MRO Software Reports Third Quarter Results; Record Quarterly Revenues and Strong Software Sales Drive Continued Earnings Growth

MRO Software, Inc. (Nasdaq: MROI), the leading provider
of asset and service management solutions, today announced results for
the Company's third quarter of fiscal 2006 ended June 30, 2006.
   Total revenues for the third quarter were $60.3 million compared
with $53.2 million for the third quarter last year, an increase of 13
percent. The Company reported net income for the third quarter of $7.5
million or $0.27 per diluted share, compared with net income of $4.1
million or $0.16 per diluted share for the same quarter of last year,
a net income increase of 83 percent.
   Revenues from software license sales for the third quarter were
$21.5 million, compared with $19.2 million for the same quarter last
year, an increase of 12 percent. Support and services revenues were
$38.8 million for the third quarter, compared with $34.0 million for
the same quarter last year, an increase of 14 percent.
   During the third quarter, the Company sold 221 software licenses.
Customers across a range of industries and geographies purchased MRO
Software products during the quarter, including: City of Austin, City
of Corpus Christi, Cummins Inc., Detroit Newspapers, GAF Materials
Corp., Honeywell Middle East, Johns Hopkins Hospital, Lee County Port
Authority, McCarren International Airport, Naval Facilities
Engineering, Orange County Public Works, Pennsylvania State
University, Provident Energy Ltd, Sacramento Regional Wastewater,
Sarasota County Government, Toshiba Corp., Tubelines, University of
Kansas Medical Center, U.S. Army, and the U. S Air Force.
   The balance sheet as of June 30, 2006 contained $161.0 million in
cash and marketable securities and no long-term debt. This compares
with $133.2 million in cash and marketable securities as of September
30, 2005, an increase of $27.8 million for the first three quarters of
the fiscal year. As of June 30, 2006, deferred revenue was $37.5
million, and days sales outstanding (DSO) was 72 days.
   "Our third fiscal quarter financial results continued our recent
trend of record quarterly revenues and improved productivity
throughout all our operations," said Chip Drapeau, president and CEO,
MRO Software. "MXES's unique architecture, deep vertical function and
IT Service Management applications continue to differentiate us
against other competitive offerings."
   "The results of our initiatives to improve productivity and drive
increases in operating margins are now evident," said Peter Rice,
executive vice president and CFO, MRO Software. "This strategy has
produced improvements in our key financial metrics, and further
strengthened the Company's financial foundation."
   For fiscal year 2006, the Company now expects total revenue will
grow in the range of 10 to 15 percent over fiscal 2005, with growth in
software revenues expected to remain in the range of 10 to 20 percent
over fiscal 2005. The Company expects fiscal 2006 earnings to be at
the high end of its $0.85 to $0.90 range, on a diluted per share
basis.
   For fiscal year 2007, the Company expects total revenue growth to
be in the range of 5 to 10 percent above fiscal 2006 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 per diluted share over fiscal 2006 results.
   The Company will conduct a conference call to discuss the
quarter's results on Thursday, July 20, 2006 at 4:30 p.m. EDT.
   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 2564074. 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 the same conference
ID: 2564074.
   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 penetration into the markets addressed by our new
products; the Company's reliance on, and unanticipated delays or
obstacles to, larger software license transactions; and those factors
discussed in the Section entitled "Risk Factors" in Item 2 of our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2006.

   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    Nine Months Ended
                                   June 30,             June 30,
                                2006      2005       2006       2005
                              --------  --------   --------  ---------
(in thousands, except per share data)
  Revenues:
    Software                 $ 21,513  $ 19,233   $ 51,990  $  44,231
    Support and services       38,835    33,997    114,702     99,534
                              --------  --------   --------  ---------
      Total revenues           60,348    53,230    166,692    143,765
                              --------  --------   --------  ---------

  Cost of revenues:
    Software                    1,352     2,608      4,652      5,087
    Support and services       17,983    16,441     51,530     48,376
                              --------  --------   --------  ---------
      Total cost of revenues   19,335    19,049     56,182     53,463
                              --------  --------   --------  ---------

  Gross profit                 41,013    34,181    110,510     90,302

  Operating expenses:
    Sales and marketing        16,637    15,861     45,969     44,443
    Product development         8,089     8,183     23,331     21,921
    General and
     administrative             5,556     4,486     15,167     13,606
                              --------  --------   --------  ---------
      Total operating
       expenses                30,282    28,530     84,467     79,970
                              --------  --------   --------  ---------

  Income from operations       10,731     5,651     26,043     10,332

    Interest income, net        1,468       693      3,861      1,811
    Other (expense)/income,
     net                          (48)        7         16         78
                              --------  --------   --------  ---------

  Income before income taxes   12,151     6,351     29,920     12,221

  Provision for income taxes    4,679     2,289     11,298      4,377
                              --------  --------   --------  ---------

  Net income                 $  7,472  $  4,062   $ 18,622  $   7,844
                              ========  ========   ========  =========

  Net income per share,
   basic                     $   0.29  $   0.16   $   0.72  $    0.31
  Net income per share,
   diluted                   $   0.27  $   0.16   $   0.69  $    0.31

  Shares used to calculate
   net income per share
    Basic                      26,061    25,327     25,797     25,206
    Diluted                    27,393    25,936     26,880     25,687






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


                                           June 30,      September 30,
                                             2006            2005
                                       ------------------------------
(in thousands)               ASSETS

Cash and cash equivalents             $     120,802   $     120,301
Marketable securities                        33,283           5,130
Accounts receivable, net                     48,274          40,362
Other current assets                          9,045           6,678
                                       -------------   -------------
         TOTAL CURRENT ASSETS               211,404         172,471
                                       -------------   -------------

Marketable securities                         6,902           7,743
Property and equipment, net                   6,868           7,210
Intangible assets, net                       48,181          49,455
Other assets                                  8,405           9,491
                                       -------------   -------------
   TOTAL ASSETS                       $     281,760   $     246,370
                                       =============   =============


           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities                   $      30,113   $      30,116
Deferred revenue                             37,165          31,718
                                       -------------   -------------
   TOTAL CURRENT  LIABILITIES                67,278          61,834
                                       -------------   -------------

Other long term liabilities                   2,275           2,830
                                       -------------   -------------
   TOTAL LIABILITIES                         69,553          64,664
                                       -------------   -------------


   STOCKHOLDERS' EQUITY                     212,207         181,706
                                       -------------   -------------

      TOTAL LIABILITIES &
       STOCKHOLDERS' EQUITY           $     281,760   $     246,370
                                       =============   =============
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