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To: CJ Owen Critchley who wrote (5398)	2/19/1998 8:24:00 PM
From: Daniel Schumacher	Read Replies (1) \| Respond to of 120523

TouchStone Software Reports Improved Fourth Quarter Financial and Year-End Results HUNTINGTON BEACH, Calif.--(BUSINESS WIRE)--Feb. 19, 1998-- TouchStone Software Corp. (Nasdaq: TSSW - ne Thursday reported a profit of $23,000, a break-even per share on 7.9 million shares outstanding, for the fourth quarter ended Dec. 31, 1997. This compares with a loss of $228,000, or $0.03 per share on 7.7 million shares outstanding, in the same period last year. The company also reported total revenues of $1,671,000, compared with total revenues of $2,768,000 for the same period a year ago. Revenues for the year ended Dec. 31, 1997 were $7,915,000, compared with $7,667,000 for the same period a year ago. The loss for the 12-month period was $2,057,000, or $0.26 per share on 7.8 million shares outstanding. In the same period of 1996, the company reported a loss of $4,529,000, or $0.60 per share on 7.6 million shares outstanding. Larry Jordan, president and chief executive officer of TouchStone Software, said: ''Decreased sales of PC-cillin Anti-Virus caused by the continued competition in the anti-virus software category, especially in the retail channel, account for the reduced revenue. Due to changing product and channel mixes, we've improved our gross profit margin to 73% for the fourth quarter compared with 60% for the same period a year ago by reducing the royalties paid to other developers and a reduced cost of goods in the current product lines. The internal restructuring that began in the third quarter resulted in a $700,000 reduction in expenses in the fourth quarter, a decrease of 35% compared to the same period last year. We have also made a commitment to explore new sales channels.'' TouchStone recently partnered with TAMCO, a leading independent manufacturer's rep firm, in an effort to augment its coverage of VAR, system integrator and distributor channels. Additionally, the company will soon launch versions of CheckIt v.5.0 in German and Italian to the international market in an ongoing effort to gain market share worldwide. ''Substantial growth in TouchStone's expanding sales channels is our goal in the next year,'' Jordan said. ''By building our management team with new hires in channel and international sales, we plan to capitalize on the expanding markets for diagnostic software products.'' ''In addition to reporting our return to profitability, we've heightened our focus in research and development of key diagnostic technologies,'' Jordan continued. ''The feedback from our customers on the newest CheckIt products currently in distribution is very encouraging.''