Timberline Software Reports Record Third QuarterResults.

BEAVERTON, Ore.--(BUSINESS WIRE)--Oct. 13, 1999--

Timberline Software Corporation (Nasdaq:TMBS), a leading developer of computer software for the construction and property management industries, today reported the highest third quarter and year-to-date operating results in the Company's

Revenue for the quarter ended Sept. 30, 1999 was $13,350,000, an increase of 21% over $11,078,000 for the same quarter a year ago. Net income for the quarter rose 43% to $2,465,000 or $.25 per diluted share compared to net income of $1,726,000 or $.18 per diluted share for the third quarter of 1998.

For the nine months ended Sept. 30, 1999, the Company's net income rose 54% to $6,950,000 or $.71 per diluted share on revenue of $40.0 million compared to net income of $4,508,000 or $.46 per diluted share on revenue of $30.9 million for the like period a year ago.

"While software sales increased modestly over the third quarter last year, strong growth in service fee revenue, primarily fees from support plans, was the primary factor that resulted in us achieving record third quarter revenue and earnings," said Curtis Peltz, President.

Service fees from support, consulting and training, which account for 46% of total revenue, continued their strong growth, rising 39% to $6,204,000 in 1999 from $4,464,000 for the same quarter a year ago. Software sales grew 6% to $6,749,000 in the third quarter of 1999 from $6,360,000 in 1998.

Operating expenses for the quarter increased 12% to $8,374,000 in 1999 from $7,483,000 in 1998. The rise was primarily due to increased personnel costs in the product development and customer support areas.

Founded in 1971, Timberline Software Corporation is a leading supplier of project accounting and cost estimating software for the construction and property management industries.

TIMBERLINE SOFTWARE CORPORATION STATEMENTS OF OPERATIONS (Unaudited - Amounts in thousands, except per share data) -0-

                              Nine Months Ended    Quarter Ended
                                   Sept. 30,          Sept. 30,
                                1999      1998     1999     1998
                             --------  --------  -------  -------
Net revenue:
  Computer software          $ 21,447  $ 17,038  $ 6,749  $ 6,360
  Service fees                 17,490    13,076    6,204    4,464
  Other                         1,025       807      397      254
                             --------  --------  -------  -------
  Net revenue                  39,962    30,921   13,350   11,078
                             --------  --------  -------  -------
Cost and expenses:
  Cost of revenue               3,583     2,802    1,144      964
  Customer support              7,532     6,195    2,573    2,177
  Product development           7,681     6,600    2,671    2,366
  Sales and marketing           6,282     4,923    1,857    1,755
  General and administrative    3,932     3,679    1,273    1,185
                             --------  --------  -------  -------
  Total cost and expenses      29,010    24,199    9,518    8,447
                             --------  --------  -------  -------
Operating income               10,952     6,722    3,832    2,631

Other income                      443       436      210      109
                             --------  --------  -------  -------

Income before income taxes     11,395     7,158    4,042    2,740

Provision for income taxes      4,445     2,650    1,577    1,014
                             --------  --------  -------  -------
Net income                   $  6,950  $  4,508  $ 2,465  $ 1,726
                             ========  ========  =======  =======
Earnings per share:
  Basic                      $   0.73  $   0.48  $  0.26  $  0.18
  Diluted                        0.71      0.46     0.25     0.18
                             ========  ========  =======  =======

Weighted-average common shares
 outstanding, used in
 computing earnings
 per share:
  Basic                         9,493     9,367    9,552    9,399
  Diluted                       9,842     9,706    9,885    9,736



TIMBERLINE SOFTWARE CORPORATION
CONDENSED BALANCE SHEETS
(Amounts in thousands)
                                               (Unaudited)
                                                 Sept. 30,     Dec 31,
                                                   1999         1998
Assets
Current assets:
  Cash and temporary investments                $ 17,116     $ 13,960
  Accounts receivable                              5,227        5,086
  Other current assets                             1,529        1,474
                                                --------     --------
  Total current assets                            23,872       20,520

Property and equipment                            18,260       18,381
Capitalized software costs                         2,235        1,304
Purchased software                                 2,012        1,249
Other assets                                          82           95
                                                --------     --------
Total assets                                    $ 46,461     $ 41,549
                                                ========     ========
Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                              $  1,054     $    812
  Deferred revenues                               13,069       10,352
  Other current liabilities                        4,072        3,856
                                                --------     --------
  Total current liabilities                       18,195       15,020

Long-term debt                                         -        5,417
Deferred credits                                   1,066        1,076

Shareholders' equity:
  Common stock                                       384          377
  Additional paid in capital                       5,110        3,721
  Accumulated other comprehensive income             (33)          10
  Retained earnings                               21,739       15,928
                                                --------     --------
  Total shareholders' equity                      27,200       20,036
                                                --------     --------
Total liabilities and shareholders' equity      $ 46,461     $ 41,549
                                                ========     ========