Wind River Reports Second Quarter Net Income of $0.14 Per Share on Revenues of $22 Million; Quarterly Revenues Up 47%, Net Income up 85%

Business Wire, August 20, 1997

ALAMEDA, Calif.--(BUSINESS WIRE)--Aug. 20, 1997--Wind River Systems, Inc. (NASDAQ:WIND) the leading provider of real-time operating systems, integrated software development tools and engineering services for embedded applications, reported operating results for the second quarter ended July 31, 1997.

Revenues for the second quarter were $22,000,000, an increase of 47% from the $15,000,000 reported in the second quarter of the previous year. Net income for the quarter was $3,870,000 compared to net income of $2,090,000 for the corresponding quarter of the previous year, an increase of 85%. Earnings per share grew from $0.08 in the second quarter of last year to $0.14 this year, an increase of 75%. Weighted average shares outstanding, used in the computation of earnings per share for the current quarter and the corresponding quarter of the previous year, were 28,373,000 and 24,728,000, respectively.

Total revenues for the first half of fiscal 1998 of $40,400,000 represents a 46% increase from revenues of $27,600,000 in the first half of fiscal 1997. Net income for the first half of this fiscal year was $6,820,000 compared to $3,560,000 for the same period last year, an increase of 92%.

"This has been a very exciting and productive quarter for Wind River," said Ron Abelmann, president and CEO of Wind River Systems. "Our order growth has been outstanding and the second release of our Tornado tool suite has been extremely well accepted, bringing our current Tornado(tm) user base to over 13,000. Furthermore, we have again met our key revenue and profitability objectives," continued Abelmann.

Significant events during the quarter

The second quarter featured design wins across a variety of industries. In June, Wind River announced a corporate-wide strategic technology agreement with Adobe Systems, Inc. (NASDAQ:ADBE) whereby Tornado will become the standard platform for all Adobe PostScript-based printers and other embedded systems.

In early July, millions worldwide celebrated the success of NASA's Mars Pathfinder mission, which is controlled by Wind River's VxWorks(r) real-time operating system. NASA's Johnson Space Center further endorsed the reliability of Wind River technology in mission- critical applications by choosing Tornado as the development environment for the x38 program -- essentially a lifeboat for the emerging space station.

During the quarter Wind River announced its fully integrated Embedded Internet(tm) product suite, bringing the advantages of the Internet to embedded computers such as smart phones, network computers, network printers, cable modems and switches. With the addition of the Tornado for Embedded Internet suite, Wind River becomes the first vendor to provide a common technology to build and deploy products throughout the Internet, including its infrastructure, servers and smart appliances. The Company also announced a scalable enhanced TCP/IP network stack to help developers build next-generation datacom and telecom products more quickly.

Shortly after quarter-end, Digital Equipment and Wind River jointly announced that Wind River will support Digital's StrongARM processor for the I2O initiative. Further endorsement of Wind River products came from the United States Postal Service who will be using Wind River technology as an integral part of their new Small Facility OCR Mail Sort System. InterWAVE Communications, a developer of microcellular systems for wireless communications, chose Wind River's industry-leading network performance as the basis for their Global System for Mobile Communications (GSM) system products. In Asia, Korean Airlines chose Wind River technology as a basis for a major subway simulation application.

Wind River Systems, Inc.

Wind River Systems, Inc. is the leading provider of real-time operating systems, integrated software development tools, and engineering services for embedded applications in the Internet, telecommunications and datacommunications, office automation, networking, computer peripherals, medical, automotive, industrial, aerospace, and multimedia markets. Through the industry's most comprehensive product line and customer support, Wind River enables customers to enjoy rapid time to market and standardize their designs across products. Incorporated in 1983, Wind River is headquartered in Alameda, California, with operations in Canada, the United Kingdom, France, Germany, Sweden, Italy, Israel, Japan and Korea, and representation worldwide.

Except for the historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties, including but not limited to timely development, acceptance and pricing of new products, the impact of competitive products and pricing, and other risks detailed in the Company's most recent Annual Report on Form 10-K filed with the SEC. -0-

Tornado and Embedded Internet are trademarks and VxWorks, Wind River Systems, and the Wind River Systems logo are registered trademarks of Wind River Systems, Inc. Tornado patent pending. All other names mentioned are trademarks, registered trademarks, or service marks of their respective companies. -0-