XcelleNet Revenues Up 6% in 1Q

Atlanta-based XcelleNet Inc., the provider of systems management solutions for remote users that is being acquired by Sterling Commerce, said first quarter revenues increased 6% to $14.2 million, compared to $13.4 million in the first quarter of 1997.

Net income for the quarter was $1.3 million, or $0.14 on a diluted earnings
per share basis, compared to net income of $1.1 million, or $0.14 per share, a year ago.

According to XcelleNet’s chairman and CEO, Dennis M. Crumpler, “During
the second half of 1997, we successfully positioned our RemoteWare technology
at the intersection of two rapidly growing markets–systems management and
remote computing.”

“We are confident that RemoteWare can succeed in this emerging market opportunity. But our license revenue growth in the first quarter once again confirms our need to move more aggressively to expand our marketing and sales efforts to increase market visibility for our products.”

During the first quarter the company took a number of steps to support
expanded sales programs going forward. The direct sales force was increased by approximately 50 percent, reseller agreements were signed, and the company
announced a co-marketing agreement with Tivoli Systems Inc.

Under the terms of the acquisition agreement, a transaction valued at
approximately $200 million, shareholders of XcelleNet will receive $8.80 in
cash and 0.2885 of a share of Dallas-based Sterling Commerce common stock for
each share of XcelleNet common stock they own, subject to adjustment in
certain circumstances.

Based on recent closing prices of Sterling Commerce common stock, XcelleNet’s shareholders will receive cash and Sterling Commerce common stock worth approximately $22 per share of XcelleNet common stock.