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SYSTEMS CENTER RESTRUCTURES, REPORTS LOSS FOR SECOND QUARTER

 SYSTEMS CENTER RESTRUCTURES, REPORTS LOSS FOR SECOND QUARTER
 Company Trims Workforce and Refocuses Product Lines;
 Incurs One-Time Charges
 RESTON, Va., July 27 /PRNewswire/ -- Systems Center Inc. (NYSE: SMX) reported today that while revenues increased in the second quarter, the company posted a net loss of $16.0 million, which included one-time restructuring charges of $11.5 million. The company also finalized a worldwide reduction in workforce of more than 10 percent, and announced the closing and consolidation of certain office locations, and the execution of letters of intent to sell its AS/400 and UNIX utility products.
 The restructuring actions will significantly reduce expenses and enable the company to focus resources on its strategic core businesses -- Advanced Systems Management, Network DataMover and VM systems software. Systems Center will continue its emphasis on meeting customers' growing requirements for enterprise-wide network and systems management solutions based upon emerging Open Systems standards.
 Revenues for the quarter ended June 30, 1992, were $31,001,005, up from $30,276,771 for the same period in 1991. The net loss for the quarter was $15,995,798 ($1.57 per share), compared to net income of $1,425,703 ($0.13 per share) for the quarter ended June 30, 1991. The 1992 second quarter loss includes $11.5 million in one-time charges associated with severance, office closings and the sale of the AS/400 and UNIX utility products.
 For the six months ended June 30, 1992, revenue increased to $62,064,342, up 8 percent from $57,275,829 for the first six months of 1991. Net income for the six months ended June 30, 1992 (including an income tax benefit of $17.0 million from the adoption of FAS 109, "Accounting for Income Taxes," in the first quarter) was $1,577,602 ($.10 per share), compared to net income of $1,980,038 ($0.19 per share) for the same period last year. All figures reflect the adoption of Statement of Position 91-1 (SOP 91-1), a new accounting standard for software revenue recognition.
 The company intends to transfer its UNIX utility products to Raxco Software Inc. of Rockville, Md., and its AS/400 utility products to Advanced Solutions International Corp. of Charlotte, N.C. Together, the AS/400 utility products and the UNIX utility products represented approximately 3 percent of the company's net revenues.
 As a member of the Open Software Foundation and the OSI Network Management Forum, Systems Center remains committed to UNIX/Open Systems strategies for its network and system products, and is retaining key technical staff to expand that strategy. A UNIX version of Systems Center's market leading data transfer product, Network DataMover, is currently under development. The company will also continue to market its AS/400 version of Network DataMover.
 In making today's announcement, Chairman and Chief Executive Officer Robert E. Cook stated that "Revenues for the second quarter fell well short of our expectations. Sales were adversely affected worldwide by weak economic conditions, and sales of our UNIX and AS/400 utility products continued to be disappointing. The introduction in Q2 of our SOLVE:Information and SOLVE:Automation solutions in North America generated a high-level of interest, but too late to impact Q2 revenues."
 In response to the second quarter shortfall, Cook added "We have reduced our staffing and costs to a level we believe to be appropriate given current revenue levels, without affecting our ability to continue to invest in our core businesses. We should begin to see significant benefits from the cost reductions in the third quarter of this year, but they will not be fully realized until 1993."
 Cook noted, "We have decided to do fewer things better. We will concentrate on those markets where we have a competitive advantage, and where we see significant opportunity for growth."
 Systems Center Inc. develops, markets and supports systems and network management software. The company's products assist in the automation and control of computing environments, and are marketed in 60 countries.
 SYSTEMS CENTER INC.
 Summary of Operations
 Three Months Ended June 30, 1992 1991
 (as restated)
 Net revenues $31,001,005 $30,276,771
 Net income (loss) ($15,995,798) $1,425,703
 Less: preferred dividends (269,269) (14,795)
 Net income (loss) available to
 common shareholders ($16,265,067) $1,410,908
 Primary earnings (loss) per
 common and dilutive common
 equivalent share ($1.57) $0.14
 Fully diluted earnings (loss)
 per common share -- assuming
 full dilution ($1.57) $0.13
 Weighted average common shares
 and common equivalent shares
 outstanding:
 Primary 10,332,000 10,295,000
 Fully diluted 10,332,000 10,546,000
 Six Months Ended June 30, 1992 1991
 (as restated)
 Net revenues $62,064,342 $57,275,829
 Income (loss) before cumulative
 effect of accounting change ($15,422,398) $1,980,038
 Cumulative effect of change in
 method of accounting for
 income taxes 17,000,000 ---
 Net income 1,577,602 1,980,038
 Less: preferred dividends (538,538) (14,795)
 Net income available to common
 shareholders $1,039,064 $1,965,243
 Primary earnings (loss) per
 common and dilutive common
 equivalent share:
 Income (loss) before cumulative
 effect of accounting change ($1.55) $0.19
 Cumulative effect of change
 in method of accounting
 for income taxes 1.65 ---
 Net income $0.10 $0.19
 Fully diluted earnings (loss)
 per common share -- assuming
 full dilution:
 Income (loss) before
 cumulative effect of
 accounting change ($1.55) $0.19
 Cumulative effect of change
 in method of accounting
 for income taxes 1.65 ---
 Weighted average common shares
 and common equivalent shares
 outstanding:
 Primary 10,307,000 10,220,000
 Fully diluted 10,307,000 10,471,000
 -0- 7/27/92
 /EDITOR'S NOTE: Advanced Systems Management, SOLVE:Automation and SOLVE:Information are trademarks and Network DataMover is a registered trademark of Systems Center Inc. UNIX is a registered trademark of UNIX Systems Laboratories Inc. VM is a trademark and AS/400 is a registered trademark of International Business Machines Corp. Open Software Foundation is a trademark of Open Software Foundation Inc.
 /CONTACT: Kathleen Janson of Systems Center, 703-264-8204/
 (SMX) CO: Systems Center Inc. ST: Virginia IN: CPR SU: ERN RCN


JL -- NYON1 -- 3300 07/27/92 05:09 EDT
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Date:Jul 27, 1992
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