Library Technology Guides

St. Louis, Missouri, USA --Data Research Associates, Inc. (DRA) (Nasdaq: DRAI) announced today that revenues for its first quarter of fiscal 2001, ended December 31, 2000, were $5.7 million, compared with $6.5 million for the first quarter of fiscal 2000. The company reported a loss for the first quarter of fiscal 2001 of $205,000, or four cents per share basic and diluted, compared with earnings of $206,000, or four cents per share basic and diluted, for the same period in fiscal 2000.

"Although we are disappointed in the results of this quarter," stated DRA President and CEO, Michael J. Mellinger, "throughout the company's history, first quarter earnings have typically been the lowest of the fiscal year."

According to Mellinger, hardware, software and service and other revenues declined in the current quarter from the first quarter of last year. He noted that last year's first-quarter software and hardware components benefited from a sizable Taos installation during the period.

"The ongoing stream of maintenance revenue from our legacy products - DRA Classic, Inlex 3000 and MultiLis - increased over the previous year," he stated, "however, we did not have the same Taos service revenue benefit that we experienced last year related to several new installations."

Mellinger continued, "We are committed to controlling costs during this period of declining revenues. Although we continue to hire programmers for our Taos product and to offer and implement annual raises to keep our salaries in line with the marketplace, we were able to contain salaries and employee benefits to only a $0.1 million increase from the $2.7 million in the first quarter of last year. General and administrative expenses declined from $1.3 million to $1.2 million and depreciation and amortization declined from $490,000 to $429,000 in the current quarter from the same quarter last year."

"While we continue to be encouraged about our long-term growth prospects, we remain cautious in the near term because of the timing related to new contract decisions and existing customer conversions," Mellinger said. "Additionally, we perceive the library automation market to be in a temporarily quiet state of activity. Nevertheless, we are increasing our sales and marketing activities in anticipation of the expected release of the Acquisitions module and launch of our ASP product, now named ASPen, later this fiscal year."

During the first quarter DRA resumed purchasing the company's stock on the open market yet maintained a strong cash position with $20.7 million in cash and short-term investments at December 31, 2000. In November 2000, the board authorized a $2 million share repurchase. For the quarter ended December 31, 2000, DRA purchased 27,900 shares for $166,000 and continues to be an active participant as opportunities arise.

Both DRA's quarterly conference call beginning at 4:00 p.m. CST today, Thursday, January 18, and its Annual Meeting of Shareholders beginning at 4:00 p.m. CST on Wednesday, February 14, will be webcast and can be accessed via the company's web page at www.dra.com

Data Research Associates, Inc., headquartered in St. Louis, is a leading systems integrator for libraries and other information providers, offering its own proprietary information services software, third-party software and hardware, Internet, World Wide Web and other networking services; and other related support services.

This news release contains forward-looking statements, including statements as to anticipated or expected results, beliefs, opinions and future financial performance. These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause DRA's actual results to differ materially. Specific risk factors for the statements contained herein include, but are not limited to, the Company's ability to continue to enhance the Taos product; customer acceptance of that Product; DRA's ability to meet installation schedules; and timing of negotiations for sites who have selected Taos but have not yet signed a contract. Some of these risk factors, as well as additional risk factors, are discussed in detail in DRA's Annual Report and in Exhibit 99-1 of its Form 10-K for fiscal year 2000. DRA does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Data Research Associates, Inc.
Summary of Quarterly Results (in thousands, except per share data)