Moldflow Reports Third Fiscal Quarter Results
WAYLAND, Mass.--April 18, 2002--Moldflow Corporation , the world leader in software solutions for optimizing the design and manufacture of plastic products, today announced the results for its third fiscal quarter ended March 30, 2002. Revenue of $9.4 million for the third quarter of fiscal 2002 was up sequentially from the second fiscal quarter by 3% and down 15% from the corresponding quarter of fiscal 2001.Pro forma net income for the third quarter of $612,000, or $0.06 per diluted share, was up sequentially from the second fiscal quarter by 76%. Pro forma net income for the same quarter of the prior year was $1.8 million, or $0.17 per diluted share. Pro forma net income excludes non-cash amortization expense of intangible assets.
The Company's reported net income for the third quarter of fiscal 2002 of $502,000, or $0.05 per diluted share, compared to $1.6 million, or $0.15 per diluted share, during the same quarter of fiscal 2001.
Product revenues for the third quarter of fiscal 2002 were $5.0 million, up sequentially from the second quarter of fiscal 2002 by 2%. Revenues from Manufacturing Solutions products represented 16% of total product revenues, while revenues from Design Solutions products accounted for 84% of total product revenues. Services revenue, primarily comprised of revenues from maintenance and support contracts, increased by 5% sequentially from the second quarter of fiscal 2002 to $4.4 million. On a regional basis, revenues in Europe represented 34% of Moldflow's total revenues for the third quarter of fiscal 2002, while revenues in the North America and Asia Pacific regions each represented 33%.
During the third quarter of fiscal 2002, Moldflow generated $1.4 million in cash from operations and invested $298,000 in capital asset additions. As of March 30, 2002, the Company had $49.3 million in cash and marketable securities and no long-term debt.
The Company had a total of 283 employees at March 30, 2002, of which 43 were sales representatives, 85 were in research and development, and the remainder were employed in sales management, marketing, customer support, and general and administrative functions.
Moldflow's financial results included sales to companies across diverse industries and geographies, including sales to customers in the automotive, medical, electronics, consumer goods, material supplier and molding industries. Orders were received during the quarter from notable customers such as Abbott Laboratories, Boston Scientific, Canon, Corning Diagnostics, Daimler Chrysler, Dow Corning, Electrolux, Emerson Electronics, Fuji, Hella, Hitachi, Intralox, Intersurgical Ltd., Kirby, Nokia, Suzuki Motor Corporation, 3M, Tyco, Ticona, Toyo Roki and Whirlpool Ltd. In total, 122 new customers were added during the quarter.
Marc Dulude, Moldflow's chairman and CEO, said, "Moldflow grew its revenue sequentially, our leading market position remains very strong, and we are not experiencing any additional competitive pressures. However, manufacturing spending remains weak and the production indicators we track show continued downward pressure in the injection molding market. We have remained profitable during the last year because we reduced spending when our visibility did not show a return to historic growth rates. Since the recovery in corporate spending is not developing as quickly as expected, we are taking additional actions to reduce our spending and maintain strong profitability."
Dulude continued, "These actions will include an immediate reduction in our staffing levels of almost 15% and further reductions in our operating costs. We realize this reduction in force may be occurring shortly before a recovery but we do not see sufficient evidence to support this view and we recognize that ensuring profitability during these difficult times is the duty of responsible management. It is our intention to stay focused on the products and services that will benefit the markets we serve both now and well into the future and we are convinced that our product and distribution strategy is correct. We firmly believe a recovery will begin and we are maximizing Moldflow's operating leverage during such a recovery."
Business Outlook
Based on current visibility, Moldflow expects revenues for the fourth fiscal quarter of 2002 to be approximately $9.0 million and to achieve total revenues of approximately $35.8 million for fiscal year 2002. Fiscal fourth quarter pro forma earnings per share, which excludes non-cash amortization expense and non-recurring gains and charges, is expected to be in the range of $0.04 to $0.05.
Management expects that the restructuring actions to be taken in the fourth fiscal quarter will result in a reduction in annual operating expenses of approximately $4.0 million from current operating levels. The Company expects to record a non-recurring charge of up to $1.4 million in the fourth fiscal quarter representing costs in connection with the restructure, including costs related to the reduction in workforce and lease terminations.
Financial Results
The unaudited condensed consolidated financial statements for the third fiscal quarter and the nine-month period ended March 30, 2002 follow.
Information Dissemination
Moldflow webcasts our conference calls to assure the broad dissemination of information in real time and to provide all interested parties access to its quarterly conference call in which management will discuss the third quarter of fiscal year 2002 financial results and future outlook. To access today's conference call, which is scheduled for 5:00 p.m. US Eastern Time log on to the Company's web site at www.moldflow.com. The call will be available in the Presentations section on the Investor Information portion of the site until April 25, 2002.
About Moldflow Corporation
Moldflow is the world's leading provider of software products and services to increase the speed, efficiency, quality and cost savings of the design and manufacture of injection molded plastic products. Companies use Moldflow's complete suite of products to address plastic part design issues at the earliest possible stage as well as to maximize productivity and profitability on the manufacturing floor. Our collaboration with academia, industry and customers around the world has led to a reputation for constant innovation in the complete design-to-manufacture process. Headquartered in Wayland, Massachusetts, Moldflow has offices and research and development centers in the United States, Europe, Australia and the Asia Pacific region. For more information about Moldflow visit www.moldflow.com or call 508-358-5848; fax 508-358-5868.
Note to Editors: Moldflow is a registered trademark of Moldflow Corporation or its subsidiaries worldwide. All other trademarks are properties of their respective holders
Cautionary Statement Regarding Forward-Looking Information
Pursuant to the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, the Company notes that any statements contained in this press release that are not based on historical facts are forward looking statements. Such forward looking statements include those regarding Moldflow's or management's intentions, hopes, beliefs, expectations, projections or plans for the future and include statements regarding: (i) Moldflow's market leadership and competitive position in its market segments, (ii) the Company's proposed restructuring activities and the benefits expected to be derived therefrom, and (iii) the Company's business outlook. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include: (i) with respect to the Company's market leadership and competitive position, the risks that a continued economic downturn will adversely impact the market for the Company's products, that competitors will emerge with greater resources and that our integrated manufacturing solutions products will have a longer sales cycle than our design solutions products, (ii) with respect to the Company's proposed restructuring activities, the risk that the actual restructuring activities may result in a higher restructuring charge, that they will not result in the expected expense reductions and that the Company's overall productivity will be disrupted during the restructuring period, and (iii) with respect to the Company's business outlook, the risks that the weakening economy will further slow capital spending by the Company's prospective customers, that the Company may not be able to recognize the revenue derived from orders received, that foreign currency fluctuations may adversely effect our financial results, that our distribution partners will not achieve their revenue objectives and that the overall mix of revenues differs materially from that projected, as well as other risks and uncertainties detailed from time to time in reports filed by Moldflow with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended June 30, 2001 as well as its subsequent quarterly filings.
Moldflow Corporation
Unaudited Consolidated Statement of Income
(in thousands, except per share data)
Three Months Ended Nine Months Ended
March March March March
30, 31, 30, 31,
2002 2001 2002 2001
Revenue:
Software licenses $5,003 $7,220 $13,933 $19,170
Services 4,442 3,874 12,852 11,166
Total revenue 9,445 11,094 26,785 30,336
Costs and expenses:
Cost of software licenses revenue 605 418 1,911 1,179
Cost of services revenue 346 343 989 1,082
Research and development 1,765 1,586 4,594 4,765
Selling and marketing 4,651 5,245 13,858 14,186
General and administrative 1,630 1,604 5,046 4,679
Amortization of intangible assets 164 380 492 1,139
Total operating expenses 9,161 9,576 26,890 27,030
Income (loss) from operations 284 1,518 (105) 3,306
Interest income, net 288 629 1,143 1,589
Other income, net 178 78 1,395 140
Income before income taxes 750 2,225 2,433 5,035
Provision for income taxes 248 674 804 1,661
Net income $502 $1,551 $1,629 $3,374
Net income per common share:
Basic $0.05 $0.16 $0.16 $0.35
Diluted $0.05 $0.15 $0.16 $0.34
Weighted average shares:
Basic 10,077 10,012 10,072 9,523
Diluted 10,403 10,495 10,360 10,033
Moldflow Corporation
Pro Forma Results
(in thousands, except per share data)
Income (loss) from operations
as reported $284 $1,518 $(105) $3,306
Add: amortization of
intangible assets 164 380 492 1,139
Pro forma income from operations $448 $1,898 $387 $4,445
Net income as reported $502 $1,551 $1,629 $3,374
Add: amortization of intangible
assets, net of taxes 110 265 329 762
Less: gain from sale of
investment, net of taxes -- -- (337) --
gain from sales of assets,
net of taxes -- -- (419) --
Pro forma net income $612 $1,816 $1,202 $4,136
Pro forma net income per common
share - diluted $0.06 $0.17 $0.12 $0.41
Weighted average shares - diluted 10,403 10,495 10,360 10,033
Moldflow Corporation
Unaudited Condensed Consolidated Balance Sheet
(in thousands)
March 30, June 30,
2002 2001
Assets
Current assets:
Cash and cash equivalents $ 49,305 $ 32,969
Marketable securities -- 12,750
Accounts receivable, net 6,919 7,241
Prepaid expenses and other current assets 3,474 3,309
Total current assets 59,698 56,269
Fixed assets, net 4,094 4,027
Goodwill and other intangibles assets, net 10,325 10,817
Other assets 570 342
Total assets $ 74,687 $ 71,455
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,641 $ 1,040
Accrued expenses 6,392 6,346
Deferred revenue 7,261 6,372
Total current liabilities 15,294 13,758
Long-term liabilities 131 104
Total liabilities 15,425 13,862
Stockholders' equity:
Common stock 101 101
Additional paid-in capital 62,701 62,442
Treasury stock (327) --
Accumulated deficit (3,123) (4,752)
Accumulated other comprehensive income (loss) (90) (198)
Total stockholders' equity 59,262 57,593
Total liabilities and stockholders' equity $ 74,687 $ 71,455