Wednesday, February 3, 1999

Ontrack announces fourth quarter and 1998 financial results

ONTRACK Data International, Inc. (Nasdaq: ONDI) today announced its financial results for the fourth quarter and year ended December 31, 1998.
Total revenues for the fourth quarter were $8,797,000 compared to revenues of $10,042,000 in the fourth quarter of 1997. Net income was $845,000 compared to $1,706,000 in the same period a year ago. Diluted net income per share was $.09 compared to $.17 in the fourth quarter of 1997.
For the year ended December 31, 1998, total revenues were $35,841,000 compared to revenues of $35,249,000 in 1997. Net income for 1998 was $5,198,000 compared to $5,656,000 in 1997. Diluted net income per share was $.52 in 1998 compared to $.56 in 1997.
Fourth quarter 1998 service revenues totaled $7,164,000, which were in line with the Company's estimate announced in January. Fourth quarter 1998 software revenues of $1,633,000 were also in line with expectations, declining 40% compared to 1997's fourth quarter. Software revenues consist primarily of sales into the OEM channel of ONTRACK Disk Manager software, the company's hard disk drive installation utility software program. As previously announced, software revenues have declined and are expected to continue to decline principally as a result of ongoing competitive pricing pressure.
“ As the global leader in data recovery solutions, we are constantly looking at opportunities to expand our product offerings,” said Mike Rogers, CEO of Ontrack. “Our goal is to provide data recovery solutions for the entire spectrum of computer system users---from simple do-it-yourself recoveries for the small office/home office user to complex recoveries for network administrators responsible for terabytes of mission-critical data. We expect to reach this objective through a mix of product diversification, expanded distribution channels and the delivery of remote data recovery capabilities on network servers.”
ONTRACK (NASDAQ: ONDI), the world leader in data recovery, specializes in services and software that help computer users access and recover their valuable data. Using hundreds of proprietary tools and techniques, ONTRACK is able to recover lost or corrupted data from all operating systems and types of storage devices. ONTRACK can be reached through its World Wide Web site at or by calling 800-872-2599 (612-937-5161). In addition to its Minneapolis headquarters, ONTRACK operates customer service centers in Los Angeles, San Jose, Washington, D.C., New York, Tokyo, London, Paris and Stuttgart.
Statements in this release concerning the future prospects of ONTRACK are “forward-looking statements” under the Federal securities laws. There can be no assurance that future results will be achieved, and actual results could differ materially from forecasts, estimates, and summary information contained in this press release. Important factors that could cause actual results to differ materially are included but are not limited to those listed in the ONTRACK Annual Report incorporated by reference into the Form 10-K for the year ended December 31, 1997, under the caption “ Management's Discussion and Analysis of Financial Condition and Results of Operations -- Forward Looking Statements”.

Media Contact:

Ben Blomberg, 952-516-3617,