Datastream Systems, Inc. Reports Third Quarter Results

Company reports highest level of profitability since the second quarter 1999

Datastream 7i license sales grow 27% over the third quarter 2002
 
Greenville, S.C. — October 22, 2003 — Datastream Systems, Inc. (Nasdaq: DSTM) today announced results for the Company’s third quarter ended September 30, 2003. 

Total revenues for the third quarter of 2003 were $22.4 million compared with $22.0 million for the third quarter of the prior year.  Total software license revenues for the third quarter of 2003 increased slightly to $6.2 million compared to $6.0 million for the third quarter of the prior year.  Net income for the third quarter of 2003 was $1.2 million compared with net income of $340,733 for the same period last year.  Basic and diluted earnings per share were $0.06 per share for the third quarter of 2003 compared with $0.02 per share for the same period last year.

Sequentially, third quarter 2003 total revenues decreased 4% from second quarter 2003 revenues of $23.4 million.  Third quarter 2003 software license revenues decreased 2% from second quarter 2003 total software license revenues of $6.3 million.  Net income for the third quarter 2003 increased from $252,462, or $0.01 per share, in the second quarter of 2003. 

Larry Blackwell, Datastream's chief executive officer, commented, “We are pleased with annual growth in revenues, profits and cash, and we believe our product offering gives us opportunities for additional revenue growth.”

The Company’s cash and cash equivalents totaled $42.5 million at September 30, 2003, an increase of 31% from $32.4 million at September 30, 2002 and a 4% increase from $40.8 million at June 30, 2003.  Days Sales Outstanding, or DSOs, were at 67 days for the third quarter 2003, a decrease of 4 days over the third quarter of 2002 and an increase of 2 days over the second quarter 2003.  Net cash provided by operating activities for the third quarter 2003 was approximately $2.3 million, representing the 12th consecutive quarter of positive operating cash flow.

Datastream 7i license sales were $3.8 million in the third quarter of 2003, representing a 27% increase in Datastream 7i license revenue from the same quarter of 2002 and a 6% increase from the second quarter of 2003.  For the third quarter 2003, Datastream 7i license revenue represented 61% of the Company’s license revenue mix, up from 49% of the license revenue mix for the same quarter of 2002.

The Company expects to generate earnings per share between $0.05 and $0.08 in the fourth quarter 2003 and between $0.04 and $0.06 in the first quarter 2004.

Conference Call
Datastream will host a conference call today at 9:00 a.m., EDT with any and all interested persons to review its performance and discuss its financial expectations and strategic direction.  Please dial 1-800-915-4836 and ask for the Datastream teleconference.  For international callers, the dial-in number is 1-973-317-5319.  The replay will be available from 11:00 a.m., EDT on October 22, 2003 until 11:59 p.m., EDT on October 24, 2003. The dial-in number for the replay is 1-800-428-6051 and the pass code is 286209.  For international callers, the dial-in for the replay is 1-973-709-2089.  Datastream’s conference call will be accessible today via live audio Webcast at 9:00 a.m., EDT at www.datastream.net/investor.

About Datastream Systems, Inc.
Datastream Systems, Inc. (NASDAQ: DSTM) provides Asset Performance Management software and services to enterprises worldwide, including more than 65 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.


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