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THE CONTINUUM COMPANY, INC. ANNOUNCES SECOND QUARTER RESULTS

 THE CONTINUUM COMPANY, INC. ANNOUNCES SECOND QUARTER RESULTS
 AUSTIN, Texas, Oct. 22 /PRNewswire/ -- The Continuum Company, Inc. (NYSE: CNU) announced improved earnings for the quarter ended Sept. 30, 1992 compared to the same quarter last year. Net income increased 69 percent to $1,602,000 and earnings per share increased from $.09 to $.15. License revenue increased from $1,202,000 to $2,881,000, more than offsetting increased marketing and administrative expenses.
 W. Michael Long, chief executive officer of Continuum, commented, "We are pleased that our earnings for the first half of this year are 58 percent better than last year. The global insurance industry is continuing to invest in our products and services in spite of the worldwide economic slowdown. Another COGEN(TM) license sale in Europe, strong component sales in North America and a $10 million outsourcing contract extension is encouraging given our increased marketing investments to support our broader product offering, diverse geographical markets and outsourcing thrust. Recent new marketing agreements with IBM in the United States and Japan should aid future product sales in Japan and outsourcing sales in North America. CCA2(TM) service revenues from our Asahi and Groupama projects in Japan and France offset declines in other service revenues as our customers transition from CCA to CCA2 and ES/C(TM) products."
 Supplemental Information
 Service Revenue Profitability
 Quarter ended (000 omitted):
 Sept 30 June 30 Sept 30
 1992 1992 1991
 Service revenue $28,006 $26,004 $28,237
 Service expenses 21,284 20,125 21,705
 Service gross profit $ 6,722 $ 5,879 $ 6,532
 Service gross profit 24 pct. 23 pct. 23 pct.
 Compared to a year earlier, service revenue decreased $231,000 or 1 percent and service expenses decreased $421,000 or 2 percent, resulting in a service gross profit increase of $190,000.
 Compared to the first quarter of fiscal 1993, service revenue increased $2,002,000 or 8 percent. Service expenses increased $1,159,000 or 6 percent, resulting in a service gross profit increase of $843,000 or 14 percent.
 Customer Geography
 U.S. customers accounted for 33 percent of second quarter service revenue and European customers accounted for 44 percent. U.S. customers accounted for 31 percent of total revenues and European customers accounted for 47 percent. Australian and Japanese customers accounted for the remainder.
 Service Revenue by Product
 Approximately 63 percent of second quarter revenue was related to Continuum's life insurance products, CCA2, LIFE-COMM(R), LIFE/70(R) and CLOAS(TM). The remaining 37 percent of revenue was primarily related to COGEN and COLOSSUS(TM), systems for property and casualty insurance companies.
 Advanced Development Program Revenue
 ADP revenue for the second quarter of fiscal 1993 was approximately $1,200,000 less than the same quarter last year and approximately $800,000 less than the first quarter of fiscal 1993. Delivery of the CCA2 products resulting from the ADP has begun and will continue throughout the remainder of the fiscal year.
 Marketing and Administrative Expenses
 Marketing and administrative expenses for the second fiscal quarter were $7,578,000 or 24 percent of total revenue, compared to a year ago when they were $6,468,000 or 22 percent of revenue. Continuum has increased investments and emphasis on its U.S. marketing activities for product sales and outsourcing and has continued to invest heavily in growth strategies to increase its presence in Europe and the Pacific Rim and in the property and casualty insurance industry.
 Personnel
 Continuum employment worldwide was 1,045, a decrease of 5 during the second fiscal quarter.
 Cash
 Cash and short term investments totaled $41,134,000, an increase of $8.7 million during the second quarter and an increase of $17.2 million during the last 12 months.
 The Continuum Company, Inc. is an international consulting and computer services firm based in Austin, Texas, serving the needs of life insurance, property and casualty insurance and other financial services companies for computer software and services.
 THE CONTINUUM COMPANY, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (unaudited)
 Three Months Ended Six Months Ended
 September 30 September 30
 1992 1991 1992 1991
 REVENUE:
 Software systems
 licensing $ 2,881,000 $ 1,202,000 $ 6,424,000 $ 2,288,000
 Service revenues 28,006,000 28,237,000 54,010,000 56,154,000
 Interest income 229,000 342,000 528,000 774,000
 Total 31,116,000 29,781,000 60,962,000 59,216,000
 EXPENSES:
 Service expenses 21,284,000 21,705,000 41,409,000 43,112,000
 Marketing and
 administration 7,578,000 6,468,000 14,598,000 12,680,000
 Total 28,862,000 28,173,000 56,007,000 55,792,000
 Income before
 provision for
 income taxes 2,254,000 1,608,000 4,955,000 3,424,000
 Provision for income
 taxes 652,000 659,000 1,762,000 1,404,000
 Net income $1,602,000 $ 949,000 $ 3,193,000 2,020,000
 Earnings per common
 share $ 0.15 $ 0.09 $ 0.30 $ 0.19
 Average common shares
 outstanding 10,813,000 10,717,000 10,796,000 10,701,000
 -0- 10/22/92
 /CONTACT: John L. Westermann III, of The Continuum Company, 512-345-5700/
 (CNU) CO: Continuum Company, Inc. ST: Texas IN: CPR SU: ERN


LR -- NY020 -- 3320 10/22/92 08:55 EDT
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