Enlighten Software Reports Third Quarter Results — Enters Strategic Linux Licensing Agreement, Launches EnlightenDSM Version 3.4 Supporting Red Hat's Linux

Business Wire, Oct 29, 1999

SAN MATEO, Calif.--(BUSINESS WIRE)--Oct. 29, 1999--

Enlighten Software Solutions, Inc. (NASDAQ:SFTW), a leading provider of event monitoring and workgroup administration for open systems, today reported operating results for the fiscal 1999 third quarter ended September 30, 1999 and indicated that delays in product and marketing plans by key partners are impacting its operating performance into next year. Separately, Enlighten announced a significant strategic Linux licensing and development agreement with a leading systems management software provider as well as the launch of EnlightenDSM version 3.4 which will support Red Hat Linux.

David D. Parker, President and CEO, commented, "Despite significant progress being achieved in expanding our third party distribution relationships as well as ongoing enhancements and new platform coverage built into our core EnlightenDSM product, our operating performance is trailing expectations. This is principally due to delays in several key distribution relationships that were slated to commence deployment and marketing of products bundled or integrated with EnlightenDSM. For example, the launch of IBM Suites for Solaris and AIX and the product's supporting sales and marketing programs have been delayed by two to three quarters, in line with IBM's recent announcements.

Separately, Sun SyMON has been repackaged as Sun Management Center and the design specifications for Enlighten's complementary product have changed, causing an unexpected delay. That's the bad news.

"The good news is that we believe a substantial and growing market opportunity exists for our Company, and we've continued to invest in substantial enhancements and expanded platform coverage for EnlightenDSM. These investments are the source of much of our expanded market opportunity and are serving to stimulate increasing interest in our product offerings. We have also materially expanded our distribution relationships, including the execution of a Linux licensing agreement announced today as well as our third quarter bundling relationship with TurboLinux. These are fundamental enhancements to our business that we believe will begin to make material contributions to revenues and earnings going forward. Further, we feel confident that our ongoing product enhancements and expanded platform coverage have inherent value that will be recognized over time."

Revenue for the third quarter of 1999 was $720,000 compared to revenues of $1,507,000 in the third quarter of 1998. Enlighten reported a net loss of $468,000, or $0.12 per basic share, in the 1999 third quarter, compared to net income of $70,000, or $0.02 per basic and diluted share, in the third quarter of 1998. The weighted average numbers of shares outstanding for the third quarters of 1999 and 1998 were 4,047,000 (basic) and 4,124,000 (diluted), respectively.

For the first nine months of 1999, revenue was $2,497,000 compared to $2,627,000 in the same period a year ago. For the first nine months of 1999, Enlighten reported a net loss of $1,399,000, or $0.35 per basic share, compared to a net loss of $433,000, or $0.13 per basic share, in the same period last year. The weighted average number of basic shares outstanding for the first nine months of 1999 was 3,981,000 compared to 3,384,000 in the same period last year.

About Enlighten

Enlighten Software Solutions, Inc. is a provider of Unix, Linux, NT and Windows environment workgroup administration and event monitoring solutions for open systems distributed computing environments. The Company's award winning EnlightenDSM product suite provides cost-effective systems administration solutions for mixed vendor environments including Digital Unix, Hewlett-Packard, IBM, SCO, Silicon Graphics, Sun Microsystems, Linux, Windows NT and Windows 95 and 98. The EnlightenDSM product suite provides comprehensive functionality with unprecedented ease of installation and use. The EnlightenDSM product suite conforms with industry standard frameworks yet allows seamless integration with other vendors' point solutions. For more information, please visit the Company's web site located at http://www.enlightenDSM.com

The statements contained in this press release, other than historical information, include forward-looking statements and are based on current expectations and involve risks and uncertainties. Consequently, the Company's actual results could differ materially from expectations expressed herein. The various factors that could cause the Company's actual results to differ include, but are not limited to, failure of the Company's products to gain customer acceptance, quarterly fluctuations in results, the management of growth, the ability to fund operations, the impact of competitive products and pricing, the rapid pace with which technology changes, and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Actual results may differ materially from management expectations.