MRO Software Reports First Quarter Results; Improved Operating Margins Drive 33% Increase in Earnings

MRO Software, Inc. (Nasdaq: MROI), the leading provider
of asset management solutions, today announced results for the
Company's first quarter of fiscal 2006 ended December 31, 2005.
   Total revenues for the first quarter were $49.1 million compared
with $47.4 million for the first quarter last year, an increase of 4
percent. On a GAAP basis, the Company reported net income for the
first quarter of $4.2 million or $0.16 per diluted share, compared
with net income of $3.2 million or $0.12 per diluted share for the
same quarter of last year, an increase of 33 percent.
   Revenues from software license sales for the first quarter were
$12.8 million, compared with $14.8 million for the same quarter last
year, a decrease of 14 percent. Support and services revenues were
$36.3 million for the first quarter, compared with $32.5 million for
the same quarter last year, an increase of 12 percent.
   During the first quarter, the Company sold 214 software licenses.
Customers across a range of industries and geographies purchased MRO
Software products during the quarter including: Bombardier
Transportation, British Library, BP, Caterpillar Ltd, CB Richard
Ellis, Cephalon Inc, DaimlerChrysler AG, ESolutions-Dubai, GasNet
Australia, Guinness PLC, Siemens AG, Oman Refinery Company, Jia Xing
Power Plant, LifeScan Scotland, Malayawata Steel, Massachusetts
General Hospital, Methanex Chile Ltd, Office Max, Shenzenm Guangqian
Electric Power, Taiwan High Speed Rail Corp, UCLA, Votoranim, and
Yunnan Electric Power.
   The balance sheet as of December 31, 2005 contained $136.5 million
in cash and marketable securities and no long-term debt. This compares
with $114.7 million in cash and marketable securities as of December
31, 2004, an increase of $21.8 million year-over-year. As of December
31, 2005, deferred revenue was $31.0 million, and days sales
outstanding (DSO) was 65 days.
   "I am pleased with our first quarter results. We were able to
produce solid earnings and operating margins, despite slightly
lower-than-expected license revenues," said Chip Drapeau, president
and CEO, MRO Software. "We continue to successfully sell our products
into a wide range of vertical industries, and we anticipate that much
stronger license performance during our second quarter will bring us
in line with our first half revenue and earnings goals."
   "We continue to build our strong financial base. We improved
operating margins and added more than $3 million to our cash balance
during the quarter," said Peter Rice, executive vice president and
CFO, MRO Software.
   For fiscal year 2006, the Company maintains the guidance provided
last quarter, and expects overall revenue growth to be in the range of
5 to 10 percent above fiscal 2005 results. Software revenues are
expected to grow in the range of 10 to 20 percent. As a result, the
Company expects earnings to grow in the range of 15 to 25 percent over
fiscal 2005 results.
   Consistent with this prior guidance, the Company expects software
revenues for the first half of fiscal 2006 to be in the range of $28
million to $32 million, and expects second quarter GAAP EPS to be in
the range of $0.16 to $0.18.
   The Company will conduct a conference call to discuss the
quarter's results on Thursday, January 19, 2006 at 4:30 p.m. EST.
   To participate in this call within the U.S. and Canada, dial (800)
932-9896, international callers should dial [phone]; all
participants should use conference ID 4058490. A digital recording of
the call will be available beginning two hours after the call and will
be available through January 26, 2006. To access the replay within the
U.S. and Canada, dial [phone], international callers should
dial [phone]; all participants should use conference the same
ID: 4058490.
   A webcast of the call is available at: www.mro.com/investor. A
transcript of the call will be promptly archived on the Investor
Relations portion of the Company's website, and may be found at:
www.mro.com/investor.

   About MRO Software, Inc.

   MRO Software is the leading provider of asset and service
management solutions. The Company's integrated suite of applications
optimizes performance, improves productivity and service levels and
enables asset-related sourcing and procurement across the entire
spectrum of strategic assets.
   The Company's asset management solutions allow customers to manage
the complete lifecycle of strategic assets including: planning,
procurement, deployment, tracking, maintenance and retirement. Using
MRO Software's solutions, customers improve production reliability,
labor efficiency, material optimization, software license compliance,
lease management, warranty and service management and provisioning
across the asset base.
   MRO Software (Nasdaq: MROI) is a global company based in Bedford,
Mass., with approximately 900 employees and more than 300,000
end-users. The Company markets its products through a direct sales
organization in combination with a network of international
distributors. MRO Software has sales offices throughout North America,
Europe, Asia/Pacific and Latin America. Additional information on MRO
Software can be found at http://www.mro.com.

   Forward-Looking Statements

   This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The Company's actual results
could differ materially from those set forth in the forward-looking
statements. Certain factors that might cause such a difference
include, among other things, continued stagnation in the market for
our traditional products, increased competitive pressures, slower than
anticipated customer acceptance of our new products, and those factors
discussed in the Section entitled "Part 1A. Risk Factors" in our
Annual Report on Form 10-K for the year ended September 30, 2005.

   Maximo(R) is a registered trademark, and MRO Software(TM) and
MXES(TM) are trademarks, of MRO Software, Inc.
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                          MRO SOFTWARE, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS
                             (unaudited)

                                                   Three Months Ended
                                                      December 31,
                                                  --------------------
                                                      2005       2004
                                                  ---------  ---------
(in thousands, except per share data)
        Revenues:
            Software                             $  12,815  $  14,824
            Support and services                    36,317     32,532
                                                  ---------  ---------
                     Total revenues                 49,132     47,356
                                                  ---------  ---------
        Cost of revenues:
            Software                                 1,383      1,280
            Support and services                    16,174     15,615
                                                  ---------  ---------
                     Total cost of revenues         17,557     16,895
                                                  ---------  ---------

        Gross profit                                31,575     30,461

        Operating expenses:
            Sales and marketing                     13,601     15,231
            Product development                      7,453      6,780
            General and administrative               4,628      4,570
                                                  ---------  ---------
                     Total operating expenses       25,682     26,581
                                                  ---------  ---------

        Income from operations                       5,893      3,880

            Interest income, net                     1,225        471
            Other (expense)/income, net               (191)       570
                                                  ---------  ---------

        Income before income taxes                   6,927      4,921

        Provision for income taxes                   2,711      1,758
                                                  ---------  ---------

        Net income                               $   4,216  $   3,163
                                                  =========  =========

       Net income per share, basic               $    0.16  $    0.13
                                                  ---------  ---------
       Net income per share, diluted             $    0.16  $    0.12
                                                  ---------  ---------

        Shares used to calculate net income
         per share
             Basic                                  25,594     25,041
             Diluted                                26,591     25,392



                          MRO SOFTWARE, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                              (unaudited)

                                           December 31,  September 30,
                                                2005          2005
                                          ------------- --------------
(in thousands)                 ASSETS

Cash and cash equivalents                 $   123,642   $     120,301
Marketable securities                           7,095           5,130
Accounts receivable, net                       35,582          40,362
Other current assets                            8,328           6,678
                                           -----------   -------------
         TOTAL CURRENT ASSETS                 174,647         172,471
                                           -----------   -------------

Marketable securities                           5,784           7,743
Property and equipment, net                     7,337           7,210
Intangible assets, net                         49,026          49,455
Other assets                                    9,012           9,491
                                           -----------   -------------
         TOTAL ASSETS                     $   245,806   $     246,370
                                           ===========   =============


      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities                       $    24,867   $      30,116
Deferred revenue                               30,515          31,718
                                           -----------   -------------
         TOTAL CURRENT  LIABILITIES            55,382          61,834
                                           -----------   -------------

Other long term liabilities                     2,726           2,830
                                           -----------   -------------
         TOTAL LIABILITIES                     58,108          64,664
                                           -----------   -------------

         STOCKHOLDERS' EQUITY                 187,698         181,706
                                           -----------   -------------

         TOTAL LIABILITIES &
          STOCKHOLDERS' EQUITY            $   245,806   $     246,370
                                           ===========   =============
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