GREENVILLE, S.C. — November 2005 — Datastream Systems, Inc. today announced results for the company’s third quarter ended September 30, 2005.Total revenues for the third quarter of 2005 increased 6% to $24.3 million compared with $22.9 million for the third quarter of the prior year.
North American and international percentages of total revenues were 65% and 35%, respectively for the third quarter of 2005 compared to 60% and 40%, respectively for the same period of 2004. Total software license revenues decreased 9% for the third quarter of 2005 to $5.8 million from $6.4 million in the third quarter of the prior year.
Professional services and support revenues increased 12% to $18.5 million from $16.5 million in the prior year quarter.
Operating income for the third quarter of 2005 increased 8% to $1.4 million compared with operating income of $1.3 million for the same period last year. Net income for the third quarter of 2005 increased 32% to $1.2 million compared with net income of $874,000 for the same period last year.
Diluted earnings per share were $0.06 for the third quarter of 2005 compared to $0.04 for the same period last year.
Total revenues for the first nine months of 2005 increased 3% to $72.7 million compared to $70.3 million for the same period last year. North American and international percentages of total revenues were 64% and 36%, respectively for the first nine month of 2005 compared to 60% and 40%, respectively for the same period of 2004.
Total software revenue decreased 4% to $18.8 million for the first nine months of 2005 compared to $19.5 million for the same period last year.
Professional services and support revenues for the first nine months of 2005 increased 6% to $53.9 million compared to 50.8 million for the same period last year.
Operating income for the first nine months of 2005 decreased 37% to $3.6 million compared to $5.7 million for the same period last year.
Net income for the first nine months of 2005 decreased 18% to $3.1 million compared to $3.8 million for the same period last year. Total non-recurring professional fees for the first nine months of 2005 were $2.5 million compared to $592,000 for the same period last year.
Non-recurring expenses include professional fees incurred related to the restatement of prior periods, start-up and implementation costs associated with Sarbanes-Oxley compliance and audit and legal fees related to Chinese operations. This amount does not include recurring audit and professional fees.
Diluted earnings per share for the nine month period ending September 30, 2005 decreased to $0.15 compared to $0.19 for the same period last year.Datastream 7i™ license revenue was $4.2 million in the third quarter of 2005, a 2% decrease in Datastream 7i license revenue from the same quarter of 2004.
For the third quarter 2005, Datastream 7i license revenue represented 72% of the company’s license revenue mix, compared to 67% in the same quarter of 2004. Datastream 7i license revenue for the first nine months of 2005 increased 2% to $13.3 million from 13.0 million for the same period last year.
Datastream 7i license revenues for all periods include Datastream 7i, Datastream 7i Buy, and third party software sold in conjunction with Datastream 7i.Larry Blackwell, Datastream's chief executive officer, commented, “Though we experienced a bit of a slowdown in license deals internationally in the third quarter, we are encouraged by a number of recent customer commitments on larger transactions that should position us for strong year-end results.”The Company’s cash, cash equivalents and short-term investments totaled $54.7 million at September 30, 2005, an increase of 16% from $47.2 million at September 30, 2004.
Net cash provided by operating activities for the third quarter 2005 was approximately $1.9 million, representing the 20th consecutive quarter of positive operating cash flow.The Company expects to continue profitable growth in Q4 2005 driven by total revenues from $25.0 to $26.0 million, an estimated 4% to 8% increase over the same period last year.
The Company expects approximately 5% annual revenue growth and diluted earnings per share of $0.38 to $0.48 in 2006. The Company plans to have an investor call during the first week of December 2005 to discuss these results and 2006 prospects in more detail.
About Datastream Systems, Inc. Datastream provides Asset Performance Management software and services to enterprises worldwide, including more than 60 percent of the Fortune 500. Datastream’s solutions combine world-class asset management functionality with advanced analytics to deliver a powerful platform for optimizing enterprise asset performance.By using Datastream’s solutions, customers can maintain and manage capital assets – such as manufacturing equipment, vehicle fleets and buildings – and create analyses and forecasts so they can take action to improve future performance.
Datastream’s flagship product, Datastream 7i™, delivers a complete Asset Performance Management infrastructure by combining an Internet, web services architecture with broad enterprise asset management functionality, integrated procurement, advanced analytics and multi-site capability. Datastream was founded in 1986 and has customers in more than 140 countries. For more information, visit www.datastream.net .