STOCKREPORTS

Boole & Babbage, Inc.

NASDAQ Symbol BOOL In S&P SmallCap 600

Recent Price 23.38 52 Wk Range 26.75 - 15.83

Yield Nil 12-Mo. P/E 33.9

Quantitative Evaluation: Outlook (1 Lowest - 5 Highest) 5- Fair Value 34.70 Risk MEDIUM Earn/Div Rank B
Technical Evaluation: BEARISH since 12/96 Rel. Strength Rank (1 Lowest - 99 Highest) 43 Insider Activity Neutral

Business Profile 14-MAR-97

The company recorded a 32%, year-to-year gain in mainframe products revenues in the first quarter of FY 97 (Sep.), mainly reflecting strong growth in North America and non-European international areas, which had been weak in FY 96. However, BOOL does not expect mainframe growth to be as high in future quarters. Maintenance revenues rose 6.9% during the quarter, and management expects further growth in FY 97, due to the higher license revenue growth in FY 96. As a result of the January 1997 acquisition of MAXM Systems Corp. for about 1.1 million common shares, the company expected to take a one-time charge against its earnings in the quarter ending March 31, 1997. MAXM is a $20 million supplier of event management software for distributed systems.

Operation Review 14-MAR-97

Total revenue for the three months ended December 31, 1996, advanced 20%, year to year, with product licensing revenue up 31% and maintanance fees and other revenues rising 6.9%. Profitability improved considerably and with interest and other income (net) up 39%, pretax income rose 42%. After taxes at 30.1%, versus 29.9%, net income was up 41%, to $6,047,000 ($0.33 a share, based on 3.5% more shares) from $4,285,000 ($0.24, adjusted).

Stock Performance 18-JUL-97n

In the past 30 trading days, BOOL's shares have increased 7%, compared to a 7% rise in the S&P 500. Average trading volume for the past five days was 23,960 shares, compared with the 40-day moving average of 31,576 shares.

Key Stock Statistics

Fiscal Year Ending Sep. 30

Business Summary 14-MAR-97

Boole & Babbage's software products are used by information systems (IS) professionals in many large corporations worldwide which depend on the performance of their computing resources to conduct business. BOOL is a major developer and marketer of enterprise automation software products for managing distributed computer systems in multivendor, multiplatform computing environments. The company is committed to supporting open systems and the growing client/server market to both help IS organizations augment systems availability and lower costs.

Founded in 1967, BOOL currently offers over 40 products in North America, Europe, Asia, Japan, Australia and Latin America. In FY 96 (Sep.), revenues from international operations accounted for 37% of total revenues and 55% of operating profits. Fluctuations in currency exchange rates adversely affected revenue growth in recent years.

The company derives its revenues mainly from the licensing of computer software programs, consulting and education services (together accounting for about 54% of revenues in FY 96) and from the sales of software maintenance services (46%). Revenue from product licensing rose 12% in FY 96. With over 50% of BOOL's license revenue derived from transactions that close in the last month of a quarter (as is common in the industry), quarterly revenues are difficult to predict. Moreover, the inability to attain projected revenues could impact operating results since operating expenses are relatively fixed.

The product area with the highest revenue growth rate in FY 96 was the client/server group, which increased 66% (following an 83% gain the year before) and comprised 23% of total product licensing revenues. Management expects this group to continue to achieve high growth rates in FY 97. However, lower-than-expected sales of BOOL's Stage3 LAN backup product caused the company to record a $1 million charge in FY 96's third quarter.

Mainframe products sales advanced 2.3% in FY 96 and accounted for 77% of total product licensing that year. This product area includes plex products which enable customers to handle large groups of computer processors, especially the new parallel processing machines by IBM.

Maintenance fees and other revenues rose 4.1% in FY 96; maintenance revenue stems from services BOOL provides, including technical support, product enhancements, system updates and user documentation. The company expects further growth in maintenance revenues in FY 97, due to the higher license revenue growth in FY 96; however, it believes that it will be adversely affected by reduced revenue related to site consolidations and multiple-year maintenance package discounts.

Capitalization

Long Term Debt: $2,303,000 (12/96).

Curr. Ratio	1.6	1.4	1.2	NA	NA	NA	NA	NA	NA	NA
% LT Debt of Cap.	2.6	1.6	6.0	13.0	15.2	NA	NA	NA	NA	NA
% Net Inc.of Revs.	10.8	9.1	6.0	7.8	5.0	NA	NA	NA	NA	NA
% Ret. on Assets	9.8	9.4	6.8	8.1	7.0	NA	NA	NA	NA	NA
% Ret. on Equity	22.1	23.6	18.9	24.2	21.0	NA	NA	NA	NA	NA

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--3131 Zanker Road, San Jose, CA 95134-1933. Tel--(408) 526-3000. Fax--(408) 526-3055. Website--http://www.boole.com E-mail--aknapp@boole.com Chrmn--F. P. Johnson Jr. Pres & CEO--P. E. Newton. SVP-CFO & Secy--A. F. Knapp Jr. Dirs--J. S. Bruggeling, R. E. Cairns, F. P. Johnson Jr., T. R. McGowan, P. E. Newton, C. H. Reynolds. Transfer Agent & Registrar--First National Bank of Boston. Incorporated--in Delaware in 1986. Empl-- 0. S&P Analyst: J. J. Schemitsch

This report is for information purposes and should not be considered a solicitation to buy or sell any security. Neither S&P nor any other party guarantee its accuracy or make warranties regarding results from its usage. Redistribution is prohibited without written permission. Copyright © 1997