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STATE OF THE ART INC. FOURTH QUARTER EARNINGS INCREASE 102 PERCENT

 STATE OF THE ART INC. FOURTH QUARTER EARNINGS INCREASE 102 PERCENT
 IRVINE, Calif., Jan. 16 /PRNewswire/ -- Accounting software developer State Of The Art Inc. (NASDAQ: SOTA) today reported that net income for the three months ended Dec. 31, 1991 increased 102 percent to $1,872,000, equal to $0.20 per share, compared with $926,000, or $0.12 per share, in the fourth quarter of the previous year. Revenue for the same period increased 19 percent while pre-tax income increased 103 percent.
 On revenues of $6,424,000 for the quarter, the company recognized earnings before income taxes of $3,088,000, representing a 48 percent pre-tax profit, the highest quarterly pre-tax profit in the company's history. Fourth quarter revenues also posted a 40 percent gain over third quarter revenues this year.
 "Our substantial increase in revenue this quarter reflects increases in virtually every revenue category as well as both of our distribution channels," said David S. Samuels, chairman and chief executive officer. "While the fourth quarter each year has historically been our best quarter, with this year no exception, I am hopeful that the overall strength of the quarter may foretell early signs of a nationwide economic recovery."
 On the earnings side, Samuels said, "We remain entirely committed to our strong focus on expense controls at all times, no matter what the economic conditions; this year, this philosophy has again proven itself to be a winner."
 State Of The Art closed the year at $19,120,000 in total revenues with a pre-tax margin of 42 percent and an after-tax margin of 25 percent or $4,812,000, up 56 percent over 1990. Earnings per share were reported at $0.55 for 1991 compared to $0.39 for 1990.
 The company successfully completed an initial public offering of 3,450,000 shares of common stock at an initial public offering price of $9 per share on May 23, 1991. The company's stock closed at $12 per share on Thursday, Jan. 16.
 State Of The Art develops and markets high-end accounting software for microcomputers. The company's product line MAS90 (R) EVOLUTION/2 (TM), has been nationally recognized by a host of independent industry publications, its Authorized Resellers and its end- users for its superior combination of power and ease-of-use. MAS90 EVOLUTION/2, which consists of 15 separate application modules, can be integrated into a comprehensive accounting solution for virtually any size or type of business and is available for all three industry standard operating environments: single-user DOS, Network and UNIX.
 The company's Authorized Resellers and Software Consultants, located throughout the United States and Canada, are comprised of over 4,300 public accounting firms and 700 professional Value-Added Resellers, who actively sell, recommend and support the MAS90 EVOLUTION/2 product line. End-user list prices for most of the company's general accounting and vertical market applications begin at $799 and $999 each, respectively.
 STATE OF THE ART INC.
 Corporate Fact Sheet
 Jan. 16, 1992
 Description of business: Develops, produces, markets and
 supports high-end microcomputer
 accounting software.
 Corporate address: 56 Technology
 Irvine, CA 92718
 Telephone: 714-753-1222
 Trading information: (NASDAQ: SOTA)
 9,144,513 shares outstanding
 IPO-to-date volume: 13,147,000 shares
 as of 12/31/91.
 IPO-to-date price range: $6.25 to $13
 as of 12/31/91.
 Current price: $12
 Key ratios: Current ratio: 11.3,
 ROE: 31 pct.
 ROA: 25 pct.
 Officers: Chairman and Chief Executive Officer:
 David S. Samuels
 Vice President Finance and Chief
 Financial Officer:
 Joseph R. Armstrong
 STATE OF THE ART INC.
 Income Statement
 (In thousands, except per share data)
 Three-months ended Year ended
 Fourth quarter
 Dec. 31, Dec. 31,
 1991 1990 1991 1990
 Revenue $6,424 $5,416 $19,120 $16,156
 Cost of revenues 1,007 1,040 3,206 3,275
 Gross profit 5,417 4,376 15,914 12,881
 Operating expenses 2,617 2,955 8,780 8,127
 Operating income 2,800 1,421 7,134 4,754
 Other income 288 97 802 310
 Income before taxes 3,088 1,518 7,936 5,064
 Income taxes 1,216 592 3,124 1,980
 Net income $1,872 $926 $4,812 $3,084
 Earnings per share $0.20 $0.12 $0.55 $0.39
 Weighted average common
 shares and equivalents 9,375 7,879 8,788 7,897
 STATE OF THE ART INC.
 Balance Sheets
 (In thousands)
 Dec. 31, Dec. 31
 1991 1990
 Assets:
 Cash and cash equivalents $22,676 $6,785
 Accounts receivable 971 828
 Inventory 670 636
 Other current assets 195 302
 Total current assets 24,512 8,551
 Equipment 1,376 1,639
 Capitalized costs 1,188 665
 Other assets 232 173
 Total $27,308 $11,028
 Liabilities and Shareholders' equity:
 Current liabilities $2,162 $2,530
 Non-current liabilities 811 1,518
 Total liabilities 2,973 4,048
 Shareholders' equity 24,335 6,980
 Total $27,308 $11,028
 -0- 1/16/92
 /CONTACT: Joe Armstrong, VP-finance of State Of The Art, 714-753-1222/
 (SOTA) CO: State Of The Art ST: California IN: CPR SU: ERN


AL -- LA029 -- 0792 01/16/92 19:56 EST
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