Datastream Systems, Inc. Announces Second Quarter Results

Datastream Systems, Inc. Announces Second Quarter Results

GREENVILLE, S.C., July 25 /PRNewswire/ -- Datastream Systems, Inc.
(Nasdaq: DSTM) today announced its results for the second quarter of 2000.
The results are consistent with the Company's announcement on July 5, 2000 of
its preliminary results for the quarter.
Total revenue for the second quarter ended June 30, 2000 decreased 24.6%
to $23.0 million, as compared to $30.5 million in the second quarter of 1999.
The Company generated a pro forma net loss of $5.5 million, or a pro forma
loss of $.27 per diluted share for the second quarter of 2000, versus
$4.5 million pro forma net income, or pro forma net income of $.23 per diluted
share, for the second quarter of 1999. Pro forma net loss excludes the effect
of amortization of goodwill, capitalized software costs, and one-time effects
of acquisition and restructuring-related charges.
"While iProcure showed impressive growth, the maintenance software
business remained in transition as we moved to an e-business model," stated
Larry Blackwell, Datastream's chief executive officer. "Going forward we
believe that iProcure's current success in the marketplace can be a
significant catalyst for long-term growth on both sides of the business."

iProcure
The total dollar value of e-commerce transactions through Datastream's
iProcure network grew in the second quarter to approximately $2.4 million,
approximately a 2000% increase over the second quarter of 1999 and doubling
results over the first quarter 2000. During the quarter, Datastream gained
six corporate hub accounts which, in combination with its four prior hubs,
represent more than $1 billion of annual MRO (maintenance, repair and
operations) spend, all of which have committed to a transaction fee model.
Total expenses relating to iProcure for the second quarter increased to
approximately $4.8 million, compared to approximately $3.4 million in the
first quarter 2000. The iProcure business generated a net loss of $0.15 per
diluted share in the second quarter 2000 versus a net loss of $0.10 per
diluted share in the first quarter of 2000.

Asset Maintenance
For the second quarter of 2000, software sales decreased 47.4% annually to
$5.6 million, professional services sales decreased 18.2% to $11.6 million,
and technical support sales increased 1.6% to $5.9 million versus the same
quarter a year ago. International sales were $8.0 million, a 27.7% decrease
from $11.1 million in the second quarter of 1999. International revenue
represented 35% of total revenue in second quarter 2000, a slight decrease
from 36% in the second quarter 1999.

Combined Financial Statistics
Cash and liquid investments totaled $17.6 million, a 25.6% increase from
second quarter of 1999. Days Sales Outstanding (DSOs) were 92 days, an
improvement of eight days from the first quarter of 2000, and an improvement
of four days from the second quarter of 1999.

About Datastream Systems, Inc.
Datastream Systems, Inc. is a leader in maintenance software and online
procurement for manufacturing operations. With more than 60 percent of the
Fortune 500 among its customer base, Datastream Systems helps a wide range of
manufacturing organizations across a vast spectrum of vertical markets to
reduce MRO costs and maximize equipment uptime through intelligent asset
management and streamlined business procurement processes. The company has
sold more than 55,000 systems worldwide, in 129 countries, accounting for more
than 56 percent of the unit market share* in computerized maintenance
management and enterprise asset management systems. The company's Internet-
architected enterprise asset maintenance products address the highly-specific
needs of plants and facilities for effectively tracking maintenance
operations. The iProcure(TM) marketplace completes the asset management cycle
by allowing automated procurement of industrial parts and supplies between
network buyers and sellers. For more information, visit http://www.dstm.com.

*Based on number of system units sold, as reported by ARC Advisory Group,
1999.

DATASTREAM SYSTEMS, INC. AND SUBSIDIARIES

Pro forma Statement of Income (Loss)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999

Net Income (Loss) $(6,259,395) 3,010,344 $(9,327,173) 6,656,980
Amortization 755,416 1,529,760 1,510,831 2,877,266
Capitalized Software
Costs -- -- -- (967,007)
Proforma net income
(loss) $(5,503,979) 4,540,104 $(7,816,342) 8,567,239
Diluted proforma net
income (loss) per
share $ (.27) .23 $ (.39) .43

Diluted weighted average
common shares
outstanding 20,074,827 19,842,144 19,838,839 19,839,700

DATASTREAM SYSTEMS, INC. AND SUBSIDIARIES

Consolidated Statement of Operations

Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999

Software Product $ 5,574,688 10,594,653 $ 13,127,616 21,017,121
Professional
Services 11,573,680 14,181,376 23,240,913 27,355,315
Technical Support 5,862,630 5,768,104 11,893,413 10,970,418

Total Revenues $ 23,010,998 30,544,133 $ 48,261,942 59,342,854
Cost of Software
Product 567,789 530,778 1,029,930 1,065,865
Cost of Professional
Services 8,989,728 8,181,862 17,944,520 14,871,773
Cost of Technical
Support 1,764,985 1,280,993 3,379,301 2,598,813

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