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July 16, 1998

SYBASE ENDS TWO-YEAR SLUMP WITH SIGNS OF RECOVERY

By CBR Staff Writer

Sybase Inc celebrated what it styled a return to growth and profitability yesterday, a quarter or so earlier than it had expected. Analysts had also been predicting a loss of 9 cents per share. Instead, the Emeryville, California-based database software house made a tiny profit of $450,000, or 1 cent per share, on revenues up just 1.1% on the previous year and 5.3% sequentially to $217.8m. The second half came one quarter early, said president and chief executive officer John Chen. Small as it was, the profit was welcome after the $17.8m, 23 cents a share loss Sybase reported in the comparable quarter last year, and the $81.9m loss it reported in the first quarter of this year. The company hasn’t seen significant levels of growth since 1996. Sybase attributed the positive signs to its cost reduction program, but also to some revenue growth in its core Adaptive Server business, and growing mobile databases and middleware sales. Licensing revenues as a whole fell from $110.6m a year ago to $105.9m during the quarter, while services accounted for $112m, up from $104.9m last year. Development tools showed the weakest performance, partly as a result of the industry wide weakness in that area, Chen said. Sybase plans to introduce new products in its Powersoft range of tools at the Powersoft Conference in Los Angeles during the second week in August. Chen said the company’s focus on newer business areas such as integrated data warehousing suites and database independent vertical market application servers, such as the Financial Server it launched last month, would help fuel its continuing growth. He said the deal with applications software house Intuit signed earlier this week (CI No 3,453) was the first of many such deals. Too late to affect the quarter, Sybase began shipping its Adaptive Server Enterprise edition with row level locking, and is currently in the process of certifying the database for use with applications from Peoplesoft Inc, Siebel Systems Inc, Documentum Corp, Lawson Software Inc and Baan NV. Sybase ended the quarter with $211.5m in cash and investments.

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