Revenues for the quarter were a record $59.3 million, representing a 119% increase over the comparable quarter of fiscal 2000. Pro forma earnings for the quarter, excluding the amortization of goodwill and purchased intangible assets, were $9.2 million, or $0.12 per share on a diluted basis, as compared with pro forma earnings of $3.1 million, or $0.04 per share on a diluted basis, in the 2nd quarter of fiscal 2000.

As we focus on rapid value delivery to our customers, we are taking advantage of current market and economic conditions to accelerate penetration in our key target markets, said Greg Brown, Chairman & CEO of Micromuse. Our outstanding performance in this environment demonstrates both the value that the Netcool® suite delivers to customers and its market position as the de facto industry standard. Customers across all our core markets are increasing the use of Netcool multi-vendor management applications to improve the overall efficiency, increase profitability and ultimately compete successfully.

The 2nd quarter included the following highlights:

Sequential quarterly license revenue growth was 19%

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Pro forma operating margins grew from 17.6% in Q1 2001 to a record 19.2% in Q2 2001.

Days’ Sales Outstanding were 42 days as of March 31, 2001.

Profitable operations enabled cash, cash equivalents and investments to increase by a record $29.7 million to $166.4 million.

The total customer count increased by 107 to reach 1,119.

Revenues from service provider customers were 82% of revenue.

European revenues were a record $18.6 million, representing 31% of total revenues.

Asia Pacific revenues grew 161% to a record 8% of revenue.

The Netcool/Impact customer base grew by 30 to a total of 142.

The Netcool/Precision customer base grew by 16 to a total of 46.

The Netcool/Visionary customer base grew by 7 to a total of 24.

Increased activity from OEMs, systems integrators and resellers, with a record 115 channel partners contributing to revenue in the quarter. Sales through channel partners were 44% of total revenue.

Sun Microsystems became a global Netcool reseller.

Net income for the quarter, including the amortization of goodwill and purchased intangible assets, was $7.0 million or $0.09 per share on a diluted basis, as compared with net income of $1.5 million, or $0.02 per share, in the second quarter of fiscal 2000.

SOURCE: COMPANY PRESS RELEASE