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CAM Commerce Solutions, Inc.

17075 Newhope Street
Fountain Valley, CA 92708

CAM Reports 3rd Quarter Results
Earnings rise sharply on higher revenues

July 26, 2004

Contact: Mathew Hayden, President
Hayden Communications, Inc.
858-704-5065

(FOUNTAIN VALLEY, CA) CAM Commerce Solutions, Inc. (NASDAQ: CADA) reported 21% increase in revenues to $6.3 million for the three months ended June 30, 2004 compared to $5.2 million for the same period of fiscal 2003. Net income for the three months ended June 30 2004 increased to $721,000 or $0.17 per fully diluted share, compared to $86,000 or $0.03 per share for the quarter ended June 30, 2003. The figures for the quarter ended June 30, 2004 included $170,000 in additional revenue and $126,000 in net income related to a change in the accounting estimate, for the three months ended June 30, 2004 were $6.1 million and $595,000 or $0.14 per fully diluted share, respectively. The change in accounting estimate resulted fron the Company's ability to better estimate the payment processing revenues based on the accumulation of sufficient historical information required to analyze trends and formulate a reasonable estimate. In prior periods, payment processing revenues were recognized on a cash basis due to the lack of historical information available to make reliable estimate. The June quarter was the Company's seventh consecutive quarter of increased revenues and fifth consecutive quarterly profit increase.

Revenues for the nine months ended June 30, 2004 increased 16% to 17.4 million compared to $15.0 million for the same period of fiscal 2003. Net income for the nine months ended June 30, 2004 was $1.6 million or $0.41 per fully diluted share, compared to a net loss of $(410,000) or $(0.13) per share. Revenues and net income, excluding the effect of the change in accounting estimate, for the nine months ended June 30, 2004 were $17.2 million and $1.4 million or $0.38 per fully diluted share, respectively.

The results included income tax expenses for the State of California, based on California's suspension of the use of net operating loss carryforwards. The Company does not currently pay Federal income taxes due to the utilization of net operating loss carryforwards.

As of June 30, 2004, the Company had $16.6 million in cash and marketable securities, or $4.46 per shares outstanding at June 30, 2004, compared to $12.4 million at September 30, 2003, or $3.82 per share based on shares outstanding at September 30, 2003.

"In the June quarter we saw modest improvement in system sales, while X-Charge business continued to show strong growth resulting in the continuing trend of higher earnings on increasing revenues," said Geoff Knapp, CEO. "We are not seeing any significant improvement in market conditions for the system sales side even with an improving economy; although overall conditions of the business do appear to be better than at any time in the past 3 years. Nearly all of the improvement in our results over the past several quarters has been directly related to a better business model that emphasizes high margin recurring revenue, customer satisfaction and buildingour brands. X-Charge payment processing revenues, excluding the additional revenue related to the change in accouting estimate, were $916,000 for the June quarter of 2004. The revenues more than doubled from the same quarter a year ago. The reseller channel for X-Charge continues to expand with approximately 100 active resellers, and interest from new potential resellers remains positive."

Calculation of Cash and Marketable Securities Per Share

  JUNE 30
2004
(Unaudited)
JUNE 30
2003
Cash and cash equivalents $16,091,000 $10,889,000
Marketable available-for-sale securities 501,000 1,541,000
Total cash and marketable securities (numerator) $16,592,000 $12,430,000
Shares outstanding (denominator) 3,723,000 3,253,000
Cash and marketable securities per share $4.46 $3.82

Calculation of the Effect of Change in Accounting Estimate

  THREE MONTHS ENDED
JUNE 30, 2004
(Unaudited)
NINE MONTHS ENDED
JUNE 30, 2004
(Unaudited)
 
Revenuess $6,272,000 $17,372,0000
Effect of change in accounting estimate (170,000) (170,000)
Revenues without change in accounting estimate $6,102,000 $17,202,000
 
Net income $721,000 $1,571,000
Effect of change in accounting estimate (126,000) (126,000)
Net income without change in accounting estimate $595,000 $1,445,000
Diluted net income per share $0.17 $0.41
Diluted net income per share without change in accounting estimate $0.14 $0.38
Shares used in computing diluted net income per share 4,124,000 3,850,000

About CAM Commerce Solutions

CAM Commerce Solutions, Inc. provides total commerce solutions for traditional and web retailers that are based on the Company's open architecture software products for inventory management, point of sale, sales transaction processing, accounting, and payment processing. These solutions often include hardware, installation, training, service, and payment processing services provided by the Company. You can visit CAM Commerce Solutions at www.camcommerce.com.

Important Information

The statements made in this news release, including those relating to the expectations of profitability forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation “will,” “should,” “believe,” “expect,” “anticipate,” “outlook,” “forecast,” “optimistic,” “feel,” “goal,” “plans,” “estimates,” “may,” “seeks,” “would,” “future,” “bright,” “projected”, and indicate future events or trends, or that are not statements of historical matters, identify forward- concerning financial results for future quarters are not actual results and are based upon preliminary assumptions management believes to be reasonable at this time. Investors should not rely upon they are subject to a variety of risks, uncertainties, and other factors that could cause actual expectations, and the company expressly does not undertake any duty to update forward-looking date of this news release. The performance of any one month or quarter may not be indicative given prevailing market and economic uncertainties. In addition to the factors set forth elsewhere competitive, technological, and other factors identified in CAM Commerce Solutions’ filings Commission could affect the forward looking statements contained in this news release.

CAM COMMERCE SOLUTIONS, INC.
CONDENSED STATEMENT OF INCOME
(Unaudited)
(In thousands, except per share data)

  THREE MONTHS ENDED NINEE MONTHS ENDED
  JUNE 30
2004
JUNE 30
2003
JUNE 30
2004
JUNE 30
2003
REVENUES        
Net hardware, software and installation revenues $3,812 $3,413 $10,632 $9,803
Net service revenues 1,374 1,341 4,136 4,084
Net payment processing revenues 1,086 410 2,604 1,076
Total net revenues 6,272 5,164 17,327 14,963
COSTS AND EXPENSES        
Cost of hardware, software and installation revenues 1,899 1,610 5,228 4,838
Cost of service revenues 503 527 1,521 1,548
Cost of payment processing revenues 51 30 134 81
Total cost of revenues 2,453 2,166 6,883 6,467
Selling, general and administrative expenses 2,743 2,494 7,911 7,760
Research and development expenses 387 485 1,136 1,350
Total costs and operating expenses 5,583 5,145 15,930 15,577
Operating income (loss) 689 19 1,442 (614)
Interest income 87 72 250 209
Income (loss) before provision for income taxes 776 91 1,692 (405)
Provision for income taxes 55 5 121 5
 
Net income (loss) $721 $86 $1,571 $(410)
 
Basic net income (loss) per share $0.20 $0.03 $0.45 $(0.13)
Diluted net income (loss) per share $0.17 $0.03 $0.41 $(0.13)
 
Shares used in computing basic net income (loss) per share 3,634 3,134 3,467 3,117
 
Shares used in computing diluted net income (loss) per share 4,124 3,257 3,850 3,117

CAM COMMERCE SOLUTIONS, INC.
CONDENSED BALANCE SHEETS
(In thousands, except per share data)

  JUNE 30
2004
SEPTEMBER 30
2003
ASSETS    
Current assets:    
Cash and cash equivalents $16,091 $10,889
Marketable available-for-sale securities 501 1,541
Accounts receivable, net 1,674 1,214
Inventories 300 272
Other current assets 185 102
Total current assets 18,751 14,018
 
Property and equipment, net 574 710
Intangible assets, net 738 908
Other assets 245 305
Total assets $20,308 $15,941
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $512 $518
Accrued compensation and related expenses 972 687
Deferred service revenue and customer deposits 1,587 1,455
Other accrued liabilities 350 263
Total current liabilities 3,628 2,923
Stockholders' equity:    
Common stock, $.001 par value; 12,000    
shares authorized, 3,754 shares issued and    
outstanding at September 30, 2004 and 3,253 at    
September 30, 2003 4 3
Paid-in capital 16,591 14,271
Accumulated other comprehensive income - 23
Retained earnings (accumulated deficit) 292 (1,279)
Total stockholders' equity 16,887 13,018
Total liabilities and stockholders' equity $20,308 $15,941

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