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KNOWLEDGEWARE ANNOUNCES FY 1993 FIRST QUARTER PROFIT

 KNOWLEDGEWARE ANNOUNCES FY 1993 FIRST QUARTER PROFIT
 ATLANTA, Oct. 22 /PRNewswire/ -- KnowledgeWare, Inc. (NASDAQ-NMS: KNOW) today announced revenues and net income for the quarter ended Sept. 30, 1992.
 Revenues for the first quarter of fiscal year 1993 were $29,440,000 compared with $21,598,000 reported in the same period last year. Net income for the quarter totaled $743,000 or $.06 per share, compared to fiscal 1992 first quarter net loss of $4,872,000 or $.42 per share. First quarter earnings marked the fourth consecutive quarter of profitability since the company's loss in the first quarter of fiscal 1992.
 KnowledgeWare Chairman and CEO Fran Tarkenton commented, "We are pleased with our profit level for the first quarter, which is historically our toughest quarter. We have successfully maintained expense controls, and siomy is still not hospitable to discretionary purchases l e software but we are encouraged by modestly strengthened demand across our product line," Tarkenton continued. "We attribute this in part to the various acquisitions concluded over the last 18 months and the resultant strength and breadth of our portfolio."
 Significant company events during the quarter included the announcement of inclusion of all of KnowledgeWare's products in IBM's AD/Cycle framework. IBM has been marketing 13 KnowledgeWare products since September 1989. Under the expanded agreement, IBM will market an additional eight products.
 According to KnowledgeWare President Donald Addington, "IBM's selection of KnowledgeWare as its full lifecycle AD/Cycle development solution is the culmination of two years of effort by our respective development and marketing organizations, and an acknowledgement of the strength of KnowledgeWare's products and the significance of our 4,000 customers around the world. Our marketing activities with IBM are enhanced by our work together on IBM's support for workgroup development. We have received very positive feedback from our customers on these initiatives."
 Addington continued, "Our multi-faceted relationship with IBM remains strategic. On the one hand, IBM's worldwide application development organization is one of our top prospective customers, and their use of our products for internal development is very significant. And on the other, IBM continues to be the single most influential vendor in our target market. We respect the value of our joint marketing relationship and cooperative development efforts as both KnowledgeWare and IBM work to offer solutions to our mutual customer base."
 Results for the quarter ended Sept. 30, 1992, also include the shipment of the company's 100,000th product. "We are very proud of this milestone," said Addington. "With over 4,000 customer accounts, 100,000 products shipped, and many interfaces between our encyclopedia and third party software products, our application development tools have become a de facto standard in the industry."
 Looking forward, Tarkenton commented, "One area of focus for us is growing non-product revenues to broaden and diversify our revenue base. We announced this week the acquisition of Computer & Engineering Consultants, Ltd., a Michigan-based consulting and methodology company; the formation of a new consulting division; and the addition of a new executive, Jonathan Harding, to run the division. With the completion of the CEC acquisition this division will comprise over 50 professionals well-versed in our products and their practical use. We expect continued growth in this area of the business."
 KnowledgeWare is the market leader in providing application development solutions for client/server, mid-range, and mainframe environments. KnowledgeWare's Application Development Workbench encyclopedia has become a de facto standard for business applications development, and is currently used by more than 4,000 companies and supported by 70 independent software vendor and consultant products. At Sept. 30, 1992, KnowledgeWare had shipped more than 100,000 products to 32 countries.
 For more information, contact KnowledgeWare, Inc., 3340 Peachtree Road NE, Atlanta, GA 30326; 404-231-8575
 KNOWLEDGEWARE, INC. AND SUBSIDIARIES
 Condensed Consolidated Statements of Operations
 (In thousands, except per share data) (Unaudited)
 Three months ended
 9/30/92 9/30/91
 Revenues:
 Software product license $19,433 $14,080
 Service agreement 8,344 5,766
 Consulting and education 1,505 1,330
 Other 158 422
 Total 29,440 21,598
 Costs and expenses:
 Cost of revenues 3,985 3,741
 Selling and marketing 13,834 13,822
 General and administrative 3,165 6,131
 Research and development 7,504 6,384
 Total 28,488 30,078
 Income (loss) from operations 952 (8,480)
 Interest income, net 228 622
 Income (loss) before income taxes 1,180 (7,858)
 Provision (benefit) for income taxes 437 (2,986)
 Net income (loss) $ 743 $(4,872)
 Net income (loss) per common share $ .06 $ (.42)
 Weighted average number of common
 and common equilavent shares
 outstanding 12,343 11,666
 KNOWLEDGEWARE, INC. AND SUBSIDIARIES
 Condensed Consolidated Balance Sheets
 (In thousands, except share data) (Unaudited)
 ASSETS 9/30/92 6/30/92
 Current assets:
 Cash and cash equivalents $ 35,209 $ 40,125
 Trade accounts receivable:
 Receivable from related parties 10,609 4,636
 Other, net 17,534 20,882
 Inventories 565 685
 Prepaid expenses and other current
 assets 2,772 2,481
 Prepaid income taxes and income
 taxes receivable 2,870 3,903
 Deferred income tax benefits 5,208 5,208
 Total current assets 74,767 77,920
 Property and equipment:
 Leasehold improvements 5,223 5,208
 Furniture and fixtures 16,788 16,754
 Computers and related equipment and
 software 20,572 20,531
 Total 42,583 42,493
 Less: accumulated depreciation and
 amortization 17,592 15,787
 Total 24,991 26,706
 Other assets:
 Acquired and developed software, net 24,049 23,928
 Other long-term assets 1,145 627
 Total 25,194 24,555
 Total $124,952 $129,181
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Trade accounts payable $ 3,915 $ 3,888
 Deferred revenues 23,710 25,247
 Accrued expenses and other
 current liabilities 10,123 11,109
 Accrued compensation and payroll taxes 4,058 6,601
 Commissions payable to related parties 598 878
 Income taxes payable 326 0
 Total current liabilities 42,730 47,723
 Deferred income taxes 4,616 4,616
 Shareholders' equity:
 Common stock, without par value --
 100,000,000 shares authorized;
 11,823,835 and 11,814,545 shares
 issued and outstanding on Sept. 30, 1992
 and June 30, 1992 respectively 50,817 50,796
 Retained earnings 26,789 26,046
 Total shareholders' equity 77,606 76,842
 Total $124,952 $129,181
 -0- 10/22/92
 /CONTACT: Rick Gossett of KnowledgeWare, 404-231-8475, ext. 2138/
 (KNOW) CO: KnowledgeWare, Inc. ST: Georgia IN: CPR SU: ERN


BR-CF -- AT015 -- 3751 10/22/92 15:04 EDT
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