WESTBOROUGH, Mass., Nov. 14 /PRNewswire-FirstCall/ -- ClearStory Systems, Inc. (OTC:CSYS) (BULLETIN BOARD: CSYS) , an established provider of digital asset management (DAM) and enterprise content management (ECM) solutions, today announced financial results for its second quarter ended September 30, 2005. Total revenues for the second quarter of fiscal 2006 were $1.8 million, compared to total revenues of $2.6 million for the second quarter of fiscal 2005. Total revenues for the first six months of fiscal 2006 were $4.0 million, compared to total revenues of $5.6 million for the first six months of fiscal 2005. The net loss for the second quarter of fiscal 2006 was $1.1 million, or a loss per share of $0.22, compared to net loss of $595,000, or a net loss per share of $0.12, for the second quarter of fiscal 2005. The net loss for the first six months of fiscal 2006 was $1.9 million, or a loss per share of $0.39, compared to net loss of $495,000, or a net loss per share of $0.13, for the first six months of fiscal 2005. "During the second quarter, we were selected by a premier media services company, further validating the architecture and scalability of our recently released Enterprise Media Server (EMS) product. We continue to be encouraged by the positive reception our new platform is receiving in the market," commented Henry F. Nelson, ClearStory President and Chief Executive Officer. "We continue to focus a significant amount of our sales and marketing resources on the emerging growth digital media market which resulted in an increase in the number of new customers; nevertheless, we did not achieve our targeted number of new customers in this quarter." The Company recently announced an enhanced version of its next-generation media services platform Enterprise Media Server (EMS) that builds on the product's enterprise DAM capability, offering integration with IBM DB2 Content Manager and expanded standard database support. ClearStory also announced that EMS has been recognized by industry publication, KMWorld, as a top Trend Setting Product for 2005. About ClearStory Systems ClearStory Systems is the leader in high-performance, content management solutions for digital media communications. ClearStory software manages the enterprise digital media supply chain -- from creation and collaboration, to lifecycle management and delivery -- to give companies a competitive advantage, marketing agility, cost avoidance, and maximum efficiency. Backed by premier customer support and service, ClearStory award-winning products are easy to use and readily align with our customers' business objectives for both a rapid return-on-investment and low total cost of ownership. Visit us at http://www.clearstorysystems.com/. There are statements in this news release that contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including for example the expected benefits of ClearStory's in-house hosting model, the anticipated customer demand for ClearStory's products and services and the expected benefits to be derived from ClearStory's products and services. These forward-looking statements include all statements that are not statements of historical fact and relate to the intent, belief, plans or expectations of ClearStory Systems, their management, and their customers. Words like "plans," "intends," "believes," "signifies," "estimates," "anticipate," "will," "expect," and words of similar meaning are intended to identify forward-looking statements. Actual results may vary significantly from the forward-looking statements. For a detailed discussion of cautionary statements that may affect ClearStory's future results of operations and financial results, please refer to ClearStory's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-KSB for the year-ended March 31, 2005, and its Quarterly Reports on Form 10-QSB. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. CONTACTS: ClearStory Systems Ripple Effect Communications Susan Worthy Valerie Harding (Media) (508) 870-4225 (617) 536-8887 ClearStory Systems, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) Three Months Ended Six Months Ended September 30, September 30, 2005 2004 2005 2004 Revenue: Product $538 $945 $1,106 $2,170 Services 1,315 1,632 2,882 3,390 1,853 2,577 3,988 5,560 Cost of Revenues: Product 112 63 161 126 Services 698 936 1,466 1,763 810 999 1,627 1,889 Gross profit 1,043 1,578 2,361 3,671 Operating expenses: Sales and marketing 596 717 1,314 1,458 Product development 826 591 1,627 1,203 General and administrative 640 837 1,205 1,451 2,062 2,145 4,146 4,112 Operating loss (1,019) (567) (1,785) (441) Interest expense, net (105) (28) (150) (54) Net loss $(1,124) $(595) $(1,935) $(495) Net loss per share - basic and diluted $(0.22) $(0.12) $(0.39) $(0.13) Weighted average common shares outstanding - basic and diluted 5,992 5,992 5,992 5,992 DATASOURCE: ClearStory Systems, Inc. CONTACT: Susan Worthy of ClearStory Systems, +1-508-870-4225, ; or Valerie Harding of Ripple Effect Communications, +1-617-536-8887, , for ClearStory Systems, Inc. Web site: http://www.clearstorysystems.com/

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