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Datastream Systems Announces Results for 1999
Fourth Quarter iProcure Transaction Volume up 239% Sequentially From the Third Quarter of 1999

Fourth Quarter License Sales Exceed Company Target by 15%

Annual DSOs Down 27 Days, Fourth Quarter DSOs Improve 10 Days Sequentially

Cash Flow From Operations up 79% Annually, up 97% From Third Quarter of 1999,


GREENVILLE, S.C., Feb. 1 /PRNewswire/ -- Datastream Systems, Inc. (Nasdaq: DSTM - news) today announced results for the fourth quarter and year-end 1999.

Total revenue for the quarter ended December 31, 1999 was $30.2 million, a slight increase from $29.8 million in the fourth quarter of 1998 and an increase of 3% from $29.2 million in the previous quarter. License revenue increased 17% from the third quarter of 1999 to $9.8 million in the fourth quarter of 1999. Pro forma net income for the fourth quarter was $2.6 million or $.12 per diluted share. Pro forma net income excludes the effects of amortization of goodwill, capitalized software costs, and one-time effects of acquisition and restructuring-related charges.

iProcure

The total dollar value of e-commerce transactions through Datastream's iProcure grew in the fourth quarter to $649,494, a 239% increase over $191,514 in the third quarter 1999. During the quarter, iProcure gained 95 new customers resulting in 189 active customers purchasing parts online at the end of the fourth quarter. The network now boasts 240 companies procuring parts and equipment online. Total expenses relating to iProcure for the fourth quarter increased to approximately $1.8 million, compared to $1.0 million for the third quarter of 1999. The iProcure business generated an estimated loss of $.06 per diluted share in the fourth quarter of 1999 versus an estimated loss of $.03 per diluted share in the third quarter of 1999.

``This quarter, we exceeded key targets in license revenue, DSOs, and operating cash flow,' said Larry Blackwell, President, and CEO of Datastream. ``We are particularly motivated by the e-commerce trends, which suggest increased signs of market acceptance for our e-commerce solutions.' In a related event, Datastream announced plans to invest $28 million in its e-commerce division, iProcure.

Datastream

Software sales increased 17% to $9.8 million in the fourth quarter of 1999 from $8.4 million in the third quarter of 1999. Consulting services decreased 6% from the prior quarter, a decrease from $14.9 million in the third quarter of 1999 to $14.0 million. Technical support increased 8% from $5.8 million in the third quarter of 1999 to $6.3 million in the fourth quarter of 1999.

The quarter was marked by significant improvements in important balance sheet items. Days sales outstanding (DSOs) for the fourth quarter were 90 days, an improvement from the third quarter of 10 days. Other balance sheet improvements from the third quarter of 1999 include a 7% decrease in unbilled revenue, a 5% increase in deferred revenue and a 68% increase in cash. Annually, DSOs improved 27 days. For the year, cash and investments increased 97% to $22.2 million.

For the year, Datastream's revenues increased 20% to $118.8 million from $98.6 million in 1998, driven by a 32% growth in service revenue and a 31% growth in support revenue. Software sales for the year increased 3% from $38.2 million in 1998 to $39.3 in 1999. Consulting services increased by 32% from $42.6 million to $56.3 million and technical support increased 31% from $17.7 million to $23.2 million.

Net income for the year increased 58% from $4.7 million to $7.4 million, or an increase in diluted earnings per share from $.23 to $.37. Pro forma net income for the year decreased 28% from $18.5 million in 1998 to $13.3 million in 1999, or a decrease in diluted pro forma net income per share from $.91 to $.66.

``In 1999, we achieved significant financial goals directed at improved balance sheet metrics,' said Alex Estevez, Datastream's Chief Financial Officer. ``We are particularly pleased with the DSO and cash trends which we believe are key indicators of Datastream's future success in funding Internet- based solutions.'

About iProcure

iProcure, a division of Datastream Systems, addresses the highly specific needs of organizations purchasing industrial parts and services. iProcure's Web-based, automated industrial procurement helps companies realize savings by overcoming inefficiencies inherent in traditional paper-, phone- and fax-based purchasing and procurement processes. iProcure creates a Web-based procurement network that brings together customers and a wide range of suppliers whose catalogs contain more than two million industrial parts. For more information, please visit www.iprocure.com .

About Datastream Systems, Inc.

Datastream Systems helps companies ensure plant efficiency through intelligent asset management and online industrial procurement. The company's products and services help a wide range of customers in 129 countries- including more than 60 percent of the Fortune 500-increase equipment uptime, reduce maintenance, repair and operations costs and ultimately, streamline business procurement processes. The company has sold over 50,000 systems worldwide, accounting for more than 56 percent of the unit market share* in CMMS/EAM. The company's iProcure network, located at www.iProcure.com , provides procurement capabilities for the industrial market.

Based on number of system units sold, as reported by Automation Research Corporation, 1999.

DATASTREAM SYSTEMS, INC. AND SUBSIDIARIES
Pro forma Statements of Income
(unaudited)

Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998

Net Income $773,814 (1,096,381) $7,435,146 4,700,505
In-process research and
development,
restructuring
and other charges (294,201) 5,469,281 (294,201) 9,990,256
Write-off of
capitalized software -- 3,345,600 -- 3,943,544
Amortization 2,076,921 945,200 7,158,245 3,614,251
Capitalized Software
Costs -- (1,244,407) (967,007) (3,730,054)

Proforma net income $2,556,534 7,419,293 $13,332,183 18,518,502

Diluted proforma net
income per share $ .12 .37 $ .66 .91

Diluted weighted average
common shares
outstanding 20,485,592 19,986,904 20,098,519 20,279,434



DATASTREAM SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited)


Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998

Software Product $9,830,242 12,127,878 $39,267,761 38,226,287
Consulting Services 14,020,162 12,664,883 56,333,517 42,621,294
Technical Support 6,347,411 5,029,522 23,174,800 17,707,276

Total Revenues $30,197,815 29,822,283 $118,776,078 98,554,857
Cost of Software
Product 758,801 700,535 2,319,732 2,109,357
Cost of Consulting 10,258,478 7,064,271 34,718,039 22,401,797
Cost of Technical
Support 1,413,096 1,430,826 5,405,844 4,730,756
Amortization and
Write-off of Cap
Software 1,312,806 3,732,350 4,101,785 5,513,794

Cost of Sales 13,743,181 12,927,982 46,545,400 34,755,704

Gross Profit 16,454,634 16,894,301 72,230,678 63,799,153

Operating Expenses:

Sales & Marketing 9,389,982 7,030,334 33,694,598 25,397,349
Research &
Development 3,800,042 2,835,604 14,554,565 8,174,226
General &
Administration 2,665,589 2,791,204 10,833,236 7,644,882
Goodwill Amortization 764,115 558,450 3,056,460 2,044,001
In-process R&D,
Restructuring and
other charges (294,201) 5,469,281 (294,201) 9,990,256

Operating Expenses 16,325,527 18,684,873 61,844,658 53,250,714

Operating Income
(Loss) 129,107 (1,790,572) 10,386,020 10,548,439

Other Income, Net 1,098,934 30,731 1,461,345 536,264


Income Before Provision
for Income Taxes 1,228,041 (1,759,841) 11,847,365 11,084,703

Provision for Income
Taxes 454,227 (663,460) 4,412,219 6,384,198

Net Income $773,814 (1,096,381) $7,435,146 4,700,505

Diluted net income
per share $ .04 (.06) $ .37 .23

Diluted weighted average
common shares
outstanding 20,485,592 19,986,904 20,098,519 20,279,434




DATASTREAM SYSTEMS, INC. AND SUBSIDIARIES

Balance Sheet

ASSETS

December 31, December 31,
1999 1998
(unaudited)

Cash and Cash Equivalents $ 17,912,797 6,739,209
Accounts Receivable, Net 30,221,995 32,440,963
Investments, Current 250,790 2,574,898
Unbilled Receivables 2,311,247 2,761,922
Other Current Assets 4,621,500 5,893,045
Total Current Assets 55,318,329 50,410,037

Investments, Non-current 4,200,000 2,034,744
Property and Equipment, Net 13,583,471 12,886,791
Goodwill, Net 15,073,239 18,323,801
Capitalized Software Development Costs, Net -- 3,134,779

Total Assets $ 88,175,039 86,790,152


LIABILITIES AND STOCKHOLDERS EQUITY

December 31, December 31,
1999 1998
(unaudited)

Deferred Revenue $ 8,587,980 8,292,829
Other Current Liabilities 12,078,327 16,325,407
Long Term Debt, less Current Portion 224,285 297,092
Deferred Income Taxes -- 1,268,400
Total Stockholders' Equity 67,284,447 60,606,424

Total Liabilities and Stockholders' Equity $ 88,175,039 86,790,152


DATASTREAM SYSTEMS, INC. AND SUBSIDIARIES

Summary Consolidated Statement of Cash Flows
(unaudited)

Twelve Months Ending
December 31, December 31,
1999 1998


Cash Flows from operating Activities:
Net Income $7,435,146 4,700,505
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation 4,566,238 3,502,000
Amortization 7,158,245 3,614,251
Write-off of in-process research and development -- 3,540,008
Write-off of capitalized software -- 3,943,544
Other operating activity adjustments (2,035,525) (9,740,874)
Net cash provided by operating activities 17,124,104 9,559,434

Net cash used in investment activities (5,747,049) (7,131,707)

Net cash provided by (used in) financing
activities (203,467) 1,902,095

Net increase in cash and cash equivalents 11,173,588 4,329,822
Cash and cash equivalents at beginning
of period 6,739,209 2,409,387

Cash and cash equivalents at end of period $ 17,912,797 6,739,209


iProcure, BizSurplus, MP2i, MP2 Enterprise, MP5i and World Leader in Maintenance Solutions are marks of Datastream Systems, Inc. or its subsidiaries. All other products or company names mentioned are used for identification purposes only and may be trademarks of their respective owners.

This news release contains forward-looking statements which involve a number of risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. Potential risks and uncertainties include, but are not limited to, those described in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission for the year ended December 31, 1998. With respect to such forward-looking statements, Datastream seeks the protections afforded by the Private Securities Litigation Reform Act of 1995
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