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Reynolds Reports 2nd Quarter Earnings, $23 Million Net Income

Press release from the issuing company

DAYTON, Ohio, April 25, 2001 The Reynolds and Reynolds Company (NYSE: REY) today reported revenues of $241.3 million for the quarter ended March 31, 2001, an increase of 9 percent over the prior year. Net income for the quarter of $23.8 million or 32 cents per share was in line with consensus estimates. During the quarter, the company recorded a 3-cent charge associated with a work stoppage on a software development contract, and a 2-cent gain related to discontinued operations. Without these two items, earnings per share from continuing operations were 33 cents, 14 percent above the prior year. "We achieved a strong performance in an uncertain economic environment. We expect the weaker market conditions to continue, negatively impacting consulting revenues and new systems sales. We are keeping our cost structure in line with our revenues," President and CEO Lloyd "Buzz" Waterhouse said. "We continue to increase our market share lead with our ERA3 system ‹ the most widely used retail management system in North America. We are on schedule with the integration of our customer relationship management solutions with the ERA3 system. We continue to aggressively strengthen our broad suite of solutions as well." Highlights of the quarter include: * Strong operating margins in Retail Management Solutions drivenby high recurring service revenues. * Improved operating margins in Documents driven by manufacturingconsolidation and other cost improvements. * Continued growth in Automark, the company's Web services arm,which was selected by Sonic Automotive Inc. and Asbury Group astheir Web site developer for over 200 dealership locations. * The launch of ReySourceª, an Internet solution thatprovides a unique procurement option to automotive retailers tohelp manage their purchase of business forms, office supplies andother products and services in their dealership. * The selection by BMW Canada Inc. as its exclusive provider ofretail management systems and related products and services forall their dealers. * Continued recognition for high achievement in customer supportas evidenced by Reynolds' Technical Assistance Center (TAC)winning the Help Desk Institute's 2001Team Excellence Award ‹the gold medal of the customer support profession. "While we don't expect to achieve double-digit sales growth goals in this business environment, we are encouraged by our performance through the first six months and we remain confident in our ability to meet consensus earnings estimates for the fiscal year," Waterhouse said.

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