Tecnomatix Announces Third Quarter 2004 Results
* Record quarterly revenues with year-over-year growth of 26%
* Net income increased to $0.05 per diluted share compared to a net loss of $(0.43) in same period of 2003
HERZLIA, Israel, Oct. 27 -- Tecnomatix Technologies Ltd. , the driving force in Manufacturing Process Management (MPM), today announced its financial results for the third quarter ended September 30, 2004.
Revenue for the third quarter of 2004 was $25.5 million, compared to $20.3 million for the third quarter of 2003, an increase of 26%. Operating income for the third quarter of 2004 was $0.7 million, compared to an operating loss of $(4.5) million for the third quarter of 2003 which included the special charges of $4.4 million associated with the USDATA acquisition. Net income for the third quarter of 2004 was $0.6 million or $0.05 per diluted share, compared to a net loss of $(4.7) million or $(0.43) per diluted share for the third quarter of 2003.
Revenue for the nine months ended September 30, 2004 were $73.5 million, compared to $61.1 million for the same period of 2003, an increase of 20%. Operating income for the first nine months of 2004 was $1.7 million, compared to an operating loss of $(6.3) million for the first nine months of 2003 which included special charges of $5.9 million associated with restructuring and the USDATA acquisition. Net income for the first nine months of 2004 was $1.3 million or $0.10 per diluted share, compared to a net loss of $(5.9) million or $(0.55) per diluted share for the same period of 2003.
As of September 30, 2004, the Company had a balance of $38.7 million in cash and cash equivalents, short-term investments and long-term investments, compared to $38.0 million as of June 30, 2004.
"We continue to make significant progress with our strategic and financial goals," said Jaron Lotan, president and chief executive officer of Tecnomatix Technologies. "For the third quarter of 2004, we achieved record revenue with growth of 26% year-over-year and we increased our operating and net profits. In addition, we continue to report positive cash flow from operating activities. These results are mainly attributable to the continued deployment of our MPM enterprise solutions across a range of vertical markets.
"During the quarter, we enjoyed year-over-year growth across all territories, which was mainly driven by our Mechanical division. Automotive OEMs like Audi, BMW, Ford, GM/Opel, PSA and Volkswagen further expanded their eMPower Enterprise deployments and Renault F1 placed an initial order for our eMPower solution.
"We are particularly pleased with our success in the Tier 1 automotive supplier industry. This $500 billion dollar industry, which manufacturers all the major components of a car, presents a major growth opportunity for Tecnomatix. This quarter, two U.S. companies, Visteon and Intier, placed initial orders for our MPM Enterprise solution, joining our impressive customer base of more than twenty of the world's top Tier-1 suppliers.
"Outside of the automotive industry, demand for our standalone engineering products is particularly strong. Among the companies placing orders in the third quarter were Fanuc, a leading robot manufacturer, Fiat Avio, an Italian aerospace company, Atomic Energy of Canada (AECL), John Deere and Westinghouse.
"We continue to gain traction in China and Taiwan, which is driving increased market penetration through new and repeat orders. This quarter, several automotive customers progressed with their implementation of eMPower Enterprise solutions including Shanghai Automotive Industry Corporation (SAIC), China's largest car producer, and Yulon Motor Company, a Taiwanese car manufacturer. We are also seeing increased adoption of MPM by the Chinese electronics industry, with companies like Inventec, Siemens Shanghai Mobile Communications and UMC placing orders for our eMPower for Electronics solution.
"Our partnership with UGS is progressing well; our technical teams are working together at several major customer sites and, this quarter, we delivered a new version of the Teamcenter and eMPower integrated product.
"In summary, this has been a productive quarter for Tecnomatix, exhibiting important gains in a range of vertical markets with initial and repeat orders for our eMPower Enterprise solution and for our standalone engineering products," continued Lotan. "Our customers continue to report significant productivity improvements and returns on their investments. We are on track with our ongoing objectives to deliver real value to our customers as well as continued financial growth and increased profitability."
<About Tecnomatix Technologies and eMPower
Tecnomatix Technologies Ltd. is the driving force in Manufacturing Process Management (MPM). Today's leading global manufacturers are adopting MPM solutions to expand revenue potential and reduce costs by accelerating product introductions, shortening time to volume, and optimizing production execution. eMPower enables our customers to succeed with its collaborative, open platform and applications for defining, simulating, managing, and executing manufacturing processes across the extended enterprise. For more information on eMPower products and solutions for MPM, please visit http://www.tecnomatix.com/.
TECNOMATIX TECHNOLOGIES LTD.
Condensed Consolidated Statements of Operations
U.S. $ in thousands, except
per share data Nine months ended Three months ended
9/30/2004 9/30/2003 9/30/2004 9/30/2003
Revenues
Software license fees 29,694 24,139 10,944 7,925
Services 43,833 36,918 14,540 12,378
Total revenues 73,527 61,057 25,484 20,303
Costs and expenses
Software license fees 5,898 6,254 2,331 1,983
Services 14,879 10,910 5,277 3,562
Amortization of acquired
intangibles 438 23 143 23
Research and development, net 12,025 10,671 4,015 3,249
Selling and marketing 35,092 29,977 11,795 10,515
General and administrative 3,539 3,623 1,222 1,055
Restructuring costs and
asset impairment - 1,487
In-process R&D and
acquisition related costs - 4,410 - 4,410
Total costs and expenses 71,871 67,355 24,783 24,797
Operating income (loss) 1,656 (6,298) 701 (4,494)
Financial income
(expenses), net (91) 476 (19) (122)
Income (loss) before taxes
on income 1,565 (5,822) 682 (4,616)
Provision for income taxes (246) (41) (99) (40)
Income (loss) after taxes
on income 1,319 (5,863) 583 (4,656)
Equity share in net income
(loss) of affiliate company (53) (74) 2 (25)
Net income (loss) 1,266 (5,937) 585 (4,681)
Basic earnings (loss) per
share:
Net income (loss) 0.10 (0.55) 0.05 (0.43)
Diluted earnings (loss)
per share:
Net income (loss) 0.10 (0.55) 0.05 (0.43)
Weighted average number of
shares outstanding:
Basic 12,062,771 10,761,537 11,988,125 10,929,256
Diluted 12,913,129 10,761,537 12,816,934 10,929,256
TECNOMATIX TECHNOLOGIES LTD.
Condensed Consolidated Balance Sheets
U.S. $ in thousands
9/30/2004 12/31/2003
Current Assets:
Cash and cash equivalents 11,942 9,232
Short-term investments 23 70
Accounts receivable:
Trade 26,186 29,190
Related parties 400 -
Other and prepaid expenses 5,160 5,747
Total current assets 43,711 44,239
Non-current receivables 1,241 1,108
Long-term investments:
Bonds 26,624 24,267
Zuken Tecnomatix 208 289
Total long-term investments 26,832 24,556
Property and equipment, net 4,444 5,628
Goodwill, net 25,496 25,829
Acquired intangibles, net 2,006 2,444
Other assets, net 13,296 13,296
Total assets 117,026 117,100
Current Liabilities:
Current maturities of long-term loans 3,333 833
Accounts payable:
Trade 2,546 4,644
Deferred revenue 8,470 7,130
Other and accrued expenses 16,895 19,163
Total current liabilities 31,244 31,770
Long-term liabilities:
Accrued restructuring expense 2,829 1,716
Long-term loan from bank 21,667 24,167
Accrued severance pay, net 969 1,095
Total long-term liabilities 25,465 26,978
Shareholders' equity 60,317 58,352
Total liabilities and shareholders' equity 117,026 117,100