Total revenues for the third quarter grew to $47.3 million, up 4% sequentially, and up from $45.3 million for the third quarter of the prior year. Pro forma net income for the third quarter was $1.4 million, or $0.06 per diluted share. Pro forma net income is adjusted for the pre-tax effects of amortization of goodwill (see Schedule A). After inclusion of amortization of goodwill, the Company reported a net loss for the third quarter of $2.2 million or $0.10 per share, compared with a net loss of $286,000 or $0.01 per diluted share for the comparable quarter last year.

Total revenues for the demand-side business segment, which include revenues from the Company’s MAXIMO product line, grew to $42.6 million, up 3% sequentially, and up from $36.3 million for the comparable quarter of the prior year, an increase of 17%.

Total revenues for the supply-side business segment, which include revenues from the Company’s MRO content processing and supplier enablement hosted solutions, were $4.7 million, up 4% sequentially, and down 47% from the comparable quarter of the prior year, reflecting in part the Company’s shift to an ASP subscription model.

The balance sheet for the period ended June 30, 2001 contained $42.4 million in cash and marketable securities and no long-term debt. Deferred revenue increased to $23.4 million, and days sales outstanding improved from 92 to 80 days, exceeding the Company’s internal target.

I am very pleased with the solid performance of our business this quarter, commented Chip Drapeau, president and CEO, MRO Software. We remain on track to achieve our fiscal year goal of producing sequential increases in revenue each quarter and delivering at the high end of the forecasted EPS range. Our unique ability to manage the entire asset life cycle as well as a plant’s trading community has created substantial savings opportunities for our customers, and as a result our competitive advantage and business momentum continue to improve.

Our continued focus on cash collections and operating expense control strengthened our balance sheet and improved operating margins this quarter, commented Peter Rice, executive vice president and chief financial officer. We are very pleased to report growth in revenues, profits, and cash balances. DSO improved 12 days, we added $5.5 million to our cash position, and the visibility of our business has improved for our fourth quarter even in a tough economic climate.

Rice continued, In light of the current economic conditions, the Company’s initial revenue projections for fiscal year 2002 remain consistent with our revenue performance in fiscal year 2001, with top line growth of approximately 10%. At this growth rate, we expect to improve operating margins allowing us to realize a 50-100% increase in pro forma EPS for fiscal year 2002.

SOURCE: COMPANY PRESS RELEASE