Services 4,061 2,038 7,670 4,118
 Systems integration 1,689 493 2,241 629
 Total revenue $9,550 $4,368 $16,177 $8,365
 OPERATING EXPENSES:
 Cost of licenses 476 181 701 326
 Cost of services 2,343 1,178 4,614 2,257
 Cost of systems
 integration 1,308 399 1,741 504
 Selling and marketing 2,823 1,346 5,040 2,614
 Product development 912 708 1,407 1,494
 General and
 administrative 747 356 1,549 709
 Provision for
 doubtful accounts 38 12 51 24
 Total operating
 expenses $8,647 $4,180 $15,103 $7,928
 Operating profit $903 $188 $1,074 $437
 Other expense, net (48) (34) (89) (54)
 Income before
 provision for taxes $855 $154 $985 $383
 Provision for taxes (67) (16) (96) (24)
 Net income $788 $138 $889 $359
 Net income per
 common share $0.12 $0.02 $0.14 $0.06
 Shares used in
 common share
 computation 6,323,420 6,151,770 6,317,295 6,151,770
 FOURTH SHIFT CORPORATION AND SUBSIDIARIES
 Condensed Consolidated Balance Sheets
 (In thousands)
 ASSETS 6/30/93 12/31/92
 (unaudited)
 Current assets
 Cash and equivalents $159 $1,868
 Accounts receivable, less allowance
 for doubtful accounts of $216,000
 at June 30, 1993 and $198,000 at
 Dec. 31, 1992 5,473 2,928
 Cost and estimated earnings in
 excess of billings 509 --
 Inventories 358 287
 Prepaid expenses 1,007 489
 Total Current Assets $7,506 $5,572
 Furniture, fixtures and equipment, net 1,579 1,406
 Intangible assets:
 Acquired software 950 1,056
 Goodwill, net 355 --
 Total Assets $10,390 $8,034
 LIABILITIES AND SHAREHOLDERS' EQUITY
 6/30/93 12/31/92
 Current liabilities
 Current maturities of long-term debt $624 $810
 Bank line of credit 1,045 --
 Accounts payable 3,206 2,922
 Accrued expenses 4,035 4,710
 Deferred revenue and accrued
 losses on contracts 9,408 8,470
 Total current liabilities $18,318 $16,912
 Deferred revenue 300 283
 Long-term debt 111 217
 Minority interest -- 158
 SHAREHOLDERS' EQUITY
 Preferred stock $8,011 $8,011
 Common stock 20 20
 Additional paid-in capital 2,664 2,315
 Accumulated deficit (19,034) (19,882)
 Total shareholders' equity (deficit) $(8,339) $(9,536)
 Total liabilities and shareholders'
 equity $10,390 $8,034
 /CONTACT: Jeff Traynor, CFO of Fourth Shift Corporation, 612-851-1914/
 (FSFT)


CO: Fourth Shift Corporation ST: Minnesota IN: CPR SU: ERN

AL -- MN019 -- 1418 08/10/93 18:03 EDT
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Date:Aug 10, 1993
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