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ROSS SYSTEMS REPORTS FIRST QUARTER RESULTS

 ROSS SYSTEMS REPORTS FIRST QUARTER RESULTS
 REDWOOD CITY, Calif., Oct. 27 /PRNewswire/ -- Ross Systems, Inc.


(NASDAQ: ROSS) today announced results for the first quarter of fiscal 1993, ended Sept. 30.
 Revenues for the quarter increased from $15.5 million the prior year to $16.5 million in the current year. In the quarter, the company accrued charges of approximately $6.4 million (pre-tax) associated with the prior acquisitions of Argonaut Information Systems and the Ross Systems Europe companies. Inclusive of these charges, net earnings for the quarter declined from $255,000 in the prior year to a net loss of approximately $6.3 million the current year, resulting in a current quarter loss per share of $0.66 compared to earnings per share of $0.03 for the same period in the prior year.
 Charges taken in the quarter included approximately $4.7 million associated with earn-out payments relating to the acquisition of Argonaut Information Systems in fiscal 1990. The majority of these charges have been allocated to in-process research and development, and compensation expense. In addition, approximately $1.7 million was accrued in conjunction with incentive compensation associated with the acquisition of the Ross Systems Europe companies in fiscal 1991. Argonaut and the Ross Systems Europe companies both have demonstrated rapid growth since their acquisition. Annualized Argonaut product revenues were in the $2-3 million range when acquired in December 1989. During fiscal 1992, these products generated revenues of nearly $9 million, or 12 percent of the company's revenues. The Ross Systems Europe companies include all the company's European operations excluding those in the United Kingdom. When acquired in fiscal 1990, these companies had generated approximately $4.2 million in revenues in their first 15 months of operations. During fiscal 1992, these same companies generated over $15 million in revenues.
 In commenting on the quarter, Dennis Vohs, Ross Systems' chairman and CEO, said: "Revenues were less than anticipated while expenses before the acquisition-related charges were somewhat below plan. Historically, our software license revenues have been low during the summer quarter. The increasing size of our European business magnifies this issue because of the holiday impact on contract closings in Europe. While we aren't pleased with the amount of software license revenues closed in the quarter, we are pleased with the current level of prospective sales, which is particularly high in the process manufacturing and human resource systems markets. Financial systems, however, continue to be sluggish in the domestic marketplace.
 "Revenues from our manufacturing systems grew by 25 percent to $2.7 million, representing 16 percent of total revenues. Acceptance of these products in the U.S. has exceeded our expectations. In continental Europe, where we just completed both the introduction of the product and our first direct sale, our rapidly growing prospect base reflects significant opportunity in this market," he said.
 "Also during the quarter, the company installed the first UNIX versions of our Renaissance Financial product line in both the U.S. and Europe," said Vohs.
 Bud Little, Ross' newly named chief financial officer, stated: "It is also important to note that the company invested in launching our Hewlett-Packard line during the quarter. This included both product development and establishing a sales organization. The first product installations on this platform should occur next month, although related software license revenues will probably not be recognized until the third fiscal quarter."
 The company also announced the restatement of prior year revenues and earnings in order to adopt the AICPA's Statement of Position regarding software revenue recognition and began recognizing revenue from first year maintenance agreements on a ratable basis. The restatement will result in the lowering of fiscal year 1992, ended June 30, revenues from $75,854,000 to $75,470,000, and net earnings from $4,208,000, or $0.42 per share, to $4,022,000, or $0.40 per share. The restatement increased fiscal year 1992 first quarter, ended Sept. 30, 1991, revenues from $15,277,000 to $15,508,000 and net earnings from $184,000, or $0.02 per share, to $255,000, or $0.03 per share. Previously, the company recorded first year maintenance revenue as related software license fees were recognized.
 Ross Systems, Inc. was among the first companies to offer commercial accounting software in the mid-range market. Its primary focus has been on the Digital VAX market where the company has been a member of Digital's Cooperative Marketing Program (CMP) since 1984. Today, Ross Systems, Inc. develops and markets a broad range of business solutions in six strategic environments: Digital Alpha, VMS and OSF/1, HP-UX, UNIX, and Client/Server.
 Ross products encompass financial, human resources, and distribution systems as well as manufacturing and public sector applications complemented by a fourth generation application development language. The company has been following a corporate development strategy of broadening the product line and expanding through both internal growth and acquisitions.
 Ross Systems serves its customers through a network of over 32 offices worldwide. The company's corporate headquarters are located at 555 Twin Dolphin Drive, Redwood City, CA 94065; telephone, 415-593-2500.
 ROSS SYSTEMS, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (unaudited)
 3 months ended
 9/30/92 9/30/91(a)
 Revenues:
 Software produce licenses $ 5,665 $ 6,124
 Consulting and other services 5,771 5,146
 Maintenance 5,094 4,238
 Total 16,530 15,508
 Operating expenses:
 Cost of revenues 7,856 5,717
 Sales and marketing 7,501 5,372
 Product development 2,461 1,866
 General and administrative 2,491 1,894
 Charges for in-process research
 and development 4,091 ---
 Amortization of other assets 290 280
 Total 24,690 15,129
 Operating earnings (loss) (8,160) 379
 Interest income, net 10 67
 Earnings (loss) before inc. taxes (8,150) 446
 Income tax expense (benefit) (1,839) 191
 Net earnings (loss) $ (6,311) $ 255
 Net earnings (loss) per common
 and common equiv. share $ (0.66) $ 0.03
 Common and common equiv. shares
 used in computing earnings
 (loss) per common share 9,559 10,094
 (a) As restated for change in revenue recognition.
 ROSS SYSTEMS, INC. AND SUBSIDIARIES
 Consolidated Balance Sheets
 (In thousands)
 (unaudited)
 9/30/92 6/30/92(a)
 ASSETS
 Current assets:
 Cash and cash equivalents $ 7,741 $ 7,741
 Accounts receivable, net 28,272 32,749
 Prepaids and other current assets 2,534 1,722
 Deferred income taxes 3,190 3,277
 Total current assets 41,737 45,489
 Property and equipment 6,179 5,991
 Computer software costs 7,316 6,521
 Other assets 4,905 4,357
 Total $ 60,137 $ 62,358
 Liabilities and Shareholders' Equity
 Current liabilities:
 Current installments of debt $ 317 $ 250
 Accounts payable 4,150 4,210
 Accrued expenses 13,034 7,279
 Income taxes payable --- 1,328
 Deferred revenue 13,698 14,348
 Total current liabilities 31,199 27,415
 Long-term debt, less current
 installments 1,334 1,128
 Deferred income taxes 2,886 2,886
 Total liabilities 35,419 31,429
 Shareholders' equity:
 Common stock 40,900 40,640
 Accumulated deficit (16,464) (10,154)
 Cumulative translation
 adjustment 282 443
 Total shareholders' equity 24,718 30,929
 Total $ 60,137 $ 62,358
 (a) As restated for change in revenue recognition.
 Consolidated Statements of Operations
 (In thousands, except per share data)
 (Unaudited)
 RESTATED TO INCLUDE IMPACT OF SOP 91-1
 Three months ended Total
 9/30/91 12/31/91 3/31/92 6/30/92 Fiscal
 Revenues: 1992
 Software product
 license $ 6,124 $ 9,830 $ 7,490 $11,859 $35,303
 Consulting and other
 services 5,146 5,380 5,889 6,362 22,777
 Maintenance 4,238 4,273 4,326 4,553 17,390
 Total 15,508 19,483 17,705 22,774 75,470
 Operating expenses:
 Cost of revenues 5,717 6,234 6,284 6,764 24,999
 Sales and marketing 5,372 6,795 5,947 7,973 26,087
 Product development 1,866 2,432 2,439 2,370 9,107
 General and admin. 1,894 1,727 1,875 2,363 7,859
 Amortization of other
 assets 280 246 228 213 967
 Total ? 15,129 17,434 16,773 19,683 69,019
 Operating earnings 379 2,049 932 3,091 6,451
 Interest income, net 67 34 10 84 195
 Earnings before income
 taxes 446 2,083 942 3,175 6,646
 Income tax expense 191 913 406 1,114 2,624
 Net earnings $ 255 $ 1,170 $ 536 $ 2,061 $ 4,022
 Net earnings per common and
 common equiv. share $ 0.03 $ 0.12 $ 0.05 $ 0.20 $ 0.40
 Common and common equiv. shares
 used in computing earnings
 per common share 10,094 10,116 10,240 10,055 10,126
 -0- 10/27/92 R
 /CONTACT: Dennis Vohs, 415-593-2500, or Denise O'Connor, 404-851-1872, both of Ross Systems, or Barbara Kline of BKMPR, 415-694-7991, for Ross Systems/
 (ROSS) CO: Ross Systems, Inc. ST: California IN: CPR SU: ERN


BR-BN -- AT002 -- 5324 10/27/92 11:04 EST
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