State of The Art / IRVINE

Nature of business: Develops and markets accounting and financial management software. Total employees: 240 In Orange County: 240 Stock listing in The Times: On NASDAQ “SteArt” Ticker symbol: “SOTA” Friday’s stock close: $11.50 One-week change: Up $0.50

Analyst review: “State of the Art reported quarterly earnings in line with our expectations-- 16 cents per share versus 12 cents last year--on better-than-expected sales of $7 million, up 41% over last year. Across the board, the tone of business was very encouraging: software sales to end users grew more than 20% over last year, and the newer products and services such as ClientCare, Mac P&L; and business forms are off to strong starts. The company has successfully implemented a solid recovery over the past three quarters and is now undertaking a promising expansion of its franchise. Its balance sheet is exceptionally strong, with $24.2 million in cash and no debt.”--Peter Rogers, analyst Robertson Stephens & Co., San Francisco SALES VS. PROFITS Chart amount in millions

Fiscal year ending Dec. 31 Dec. 31 Dec. 31 2 qtrs. 2 qtrs. 1990 1991 1992 1992 1993 Revenue $16.2 $19.1 $21.6 $9.7 $12.8

Fiscal year ending Dec. 31 Dec. 31 Dec. 31 2 qtrs. 2 qtrs. 1990 1991 1992 1992 1993 Profit $3.1 $4.8 $5.1 $2.3 $2.6

Corporate outlook: “Our focus on top line revenue growth paid off with a 41% increase in earnings during second quarter 1993 over second quarter 1992. At the same time, earnings increased by 33%, so we are confident that we have a good gauge on our business and know where our new products are taking us. Approximately one-third of the increase is attributable to sales of our flagship product, the MAS 90 Evolution/2 accounting software package. We recenty expanded into Canada, and later this year, a number of new products are due out. We are very much on target and expect to maintain robust growth rates.”

--David S. Samuels, chairman/CEO

RETURN ON INVESTMENT: 3-YEAR SUMMARY AND YEAR-TO-DATE:

Fiscal year ending Dec. 31 Dec. 31 Dec. 31 2 qtrs. 1990 1991 1992 1992 52-week high* n/a $12.50 $16.50 $16.50 52-week low* n/a $6.25 $3.25 $8.50 Book value per share $8.86 $2.76 $2.96 $2.91 Price per share* n/a $9.25 $8.00 $8.25 Net profit per share $0.39 $0.55 $0.55 $0.25 Price-to-earnings ratio 44:1 17:1 15:1 17:1 Avg. return on investor equity 44.2% 18.0% 18.5% 16.7%

Fiscal year ending 2 qtrs. 1993 52-week high* $12.75 52-week low* $6.75 Book value per share $3.45 Price per share* $8.75 Net profit per share $0.29 Price-to-earnings ratio 15:1 Avg. return on investor equity 17.1%

*State of The Art sold 3.4 million shares in its initial public offering May 23, 1991; Net proceeds, $11.8 million For information call or write, State of the Art: 56 Technology, Irvine, Calif., 92718. (714) 753-1222 Source: State of the Art ; Bloomberg Business News. Researched by JANICE L. JONES / Los Angeles Times