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THE LEARNING COMPANY REPORTS 41 PERCENT REVENUE GROWTH AND 85 PERCENT NET INCOME GROWTH FOR FISCAL YEAR 1993

    FREMONT, Calif., Aug. 5 /PRNewswire/ -- The Learning Company (NASDAQ: LRNG) today announced record financial results for the fiscal year 1993 and fourth fiscal quarter which ended on June 30, 1993. Revenues for fiscal year 1993 increased 40 percent to $27.5 million. This is the third consecutive fiscal year in which revenues have grown more than 30 percent over the prior year.  Net income increased 84 percent to $3.6 million, and net income per share increased 44 percent to 52 cents per share.
    Fourth quarter revenues increased 24 percent over the comparable quarter last year to $7.3 million versus $5.9 million in fiscal year '92.  Fourth quarter net income increased 93 percent to $1,303,000 or 17 cents per share versus $675,000 or 11 cents per share in fiscal year '92.
    "The Learning Company's product line has continued to benefit from a growing installed base of personal computers in homes and schools, the rapid introduction of educational software into the mass merchant retail channel, and strong brand awareness and acceptance in the retail and school markets," said Bill Dinsmore, president and chief executive officer.  "However, emergence of the educational category continues to bring with it industry-wide challenges that present both opportunities and risks to category participants," continued Dinsmore.  "Category growth continues to attract intense new competition, including entertainment and consumer software companies. The distribution channel is also evolving.  The number of retail outlets have been expanding and mass merchandisers are increasing their market share.  We are also entering a period of transition in hardware platforms and operating systems where, over time, we believe that floppy disk-based DOS and Mac platforms will lose market share and emerging platforms such as Windows floppy, and CD platforms, will gain market share."
    The Learning Company 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 important life-long learning and 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 currently sells 30 products comprised of 17 titles operating on one or more platforms, including IBM-compatible and Apple Macintosh personal computers.  These titles include:  Reader Rabbit's Ready for Letters (2-5 years), Reader Rabbit 1 (3-6 years), Reader Rabbit 2 (5-8 years), Math Rabbit (4-7 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), Ancient Empires (9-adult), Operation Neptune (10-adult), Time Riders in American History (10-adult), The Children's Wri Center (7-14 years), The Writing Center (7-adult), and The Bilingual Writing Center: Spanish/English (grades 2 and up).
    The Learning Company is located at 6493 Kaiser Dr., Fremont, CA 94555; phone: 800-852-2255 (customer service) or 510-792-2101 (main number).
                        THE LEARNING COMPANY
                        STATEMENTS OF INCOME
                (in thousands, except per share data)
                                 Three months ended     Year ended
    June 30:                       1993    1992       1993    1992
    Net revenues                $ 7,348  $ 5,931    $27,509  $19,592
    Cost of revenues              1,444    1,212      5,876    4,414
     Gross profit                 5,904    4,719     21,633   15,178
    Operating expenses
     Sales and marketing          1,565    1,669      7,693    5,401
     Research and development     1,571    1,276      5,654    4,708
     General and administrative     868      668      3,062    2,046
      Total operating expenses    4,004    3,613     16,409   12,155
      Income from operations      1,900    1,106      5,224    3,023
    Other income                    311       38        762      196
    Income before provision
     for income taxes             2,211    1,144      5,986    3,219
    Provision for income taxes      908      469      2,399    1,270
     Net income                 $ 1,303  $   675    $ 3,587  $ 1,949
    Net income per share        $  0.17  $  0.11    $  0.52  $  0.36
    Shares used in per share
     calculation                  7,731    5,995      6,931    5,353
    -0-             08/05/93
    CONTACT:  Les Schmidt, chief financial officer of The Learning Company, 510-792-2101
    (LRNG) CO:  THE LEARNING COMPANY IN:  CPR SU:  ERN ST:  CA


-- SJ003 -- X371 08/05/93
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Date:Aug 5, 1993
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