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SPINNAKER SOFTWARE ANNOUNCES $4.2 MM WRITE-OFF OF FORMAT ACQUISITION RESULTING IN QUARTERLY AND ANNUAL LOSS

 SPINNAKER SOFTWARE ANNOUNCES $4.2 MM WRITE-OFF OF FORMAT ACQUISITION
 RESULTING IN QUARTERLY AND ANNUAL LOSS
 CAMBRIDGE, Mass., Sept. 29 /PRNewswire/ -- Spinnaker Software Corporation (NASDAQ: SPKR) today announced results for the three months and year ended June 30, 1992, of losses of $4,834,878 and $3,752,411 or 42 cents and 32 cents per share, respectively. The losses resulted primarily from a decision to take a charge of $4,197,672 to write-off the capitalized value of the acquisition of Format Software GmbH, in Cologne, Germany, and associated expenses.
 Commenting on the results, C. David Seuss, chairman and chief executive officer, said "Fiscal 1992 was a good year in terms of growth and profitability for the PFS: brand of small business software. The write-off of Format represents the company's decision to focus its corporate information products business on the Personal Access family of end-user data access and reporting tools. While the Format acquisition initially propelled us into custom application development products, the business has evolved into data access and reporting. The products that support the data access and reporting business have been developed by Spinnaker in Cologne and other locations since the acquisition. We have decided to close the Cologne office and move all future development to Cambridge.
 "Despite the loss resulting largely from the Format Write-off, there were many positive aspects to fiscal 1992. We worked hard to achieve the 89 percent increase in revenue. We improved gross margin from 63 percent of revenue in fiscal 1991 to 64 percent in fiscal 1992 despite the price war that is presently raging in the software industry. Selling, general and administrative expenses were reduced from 64 percent of revenue in fiscal 1991 to 59 percent of revenue in fiscal 1992.
 "Our PFS: business established itself as a leading provider of Windows software to the booming small business market. PFS: WindowWorks has sold over 1 million copies since it was introduced just before the beginning of fiscal 1992. The new PFS: products such as PFS: Publisher, PFS: Prospect, PFS: Write. PFS: Resume Pro were launched; and the Easy Working for Windows brand was created to exploit the more price sensitive segments of the small business software market. During the year great progress was made expanding our distribution in key channels such as office supply chains, PC superstores, software specialty chains, warehouse clubs, and mass merchandisers. In addition, new OEM customers began bundling PFS: WindowWorks, including NEC, Zenith, and Compaq with its very popular ProLinea and Contura lines. Most recently, Dell became our latest new OEM bundler of PFS:WindowWorks. And in fiscal 1992, Spinnaker began serious efforts to build a new channel through direct marketing, meeting with encouraging initial success.
 "Personal Access was launched in December 1991. While the revenue contributions from Personal Access have not yet reached the level required to be profitable on an operating basis, there are many corporations working with the product on a pilot or evaluation basis. Joint marketing agreements were announced with Information Builders, Sybase, Ingres, and Micro Decisionware. Just before the beginning of fiscal 1992, Oracle shipped OracleCard, which is based on technology licensed from Spinnaker. We have every reason to believe that end-user data access and reporting tools will be an important and growing category, and that our products and technology are unique and compelling."
 Commenting on the quarterly results, Seuss said, "In addition to the write-off of the Format acquisition, the quarterly results were adversely affected by Microsoft's new Version 3.1 of Windows not being fully compatible with applications written for the prior Version 3.0. Microsoft made a late change in Windows 3.1 as it related to TrueType fonts which adversely affected all software developers utilizing font scaling technology. Spinnaker experienced lowered sales and higher costs of goods as we replaced Windows 3.0-based products in the distribution channel with Windows 3.1-based products. The taxes accrued in the fourth quarter may appear unusual in the context of a loss, but many of the expenses provided as additional reserves and write-offs for are not deductible for tax purposes until later time periods."
 Spinnaker Software Corporation, headquartered in Cambridge, Mass., is a leading provider of complete software solutions with superior usability that empower end users to be self-sufficient.
 SPINNAKER SOFTWARE RESULTS
 Three Months Ended Year Ended
 6/30/92 6/30/91 6/30/92 6/30/91
 Revenues $6,800,845 $6,429,600 $30,016,979 $15,906,231
 Gross margin 4,205,314 4,290,971 19,118,798 9,988,200
 Selling, general
 & adminstration 4,489,180 3,778,882 17,640,806 10,187,526
 Format acquisition
 write-off 4,197,672 --- 4,197,672 ---
 Interest 215,990 196,826 827,731 559,874
 Taxes 137,350 --- 205,000 ---
 Net income(loss) (4,834,878) 315,263 (3,752,411) (759,200)
 Earnings (loss)
 per share (42 cents) 2 cents (32 cents) (7 cents)
 Weighted avg.
 number of shares
 outstanding
 (primary & fully
 diluted) 11,611,125 13,706,760 11,574,531 10,256,881
 -0- 9/29/92
 /CONTACT: Mike Byers of Spinnaker Software, 617-494-1200, ext. 257/
 (SPKR) CO: Spinnaker Software, Inc. ST: Massachusetts IN: CPR SU: ERN


TM -- NE012 -- 4587 09/29/92 17:59 EDT
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Date:Sep 29, 1992
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