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THE LEARNING CO. REPORTS STRONG SECOND QUARTER RESULTS

 FREMONT, Calif., Jan. 14 /PRNewswire/ -- The Learning Co. (NASDAQ: LRNG) today announced financial results for the second fiscal quarter which ended on Dec. 31, 1992. Compared to the same quarter last year, revenues for the second quarter increased 46 percent to $7.9 million from $5.4 million. Net income increased 72 percent to $1,114,000 from $647,000. Average common and common equivalent shares outstanding at Dec. 31, 1992 increased to 6,561,000 shares from 5,196,000 at Dec. 30, 1991, primarily due to the issuance of 1,000,000 shares in the company's April 28, 1992 initial public offering. Earnings per share were 17 cents in 1992 on the larger share base compared to 13 cents in 1991.
 Revenues for the six months ended Dec. 31, 1992 increased 43 percent to $14.1 million. Net income increased 55 percent to $1.9 million and net income per share increased 22 percent to 28 cents per share.
 "Our growing product line performed well and we believe that the market for educational software will continue to grow and present The Learning Co. with opportunities," said Bill Dinsmore, president and chief executive officer. "Nonetheless, there are significant challenges ahead for the industry as it responds to growing competition, evolution of the distribution channel, and technological change."
 The Learning Co. is a leading developer of quality educational personal computer software for children and young adults for use at home and at school. The company's strategy is to use the benefits of emerging technologies to provide highly engaging, easy-to-use software products that help build core learning skills, develop knowledge and facilitate effective written communication skills. The subject areas and learning objectives for the company's products are developed with input from outside educational professionals, parents, children and young adults to ensure that each new product is of the highest quality and matches an identified market opportunity.
 The company's products are designed to address the core educational needs, such as reading, math, writing, and problem-solving, common to all children and young adults. The company currently sells 31 products comprised of 18 titles operating on one or more platforms, including IBM-compatible and Apple Macintosh personal computers. These titles include: "Reader Rabbit's Ready for Letters" (3-5 years), "Reader Rabbit 1" (3-6 years), "Reader Rabbit 2" (5-8 years), "Math Rabbit" (3-7 years), "MetroGnomes Music" (4-7 years), "Treasure Mountain!" (5-9 years), "Treasure Cove!" (5-9 years), "Treasure MathStorm!" (5-9 years), "Super Solvers OutNumbered!" (7-10 years), "Super Solvers Midnight Rescue!" (7-10 years), "Super Solvers Spellbound" (7-12 years), "Writer Rabbit" (7-10 years), "Think Quick!" (7 and up), "Ancient Empires" (9-Adult), "Operation Neptune" (10-Adult), "Time Riders in American History" (10-Adult), "The Children's Writing & Publishing Center" (7-14 years) and "The Writing Center" (7-Adult).
 The Learning Co. is located at 6493 Kaiser Dr., Fremont, CA 94555; phone: 800-852-2255 (customer service), or 510-792-2101 (main number).
 THE LEARNING CO.
 Statements of Income
 (In thousands, except per share data)
 Three months Six months
 Ended Dec. 31: 1992 1991 1992 1991
 (unaudited) (unaudited) (unaudited)
 Net revenues $ 7,930 $ 5,442 $14,086 $ 9,825
 Cost of revenues 1,884 1,427 3,131 2,431
 Gross profit 6,046 4,015 10,955 7,394
 Operating expenses
 Sales and
 marketing 2,250 1,439 4,076 2,471
 Research and
 development 1,301 998 2,676 2,084
 General and
 administrative 786 596 1,437 999
 Total operating
 expenses 4,337 3,033 8,189 5,554
 Income from
 operations 1,709 982 2,766 1,840
 Other income 104 73 251 110
 Income before
 provision for
 income taxes 1,813 1,055 3,017 1,950
 Provision for
 income taxes 699 408 1,162 753
 Net income $ 1,114 $ 647 $ 1,855 $ 1,197
 Net income per
 share $ 0.17 $ 0.13 $ 0.28 $ 0.23
 Shares used in
 per share
 calculation 6,561 5,196 6,523 5,195
 Balance Sheets
 (In thousands, except share data)
 Dec. 31, June 30,
 1992 1992
 (Unaudited)
 ASSETS:
 Current assets
 Cash and cash equivalents $ 4,201 $ 8,490
 Short-term investments 9,935 5,490
 Accounts receivable, less
 allowance for doubtful
 accounts and returns of
 $1,876,800 at Dec. 31, 1992
 and $564,000 at June 30, 1992 6,030 3,776
 Inventories 910 439
 Prepaid taxes and other
 current assets 843 546
 Deferred income taxes 100 100
 Total current assets 22,019 18,841
 Property and equipment at
 cost, net 1,557 1,542
 Other assets 371 271
 Total assets $ 23,947 $ 20,654
 Liabilities and Shareholders' Equity
 Current liabilities
 Accounts payable $ 970 $ 1,339
 Accrued payroll and related 231 311
 Accrued liabilities 815 400
 Total current liabilities 2,016 2,050
 Shareholders' equity:
 Preferred stock, 1,000,000
 shares authorized --- ---
 Common stock, no par value,
 20,000,000 shares authorized
 Issued and outstanding: 5,839,913 shares
 at Dec. 31, 1992, and 5,600,416 shares
 at June 30, 1992 15,141 13,668
 Retained earnings 6,790 4,936
 Total shareholders' equity 21,931 18,604
 Total liabilities and
 shareholders' equity $ 23,947 $ 20,654
 -0- 1/14/93
 /CONTACT: Les Schmidt, chief financial officer, 510-792-2101, or Sharyn Fitzpatrick, 510-713-6011, both of The Learning Co./
 (LRNG)


CO: The Learning Co. ST: California IN: CPR SU: ERN

GT-SG -- SJ003 -- 5114 01/14/93 18:04 EST
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Date:Jan 14, 1993
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