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SIERRA ON-LINE INC. POSTS 24 PERCENT HIGHER REVENUES FOR FISCAL YEAR 1992

 SIERRA ON-LINE INC. POSTS 24 PERCENT HIGHER REVENUES
 FOR FISCAL YEAR 1992
 COARSEGOLD, Calif., May 13 /PRNewswire/ -- Sierra On-Line Inc. (NASDAQ: SIER) announced a 24 percent increase in revenues, or total revenues of $43.2 million, for the fiscal year ended March 31, 1992. For fiscal year 1991, revenues were $34.7 million. The company reported the increase in revenue resulted from the introduction of many successful new games and its expansion into the European marketplace. The company benefited from a full year's operation of the European sales office in 1992, contrasted with only six months in 1991. Forty percent of the game sales in 1992 were products released within the last 12 months. International sales grew 70 percent in 1992 and accounted for 25 percent of the total sales for the fiscal year.
 Revenues for the fourth quarter of 1992 were $9.9 million, compared to $9.5 million for the prior year. "Aces of the Pacific," a release with considerable advance orders, was expected to ship in the fourth quarter; instead, Sierra expects to ship this product in the first quarter of the 1993 fiscal year.
 Net earnings were $3,687,000, or $0.65 per share, for fiscal year 1992; and $5,391,000, or $0.97 per share, for fiscal year 1991. For the fourth quarter, net earnings were $281,000, or $0.05 per share, compared to $1,107,000, or $0.20 per share, in the fourth quarter of 1991.
 During 1992, The Sierra Network (TSN), an on-line multiplayer interactive gaming service, proved technical feasibility with more than 8,000 customers at year-end. The investment in TSN resulted in a $2.1 million negative impact on operating income for 1992 vs. $.5 million in fiscal year 1991.
 According to Ken Williams, president and chief executive officer of Sierra, "Our 1992 fiscal year was focused market share growth and diversification which impacted our margins and operating income. Sierra experienced considerable market share growth in education, flight simulation, international markets, additional computer formats, and continued its success in its core adventure game product lines. The dominance of our entertainment products was especially strong during the Christmas quarter. In December 1991, no less than four Sierra game products made the SPA Top Ten Bestsellers list, including Police Quest III at No. 1. This was our best showing in the history of the company."
 Sierra On-Line Inc., along with its wholly owned subsidiary Dynamix Inc., publishes entertainment and educational software for IBM PCs and PC-compatibles, Apple Macintosh and Commodore Amiga computers.
 SIERRA ON-LINE INC. AND SUBSIDIARIES
 Consolidated Statement of Earnings
 (in thousands, except per share data)
 Three Months Ended
 March 31,
 (Unaudited)
 1992 1991
 Revenues
 Net sales $9,437 $9,165
 Other 414 367
 Total revenues $9,851 $9,532
 Cost of Sales
 Manufacturing costs 3,872 3,194
 Amortization of software
 development costs 1,116 886
 Royalties 289 401
 Total cost of sales 5,277 4,481
 Operating expenses
 Selling, general and
 administrative 3,439 3,299
 Research and development 743 439
 Total operating expenses 4,182 3,738
 Earnings from operations 392 1,313
 Non-Operating Income (Expense)
 Interest income (net) 134 122
 Amortization of goodwill (126) (53)
 Total non-operating income 8 69
 Earnings before income taxes 400 1,382
 Income taxes 119 275
 Net earnings $281 $1,107
 Net earnings per common and
 common equivalent share $0.05 $0.20
 Average outstanding
 common and common
 equivalent shares 5,949,736 5,596,641
 Twelve Months Ended
 March 31,
 1992 1991
 Revenues
 Net sales $41,681 $32,890
 Other 1,507 1,827
 Total revenues $43,188 $34,717
 Cost of sales
 Manufacturing costs 14,913 11,088
 Amortization of software
 development costs 5,569 1,716
 Royalties 1,502 1,707
 Total cost of sales 21,984 14,511
 Operating expenses
 Selling, general and
 administrative 13,621 10,894
 Research and development 2,208 1,588
 Total operating expenses 15,829 12,482
 Earnings from operations 5,375 7,724
 Non-Operating Income
 (Expense)
 Interest income (net) 397 626
 Amortization of goodwill (355) (106)
 Total non-operating income 42 520
 Earnings before income taxes 5,417 8,244
 Income taxes 1,730 2,853
 Net earnings $3,687 $5,391
 Net earnings per common and
 common equivalent share $0.65 $0.97
 Average outstanding
 common and common
 equivalent shares 5,689,504 5,558,410
 Consolidated Condensed Balance Sheet
 (In thousands)
 March 31, March 31,
 1992 1991
 Assets
 Current assets:
 Cash and cash equivalents $32,296 $2,907
 Marketable investment
 securities $3,353 4,961
 Accounts receivable (net) 5,288 5,448
 Refundable income taxes 1,451 428
 Inventories 4,354 4,289
 Deferred income tax benefit 1,802 1,531
 Other current assets 595 371
 Total current assets $49,139 $19,935
 Property, plant &
 equipment (net) 6,970 6,358
 Software development costs 8,816 3,965
 Goodwill 2,116 2,037
 Other assets 257 133
 Total assets $67,298 $32,428
 Liabilities and shareholders'
 equity:
 Current liabilities
 Accounts payable and other
 accrued expenses $4,053 $2,484
 Royalties payable 768 1,090
 Income taxes payable --- 297
 Total current liabilities $4,821 $3,871
 Deferred income
 tax liability $4,131 $1,817
 Other liabilities 6 324
 Total liabilities $8,958 $6,012
 Shareholders' equity $58,340 $26,416
 Total liabilities
 and shareholders equity $67,298 $32,428
 -0- 5/13/92
 /CONTACT: Bruce E. Grant, CFO, VP-finance, of Sierra On-Line, 209-683-4468/
 (SIER) CO: Sierra On-Line ST: California IN: CPR SU: ERN


AL-KJ -- LA042 -- 9978 05/13/92 20:36 EDT
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Date:May 13, 1992
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