Unify Corporation Reports Record Fourth Quarter Results With Increased Revenue and Momentum From Unify eWave Commerce Solutions - Company Financial Information

Edge: Work-Group Computing Report, May 29, 2000

Unify Corporation (Nasdaq: UNFY), a leading provider of e-commerce software, Tuesday announced results for the fiscal 2000 fourth quarter ended April 30, 2000.

Total revenues for the fourth quarter of fiscal 2000 were $11.5 million as compared to $8.9 million for the fourth quarter of the prior year, representing an increase of 30%. Revenue from internet product license fees was $6.2 million, reflecting a 63% increase from the fourth quarter of last year. Total revenues from license fees were $8.2 million versus $6.0 million in the same period last year, an increase of 36%. License revenues represent 71% of total revenues in the current period, as compared to 68% for the fourth quarter of fiscal 1999.

Excluding a tax benefit of $5.1 million related to the reversal of a valuation allowance against its deferred tax assets, fourth quarter fiscal 2000 net income was $3.6 million versus $1.9 million in the same quarter last year. Excluding such tax benefit, earnings per share equates to $.19 per basic share for the fourth quarter, $0.18 per share on a diluted basis as compared to $0.11 per basic share and $0.10 per diluted share in the same quarter last year, representing a 180% increase year over year.

Inclusive of the tax benefit, fourth quarter fiscal 2000 net income was $8.6 million or $0.46 per basic share, as compared to net income of $1.9 million or $0.11 per basic share for the fourth quarter of last year. Net income was $0.43 per diluted share in the current quarter versus $0.10 per diluted share in the same quarter last year.

Revenue for the twelve months ended April 30, 2000 totaled $39.5 million, as compared to $30.8 million in the twelve months ended April 30, 1999. Excluding the effect of the tax benefit, net income was $10.2 million, or $0.56 per basic share for the twelve months ended April 30, 2000, as compared to net income of $4.4 million, or $0.26 per basic share for the same period last year, an increase of 232%. Net income on a diluted share basis was $0.53 for the twelve months ended April 30, 2000 versus $0.24 for the same period a year earlier.

Inclusive of the tax benefit, net income was $15.3 million, or $0.84 per basic share for the twelve months ended April 30, 2000, as compared to net income of $4.4 million, or $0.26 per basic share for the same period last year. Net income on a diluted share basis was $0.79 for the twelve months ended April 30, 2000 versus $0.24 for the same period a year earlier.

"Companies continue to seek out open e-commerce solutions like Unify eWave, resulting in our strongest fourth quarter ever," stated Reza Mikailli, president and chief executive officer. "The acquisition of New Atlanta and their award winning ServletExec product combined with the Unify eWave product line offer the industry's most complete portfolio of open, standards-based solutions for Application Service Providers (ASPs) and companies building B2B, B2C trading hubs and exchanges."

Sales of product for the fourth quarter include the following organizations: Agilent Technologies, Arsin Corporation, ANFA, Black Hog Corporation, Bi-Flow, Budweiser (Japan), CBill, CNA, Department of Defense, DigiTrade, Fujisaki, Hitachi, Miroku, NEC, Net Team, Plurify Software, Smarticom, Sumitomo Metals, TMG Systemhaus GmbH, Unique Computing Solutions, US Marshals, Wilnet, and Yube, Inc.

Unify Corporation (Nasdaq: UNFY) is a global provider of Internet and e-commerce software solutions for building enterprise-class business-to-business and business-to-consumer e-commerce sites quickly and cost effectively. Based in San Jose, Calif., Unify offers a full range of products and services to guide today's highly competitive companies into the complex world of conducting business online. Additional information on Unify is available at www.unify.com.

                       UNIFY CORPORATION
        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (in thousands, except per share data)
                          (unaudited)

                            Three Months          Twelve Months
                            Ended April 30,      Ended April 30,
                            2000        1999     2000        1999
                            -----------------   -----------------
Revenues:
 Software licenses
  -Internet                $6,188      $3,808   $19,216    $11,816
 Software licenses
  -ClientServer             2,012       2,201     8,503      8,504
 Services                   3,301       2,864    11,807     10,490
                            -----       -----    ------     ------
Total revenues             11,501       8,873    39,526     30,810

Cost of revenues:
 Software licenses            218         215       918        849
 Services                   1,394       1,189     4,943      4,404
                            -----       -----    ------     ------
Total cost of revenues      1,612       1,404     5,861      5,253

Gross margin                9,889       7,469    33,665     25,557

Operating expenses:
 Product development        1,726       1,538     6,445      5,928
 Selling, general and
  administrative            4,583       3,959    17,014     15,151
                            -----       -----    ------     ------
Total operating expenses    6,309       5,497    23,459     21,079
                            -----       -----    ------     ------
Income from operations      3,580      1,972     10,206      4,478

Other income (expense), net    36         (1)       397        175
                            -----       -----    ------     ------
Income before income taxes  3,616      1,971     10,603      4,653
Provision (benefit) for
 income taxes              (5,014)         71     (4,660)      231
                            -----       -----    ------     ------
   Net earnings            $8,630      $1,900    $15,263    $4,422
                           ======      ======    =======    ======
Net income per share:
 Basic                     $0.46       $0.11     $0.84      $0.26
                          ======      ======    ======      ======
 Diluted                   $0.43       $0.10     $0.79      $0.24
                          ======      ======    ======      ======
Shares used in computing
 net income per share:
  Basic                  18,837       17,350    18,168      17,110
                         ======       ======    ======      ======
  Diluted                20,160       19,166    19,303      18,102
                         ======       ======    ======      ======

                       UNIFY CORPORATION
             CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands)
                          (unaudited)

                                              April 30,  April 30,
                                                 2000       1999
                                              --------------------
ASSETS
Current assets
Cash and equivalents and short-term investments  $13,601   $11,387
Accounts receivable, net                          11,114     9,156
Prepaid expenses and other current assets          1,285       732
Deferred tax assets                                4,000         0
                                                 -------   -------
Total current assets                              30,000    21,275

Property and equipment, net                        1,036     1,417
Other assets, net                                 24,221       242
Deferred tax assets                                2,800         0
                                                 -------   -------

Total assets                                     $58,057   $22,934
                                                 =======   =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                   1,253     1,138
Accrued compensation and related expenses          1,641     1,650
Other accrued liabilities                          2,701     2,621
Deferred revenue                                   2,945     3,326
Amounts due to minority interest stockholders        471       608
                                                 -------   -------
Total current liabilities                          9,011     9,343

Minority interest                                    331       265

Stockholders' equity                              48,715    13,326
                                                 -------   -------
Total liabilities and stockholders' equity       $58,057   $22,934
                                                 =======   =======