Wednesday, October 11, 2000

Ontrack Data International reports preliminary third quarter results below expectations

Expectations and enthusiasm remain strong

ONTRACK Data International, Inc. (NASDAQ: ONDI) today reported that it expects revenue for the third quarter ended September 30, 2000, to be in the range of $13.2 million to $13.4 million and earnings per diluted share to be in the range of $0.07 to $0.09. Before amortization for goodwill, the company expects earnings per diluted share to be in the range of $0.10 to $0.12. For the third quarter of 1999, Ontrack recorded revenue of $12.0 million, earnings per diluted share of $0.16 and earnings before amortization of goodwill of $0.18.

Ontrack attributes the current quarter's results to a combination of higher-than-expected investments in its Electronic Information Management (EIM) business and Application Service Provider (ASP) delivery model as the company prepares those business lines for future growth, and to lower–than-expected revenue and earnings as a result of a recently recognized seasonality in the EIM business, an extended sales cycle for its Rapid RecallTM product line and unfavorable foreign currency fluctuations. While the EIM business continues to show good year-over-year growth, vacation time in the court system during August and early September reduced the activity level, ultimately impacting the company's EIM business.

"While we are disappointed with results for the third quarter, we remain optimistic for the remainder of the year and for 2001," said Michael Rogers, chief executive officer of Ontrack. "We have made investments, including people and resources, in our EIM and Rapid Recall businesses and our ASP delivery model, which are necessary for a successful implementation of our strategy. Our announcement does not materially change our growth prospects nor the momentum we have going into the fourth quarter and 2001,” Rogers continued.

Investors are invited to listen to management's comments during the company's third quarter conference call to be held on October 25, 2000 at 4:00 PM Central Time. Participants may access the call by dialing 888-343-2180 or may listen to a replay beginning two hours following the conclusion of the call and available for one week after by dialing 800-633-8284 and entering the code – 16548422.

Ontrack, a leading provider of data availability software and service solutions, helps customers protect, manage, recover and discover their valuable data. Using its hundreds of proprietary tools and techniques, Ontrack is able to recover lost or corrupted data from virtually all operating systems and types of storage devices through its do-it-yourself, remote and in-lab capabilities. Ontrack also offers award-winning PC utility software programs and services to help prevent critical data loss through a broad line of problem-solving, file-management and productivity utilities. 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 other locations in Los Angeles, Boulder, Colo., Washington D.C., New York, London, Paris and Stuttgart. Ontrack also makes its data recovery services available in Tokyo through its strategic alliance with Y-E Data, a company with over 25 years of experience in storage devices.

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ONTRACK and Ontrack brand and product names used herein are trademarks or registered trademarks of ONTRACK Data International, Inc. in the United States and/or other countries. All other brands or product names are trademarks or registered trademarks of their respective holders.