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KNOWLEDGEWARE RELEASES FY 1993 OPERATING RESULTS Company Reports Record Revenues For Its Fourth Quarter, Fiscal Year

    ATLANTA, Aug. 13 /PRNewswire/ -- KnowledgeWare, Inc. (NASDAQ-NMS: KNOW) today announced results for its fourth quarter and fiscal year ended June 30.
    Revenues for the fourth quarter of fiscal year 1993 were $40,426,000, compared to $34,493,000 in the same period last year.  Net income for the quarter totaled $2,779,000 or $0.21 per share, compared to fiscal 1992 fourth quarter net profit of $2,336,000 or $0.18 per share.
    Total revenues for fiscal year 1993 ending June 30 were $128,761,000, compared to $116,542,000 for fiscal year 1992.  As previously stated (March 18, 1993), due in part to corporate restructuring charges totaling $21,976,000 in its third quarter, the company reported a net loss for the year of $25,799,000 or $1.94 per share.  This compares to net income of $356,000 reported for fiscal year 1992 or $0.03 per share.  The company entered its fiscal year 1994 with a record backlog of $14.0 million of unfulfilled customer orders for products and services.
    "Our record-breaking fourth quarter reflects our momentum in the worldwide market, and we are pleased with the early indication of customer acceptance of our expanded products and services," said KnowledgeWare Chairman Francis Tarkenton.  "The contrast between our position last year and this year couldn't be more dramatic.  We have invested heavily in our transition from a one-product company to a multi-product application development solutions vendor, and we are poised to capitalize on our strengths and investments."
    Revenues for fiscal year 1993 reflect a greatly diversified product portfolio as well as expanded consulting and international organizations.  New products and technologies comprised $18.1 million, or 22.5 percent, of total product revenues for the year.  The company also reported $11.9 million in consulting and training, compared to $5.9 million in fiscal year 1992, a 100 percent increase.  In addition, service revenues grew 25 percent to $35.3 million in 1993 from $26.2 million in 1992.  International revenues comprised 27.1 percent of total revenues.
    "KnowledgeWare is making significant inroads into markets such as client/server application development with both new products and new versions of the Application Development Workbench," explained Donald P. Addington, KnowledgeWare president and chief operating officer.  "We are well positioned with the industry's broadest range of both integrated CASE and individual application development tools to support the open systems environments of new customers as well as our large and loyal customer base."
    The operating loss for the fiscal year was attributed to a third- quarter corporate restructuring charge, and to lower revenue levels from Europe during the third-quarter negotiation for acquisition of the company's distributors, as well as the high cost of initial European operations.  Other factors included increased product development costs for new computing environments, and the costs of marketing and selling new product lines through expanded distribution channels.
    KnowledgeWare is the market leader in providing application development solutions for client/server, mid-range and mainframe environments.  KnowledgeWare products are currently used by more than 4,200 companies and supported by 70 independent software vendor and consultant products.  As of June 30, KnowledgeWare had shipped more than 108,000 units to 35 countries.
                      KNOWLEDGEWARE, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS
            (In thousands, except share data) (Unaudited)
       ASSETS                              6/30/93        6/30/92
       Current assets:
    Cash and cash equivalents             $ 16,816       $ 40,452
       Trade accounts receivable:
    Receivable from related parties            ---          4,636
    Other, net                              36,894         21,33
    Inventories                                295            745
    Prepaid expenses and other current
     assets                                  6,934          2,502
    Prepaid income taxes and income
     taxes receivable                        2,479          3,903
    Deferred income tax benefits             3,374          5,208
    Total current assets                    66,792         78,785
       Property and equipment:
    Leasehold improvements                   4,621          5,208
    Furniture and fixtures                  16,976         16,754
    Computers and related equipment and
     software                               25,062         20,617
    Total                                   46,659         42,579
    Less:  accumulated depreciation and
     amortization                           22,896         15,799
    Total                                   23,763         26,780
       Other assets:
    Acquired and developed software, net    22,458         23,928
    Goodwill                                11,369            ---
    Other non-current assets                 1,299            637
    Total                                   35,126         24,565
    Total                                 $125,681       $130,130
       LIABILITIES AND SHAREHOLDERS' EQUITY
       Current liabilities:
    Payable under line of credit          $  2,000       $    ---
    Trade accounts payable                   8,863          3,947
    Deferred revenues                       26,932         25,247
    Accrued exps. and other current liabs.  13,851         11,215
    Accrued compensation and payroll taxes   9,083          6,601
    Commissions payable to related parties     ---            878
    Current portion of long-term debt        4,974            ---
    Total current liabilities               65,703         47,888
    Long-term debt                           3,624            ---
    Deferred income taxes                    2,622          4,616
       Shareholders' equity:
    Common stock, without par value --
     100,000,000 shares authorized;
     13,046,906 and 12,714,545 shares
     issued and outstanding in 1993
     and 1992, respectively                 54,124         52,436
    Foreign currency translation               217            ---
    Retained earnings (deficit)               (609)        25,190
    Total shareholders' equity              53,732         77,626
    Total                                 $125,681       $130,130
                          KNOWLEDGEWARE, INC.
            Condensed Consolidated Statements of Operations
          (In thousands, except per share data) (Unaudited)
       3 mos. ended                      6/30/93         6/30/92
       Revenues:
    Software product license             $26,126         $25,950
    Service agreement                      9,437           7,199
    Consulting and education               4,520           1,244
    Other                                    343             100
    Total                                 40,426          34,493
       Costs and expenses:
    Cost of revenues                       8,192           3,766
    Selling and marketing                 19,388          18,163
    General and administrative             4,108           2,963
    Research and development               5,564           5,521
    Corporate restructuring charge           ---             ---
    Total                                 37,252          30,413
    Income (loss) from operations          3,174           4,080
    Interest income (expense), net          (395)            352
    Income (loss) before income taxes      2,779           4,432
    Provision (benefit) for income taxes     ---           2,096
    Net income (loss)                    $ 2,779         $ 2,336
    Net income (loss) per common share   $   .21         $   .18
    Weighted average number of common
     and common equilavent shares
     outstanding                          b#32           b  *j
H  @   Year ended                        6/30/93         6/30/92
       Revenues:
    Software product license            $ 80,307        $ 83,243
    Service agreement                     35,256          26,247
    Consulting and education              11,861           5,926
    Other                                  1,337           1,126
    Total                                128,761         116,542
       Costs and expenses:
    Cost of revenues                      24,538          15,598
    Selling and marketing                 66,570          62,373
    General and administrative            14,349          15,845
    Research and development              28,867          23,672
    Corporate restructuring charge        21,976             ---
    Total                                156,300         117,488
    Income (loss) from operations        (27,539)           (946)
    Interest income (expense), net           340           1,959
    Income (loss) before income taxes    (27,199)          1,013
    Provision (benefit) for income taxes  (1,400)            657
    Net income (loss)                   $(25,799)        $   356
    Net income (loss) per common share  $  (1.94)        $   .03
    Weighted average number of common
     and common equilavent shares
     outstanding                          13,283          13,110
    -0-             08/13/93
    CONTACT:  Rick Gossett of KnowledgeWare, 404-231-8575, ext. 2138, or Denese Van Dyne of Crescent Communications, 404-698-8650, for KnowledgeWare
    (KNOW) CO:  KNOWLEDGEWARE, INC. IN:  CPR SU:  ERN ST:  GA


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Date:Aug 13, 1993
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