9 million of noncash stockbasedcompensation

Second quarter GAAP net income was $4.2 million, or $0.03 per diluted share,compared to net income of $3.7 million, or $0.02 per diluted share, in thesecond quarter of fiscal 2008. General and administrative expenses decreasedpartially due to a $1.6 million favorable insurance settlement related topre-merger litigation claims. When combined with reductions in sales andmarketing and lower amortization expense for acquired intangibles these loweroperating expenses offset a $7.7 million restructuring charge. Interest incomedeclined due to lower investment balances and yields. Other income improved asthe second quarter of fiscal 2008 included a $4.2 million impairment charge forauction rate securities. The company estimates currency fluctuations had apositive impact of less than $0.01 on net earnings per diluted share for thesecond quarter. Included in GAAP net income and earnings per diluted share results are pre-taxexpenses of $11.5 million for restructuring, amortization of acquired intangibleassets, amortization of purchased maintenance contracts and pre-merger claimsreserve adjustments as well as $2.9 million of non-cash stock-basedcompensation.

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Non-GAAPnet income per diluted share includes a non-GAAP provision for income taxesbased upon an estimated rate of 35 percent. "Lawson delivered solid results in the quarter despite the difficult economicenvironment," said Harry Debes, Lawson president and chief executive officer."We met our revenue guidance and the high-end of our earnings guidance. Ourprimary goal for the quarter was to improve non-GAAP operating margin. 30, 2008 were $397.3 million, down2 percent from revenues of $406 million during the same fiscal 2008 period.Currency fluctuations accounted for a minor portion of the GAAP and non-GAAPrevenue decline. GAAP net income was $1.7 million, or $0.01 per diluted share,declining from net income of $9.3 million, or $0.05 per diluted share in thecomparable fiscal 2008 period.

Decreases in sales and marketing, general andadministrative and amortization of intangible expenses were offset by $7.5million of restructuring. The company estimates currency fluctuations had anegative impact of less than $0.01 on net earnings per diluted share for thesix-month period. In addition, the six-month results include a reduction to GAAPand non-GAAP net income of $2.1 million, primarily related to the $1.9 millionadjustment reported in the first quarter, associated with sales incentivecompensation expense that should have been recorded in the fourth quarter offiscal 2008 and earlier periods. The company has determined that these expenseswere immaterial to reported results for those periods. They are also expected tobe immaterial to fiscal 2009 results.

Excluding theseexpenses and including $0.4 million of revenue impacted by purchase accountingadjustments, non-GAAP net income for the six months ended Nov 30, 2008, was$25.3 million, or $0.15 per diluted share. The company estimates currencyfluctuations had a negative impact of less than $0.01 on non-GAAP net earningsper diluted share for the six-month period in fiscal 2009. Non-GAAP net incomeper diluted share includes a non-GAAP provision for income taxes based upon anestimated rate of 35 percent. Non-GAAP earnings per diluted share of $0.15 wereflat year-over-year compared to results for the six months ended Nov 30, 2007.