FactSet Research Systems Reports Record Results for Third Quarter of Fiscal Year 2005 and...

NORWALK, Conn. -- FactSet Research Systems Inc. (NYSE: FDS), a major supplier of computer-based financial and economic data to the investment community, today announced its results for the third quarter of fiscal 2005.

For the quarter ended May 31, 2005, revenues rose 24.8% compared to the

prior year period to $79.3 million. Operating income increased 25.4% to $27.4 million, net income advanced 33.1% to $19.6 million and diluted earnings per share rose 30.0% to $0.39. Included in the third quarter of fiscal 2005, were income tax benefits of $1.9 million or $0.04 per share relating to the final settlement of prior year tax returns and additional federal and state tax planning. Also included in the third quarter of fiscal 2004 was an income tax benefit of $760,000 which added $0.02 to earnings per share.

For the nine months ended May 31, 2005, revenue increased 24.8% to $229.9 million and operating income rose 24.7% to $80.2 million. Net income grew 22.6% to $53.1 million while earnings per share increased 24.7% to $1.06. Income tax benefits were recorded resulting in a $0.04 and $0.03 increase in diluted earnings per share during the first nine months of fiscal 2005 and 2004, respectively.

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FactSet Research Systems Inc.
Consolidated Statements of Income (Condensed and Unaudited)


                      Three Months Ended        Nine Months Ended
                       May 31, 2005 and         May 31, 2005 and
(In thousands,           May 31, 2004              May 31, 2004
 except per share
 data)               2005     2004   Change   2005      2004    Change
                   -------- -------- ------ --------- --------- ------
Revenues           $79,342  $63,600   24.8% $229,877  $184,228   24.8
Income from
 operations         27,367   21,831   25.4    80,244    64,373   24.7
Net income          19,551   14,687   33.1    53,118    43,332   22.6
Diluted earnings
 per share           $0.39    $0.30   30.0     $1.06      $.85   24.7
Diluted weighted
 average common
 shares             49,993   48,823           50,120    51,136
----------------------------------------------------------------------

"FactSet's third quarter performance was excellent," said Philip A. Hadley, Chairman and CEO. "We achieved healthy improvements in subscriptions, workstations and clients, as well as balanced growth across our products and from each geographic region."

As of May 31, 2005, the Company's 1,464 clients, representing approximately 24,000 users, subscribed to services totaling $317.9 million in subscriptions, an increase of 21.8% in the past fiscal year. Of this total, subscriptions from FactSet's overseas operations were $84.8 million. FactSet's client retention rate continued to be above 95%. "Subscriptions" at any given point in time represent the forward-looking revenues for the next 12 months from all subscription services currently being supplied to clients.

Other operational highlights of the third quarter of fiscal 2005 include:

--Revenues from FactSet's European and Pacific Rim operations were $17.3 million and $3.9 million, up 74% and 33% respectively, from the same period a year ago.

--Demand for FactSet's Portfolio Analytics Workstations continued to rise, with over 415 clients consisting of approximately 3,200 users, subscribing to the services as of May 31, 2005.

--Receivables from clients and clearing brokers, net declined 19% from $67.2 million to $54.2 million.

--The effective tax rate for the quarter was 29.4%. Included in the effective rate was the realization of $1.9 million tax benefits from the final settlement of prior year tax returns and the results of additional federal and state planning. Excluding this benefit, the effective rate for the 3rd quarter would have been 36.2% down from 37.0% for the first half of 2005.

--The company repurchased 388,000 shares of its common stock.

--Economics Analysis 2.0 was released, featuring an improved charting engine, expanded options, and added functionality for analyzing company, macroeconomic, commodity and financial data.

--Alpha Testing 3.0 was released, featuring many enhancements, including unlimited formulas and factors, as well as report customization.

--Standard & Poor's Compustat Global Basic data was released on FactSet, featuring nearly 20,000 global active and inactive securities.

On June 20, 2005, FactSet's Board of Directors authorized the repurchase of up to $50 million of common stock. The timing of this authorization corresponds to the completion in the third fiscal quarter of 2005 of the 1.5 million share repurchase program approved in July 2002. Repurchases will be made from time to time in the open market and privately negotiated transactions, subject to market conditions. No minimum number of shares to be repurchased has been fixed. The Company intends to fund its share repurchases with cash on hand and cash generated from future operations.

FactSet also announced today that its Board of Directors has named Townsend ("Tom") Thomas as FactSet's first Chief Content Officer. As CCO, Mr. Thomas will focus on FactSet's proprietary content collection efforts and will continue to establish strategy and policy for FactSet in that area. He will no longer hold the title of Chief Technology Officer. Jeff Young, currently Director of Systems Engineering, will continue in his existing role while assuming the title of Chief Technology Officer as well. As CTO, Mr. Young will chair a newly formed Technology Strategy Committee at FactSet.

Business Outlook

The following forward-looking statements reflect FactSet's expectations as of June 21, 2005. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. The Company does not intend to update its forward-looking statements until its next quarterly results announcement, other than in publicly available statements.

Fourth Quarter Fiscal 2005 Expectations

--Revenues are expected to range between $80 million and $82 million.

--Operating margins are expected to range between 34% and 35%.

--The effective tax rate is expected to range between 36.0% and 36.4%.

Full Year Fiscal 2005

--Capital expenditures should total approximately $22 million.

This news release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the Company's strategy for growth, product development, market position, subscriptions, expected expenditures and financial results are forward-looking statements. Forward-looking statements may be identified by words like "expected," "anticipates," "plans," "intends," "projects," "should," "indicates," "continues," "subscriptions" and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in FactSet's filings with the Securities and Exchange Commission, particularly its latest annual report on Form 10-K, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, the ability to hire qualified personnel; maintenance of the Company's leading technological position; the impact of global market trends on the Company's revenue growth rate and future results of operations; the negotiation of contract terms with corporate vendors, data suppliers and potential landlords; retention of key clients; the successful resolution of ongoing audits by tax authorities; the continued employment of key personnel; the absence of U.S. or foreign governmental regulation restricting international business; the ability to continue to integrate acquired businesses; and the sustainability of historical levels of profitability and growth rates in cash flow generation.

Conference Call

The Company will host a conference call today, June 21, 2005 at 11:00 a.m. (DST) to review the third quarter fiscal 2005 earnings release. To listen, please visit the investor relations section of the Company's website at www.factset.com.

About FactSet

FactSet Research Systems Inc. is a leading provider of global financial and economic information, including fundamental data on tens of thousands of companies worldwide. Combining more than 200 databases into its own dedicated online service, the Company also provides the tools to download, combine and manipulate the data for investment analysis.

The Company, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations, along with its affiliates, from more than twenty-two locations worldwide, including Boston, New York, Chicago, San Mateo, London, Frankfurt, Paris, Tokyo, Hong Kong, and Sydney.

FactSet Research Systems Inc.
Consolidated Statements of Financial Condition

(In thousands and unaudited)                          May     August
                                                      31,       31,
ASSETS                                               2005      2004
                                                   --------- ---------

Cash and cash equivalents                           $62,656   $78,580
Investments                                          27,919    19,524
Receivables from clients and clearing brokers, net   54,183    45,935
Deferred taxes                                        5,420     5,875
Other current assets                                  4,423     4,834
                                                   --------- ---------
 Total current assets                               154,601   154,748
Property, equipment, and leasehold improvements,
 net                                                 50,924    43,909
Goodwill                                             74,466    19,937
Intangible assets, net                               27,465     5,944
Deferred taxes                                          224     3,098
Other assets                                          2,697     2,291
                                                   --------- ---------
 Total assets                                      $310,377  $229,927
                                                   ========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses               $18,369   $21,123
Accrued compensation                                 13,798    17,328
Deferred fees                                        17,327     9,530
Dividends payable                                     2,394     2,182
Current taxes payable                                 3,319     7,624
                                                   --------- ---------
 Total current liabilities                           55,207    57,787
Deferred taxes                                        6,851        --
Deferred rent and other non-current liabilities       9,137     7,594
                                                   --------- ---------
 Total liabilities                                   71,195    65,381
                                                   --------- ---------

Stockholders' Equity:
 Common stock                                           543       352
 Capital in excess of par value                      89,342    60,420
 Retained earnings                                  289,407   243,324
 Treasury stock                                    (141,126) (139,504)
 Accumulated other comprehensive gain (loss)          1,016       (46)
 Total stockholders' equity                         239,182   164,546
                                                   --------- ---------

 Total liabilities and stockholders' equity        $310,377  $229,927
                                                   ========= =========




FactSet Research Systems Inc.
Consolidated Statements of Income

                                Three Months Ended  Nine Months Ended

                                 May 31, 2005 and   May 31, 2005 and
                                  May 31, 2004         May 31, 2004

(In thousands, except per share
 data and unaudited)               2005     2004      2005      2004
                                 -------- -------- --------- ---------

Revenues                         $79,342  $63,600  $229,877  $184,228
                                 -------- -------- --------- ---------

Cost of services                  23,770   18,394    67,070    54,464
Selling, general and
 administrative                   28,205   23,375    82,563    65,391
                                 -------- -------- --------- ---------

Total operating expenses          51,975   41,769   149,633   119,855
                                 -------- -------- --------- ---------

Income from operations            27,367   21,831    80,244    64,373

Other income                         316      223       700     1,644
                                 -------- -------- --------- ---------

Income before income taxes        27,683   22,054    80,944    66,017

Provision for income taxes         8,132    7,367    27,826    22,685
                                 -------- -------- --------- ---------

Net income                       $19,551  $14,687   $53,118   $43,332
                                 ======== ======== ========= =========

Basic earnings per common share    $0.41    $0.31     $1.11     $0.89
                                 ======== ======== ========= =========

Diluted earnings per common share  $0.39    $0.30     $1.06     $0.85
                                 ======== ======== ========= =========

Weighted average common shares
 (Basic)                          48,044   46,784    47,879    48,958
                                 ======== ======== ========= =========

Weighted average common shares
 (Diluted)                        49,993   48,823    50,120    51,136
                                 ======== ======== ========= =========



FactSet Research Systems Inc.
Consolidated Statements of Cash Flows

                                                    Nine Months Ended

(In thousands and unaudited)                        May 31,   May 31,
                                                      2005      2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                          $53,118   $43,332
Adjustments to reconcile net income to net cash
 provided by operating activities
    Depreciation and amortization                    13,508    10,730
    Deferred tax provision (benefit)                  2,832    (1,955)
    Gain on sale of equipment                            --      (235)
    Accrued ESOP contribution                            --     1,980
                                                   --------- ---------
Net income adjusted for non-cash items               69,458    53,852
Changes in assets and liabilities, net of effects
 of acquisitions
    Receivables from clients and clearing brokers,
     net                                             (4,402)   (4,035)
    Accounts payable and accrued expenses            (5,052)    1,798
    Accrued compensation                             (1,951)     (758)
    Deferred fees and commissions                       744      (830)
    Current taxes payable                            (4,287)    3,942
    Landlord contributions to leasehold
     improvements                                       965     6,092
    Other working capital accounts, net               1,472    (1,219)
Income tax benefits from stock option exercises       5,888       792
                                                   --------- ---------
Net cash provided by operating activities            62,835    59,634

CASH FLOWS FROM INVESTING ACTIVITIES
(Purchases) Sales of investments, net                (8,314)   58,291
Acquisition of businesses, net of working capital
 acquired                                           (52,134)   (6,478)
Purchases of furniture, equipment and leasehold
 improvements                                       (16,987)  (12,467)
                                                   --------- ---------
Net cash (used in) provided by investing
 activities                                         (77,435)   39,346
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payments                                    (6,509)   (5,676)
Repurchase of common stock                          (10,996) (110,515)
Proceeds from employee stock plans                   16,230     6,237
                                                   --------- ---------
Net cash used in financing activities                (1,275) (109,954)
Effect of exchange rate changes on cash and cash
 equivalents                                            (49)       --
                                                   --------- ---------

Net decrease in cash and cash equivalents           (15,924)  (10,974)
Cash and cash equivalents at beginning of period     78,580    51,126
                                                   --------- ---------
Cash and cash equivalents at end of period          $62,656   $40,152
                                                   ========= =========

Supplementary Schedules to 3rd Quarter Earnings Press Release For
the Quarter Ended May 31, 2005

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The financial information included in these schedules contains
detail not typically included in FactSet's financial statements. To
aid an investor's ability to make more precise interpretations of
FactSet's financial results, the supplementary schedules below
highlight facts involving currency, royalty payments to data vendors
and revenues that are not subscription based. Although the impact of
each item individually and in the aggregate has been immaterial to
FactSet's annual results, these tables might enhance an investor's
overall understanding of quarterly revenues. In subsequent quarters,
FactSet does not plan to provide these details unless the information
is material.
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Annual Subscription Value ("ASV")
Rollforward of Quarterly Change
Fiscal 3rd Quarter Ended May 31, 2005
In Millions and Unaudited
----------------------------------------------------------------------

ASV at February 28, 2005                                       $307.6

 Change - Fiscal 3rd Quarter Ended May 31, 2005
 ----------------------------------------------
 New subscriptions, net                                  10.2
 Currency                                                (1.7)
 Reclassification (1)                                     1.8    10.3
                                                       ------- -------

                                                               -------
ASV at May 31, 2005                                            $317.9
                                                               =======


(1) Under a new agreement with an existing supplier, FactSet now
    licenses data for redistribution to clients. As a result, both
    revenues and data costs (included in cost of services) increased
    by an identical amount representing the royalty charges paid by
    FactSet to the data supplier. Previously, the data supplier
    maintained data contacts directly with each FactSet client and
    data royalty charges were not included in FactSet's income
    statement.
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Non-subscription revenues
Last Four Fiscal Quarters Ending May 31, 2005
In Millions and Unaudited

                                         FY 2004   Fiscal Year 2005
                                         ------- ---------------------
                                              Q4      Q1     Q2     Q3
                                         ------- ---------------------
 Non-subscription revenues (1)              0.6     1.0    0.9    0.9
 Revenues                                  67.7    74.1   76.5   79.3
                                         ------- ---------------------
                                      %     0.9%    1.3%   1.2%   1.1%
                                         ======= =====================


(1) Revenues from workstations purchased for use by summer interns and
    for FactSet services that are not sold on a subscription basis and
    are excluded from FactSet's reported annual subscription value
    (ASV). The aforementioned amounts are included in FactSet's
    revenues each quarter.

IR_FDS