SDRC Reports $109 Million in Revenues
20 October 1999
SDRC Reports $109 Million in Revenues; EPS $0.07; Two Acquisitions Completed in the Quarter
CINCINNATI--Oct. 20, 1999--SDRC , a leading global supplier of enterprise product development solutions and developer of I-DEAS(R) and Metaphase(R) Enterprise(TM) product data management (PDM) software, today reported revenues totaling $108.9 million for the quarter ending September 30, 1999, a 7% increase over the same quarter last year. Results included a 24% increase in total Metaphase revenues, and a 21% improvement in European revenues. Net income was $2.5 million, or $0.07 per average common share outstanding, after charges for the write-off of in-process research and development costs related to the purchases of TD Technologies, Inc. and Enterprise Software Products Inc. Net income for the same period last year was $10.3 million, or $0.28 per average common share.For the nine months ended September 30, 1999, SDRC's revenue was $328.1 million, up 14% compared to the first nine months of 1998. Year-to-date Metaphase revenues increased 25%, while I-DEAS revenues grew 11%. Net income was $23.3 million, or $0.62 per average common share (after in-process research and development charges) compared to $25.8 million, or $0.67 per average common share, for the same period last year.
"Our third quarter results, while disappointing, reflect an evolution of our solutions-oriented business model," stated Bill Weyand, SDRC's chairman, president and CEO. Mr. Weyand continued, "SDRC is aggressively adopting a new sales and marketing philosophy called SPACE(TM) which stands for SDRC Partnership for Competitive Excellence. This strategic initiative coincides with our market's transition as the world's leading manufacturers are making core changes to their software tools and process methodologies. We define this change as supply chain collaboration, and SDRC is positioning itself to take full advantage of this shift."
"Our SPACE initiative was introduced to our North American group in the third quarter. As SDRC deploys the SPACE initiative worldwide over the next 2- 3 quarters, we anticipate a modest disruption to our revenue growth. In addition, we are expanding the Metaphase applications footprint to penetrate new markets, both vertically and horizontally. Among the new products is Metaphase Team(TM), to be shipped in the first half of next year, which offers the proven, web-centric scalability of Metaphase Enterprise in a midrange package that can be deployed in 90 days. We believe that the long term implications of these decisions will be significantly positive for SDRC, our customers and shareholders," commented Mr. Weyand.
Highlights in the quarter included the Metaphase Symposium which drew the largest audience of PDM users in the world, the acquisitions of TD Technologies, Inc. and Enterprise Software Products Inc., and two new Metaphase applications. Metaphase Change Management(TM) is the first in a series of Metaphase Control Solutions(TM), and Metaphase Catalog(TM) is a parts catalog application developed in partnership with Aspect Development Inc.
SDRC will hold a conference call at 5:00 P.M. Eastern Time today. The dial-in number is 630/395-0017 and the pass code is "SDRC". A replay of the call will be available until Tuesday, October 26 by dialing 800/327-0518 or 402/220-0185.
Except for historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties which could cause the actual results to differ materially from those projected, including the timely availability and acceptance of new products, global economic uncertainties, the impact of competitive products and pricing, the management of growth, and other risks detailed from time to time in the Company's most recent reports on Forms 10-K and 10-Q.
About SDRC
SDRC (Structural Dynamics Research Corporation) is one of the world's leading providers of enterprise product development solutions with its suite of mechanical design automation software and product data management software. The Company's products, coupled with engineering and consulting services, help manufacturers optimize product development early in the design process, enabling them to reduce cost and cycle time while significantly improving quality and time to market. SDRC provides the award-winning I-DEAS(R) product suite of integrated CAD/CAM/CAE software, and the market-leading PDM software, Metaphase(R) Enterprise(TM), which is developed, marketed and supported by SDRC's Metaphase Technology Division. SDRC employs more than 2,500 people worldwide, with 77 offices in 18 countries throughout North America, Europe, and Asia/Pacific.
SDRC
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1999 1998 1999 1998
-------- -------- -------- --------
Revenue:
Licenses $ 42,416 $ 43,886 $135,208 $123,315
Maintenance and services 66,491 57,933 192,881 164,758
-------- -------- -------- --------
Total revenue 108,907 101,819 328,089 288,073
Cost of revenue 51,539 40,613 138,722 114,043
-------- -------- -------- --------
Gross profit 57,368 61,206 189,367 174,030
Operating expenses:
Selling and marketing 30,505 29,146 91,203 84,649
Research and development 16,965 16,164 49,370 49,381
General and administrative 4,424 4,503 13,730 13,186
In-process research and
development 2,350 -- 2,350 --
-------- -------- -------- --------
Total operating
expenses 54,244 49,813 156,653 147,216
-------- -------- -------- --------
Operating income 3,124 11,393 32,714 26,814
Other income 1,464 4,144 4,899 10,830
-------- -------- -------- --------
Income before income taxes 4,588 15,537 37,613 37,644
Income tax expense 2,051 5,199 14,271 11,865
-------- -------- -------- --------
Net income $ 2,537 $ 10,338 $ 23,342 $ 25,779
-------- -------- -------- --------
-------- -------- -------- --------
Net income per share $ .07 $ .28 $ .62 $ .67
Common and common equivalent
shares 37,469 37,226 37,578 38,404
SDRC
CONSOLIDATED BALANCE SHEET
(in thousands)
September 30, December 31,
1999 1998
------------ ------------
(Unaudited)
Assets:
Cash and cash equivalents $123,296 $100,581
Marketable securities 11,453 11,787
Trade accounts receivable 87,693 92,169
Other accounts receivable 6,888 8,956
Prepaid expenses 8,562 12,102
-------- --------
Total current assets 237,892 225,595
Marketable securities 16,220 9,937
Property and equipment, net 24,191 25,674
Marketable software costs, net 58,536 36,237
Goodwill and other intangibles 43,843 32,886
Other assets 8,895 10,425
-------- --------
Total assets $389,577 $340,754
-------- --------
-------- --------
Liabilities and shareholders' equity:
Current liabilities $129,027 $117,108
Other long-term liabilities 8,341 7,872
Shareholders' equity 252,209 215,774
-------- --------
Total liabilities and
shareholders' equity $389,577 $340,754
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http://www.metaphasetech.com/
http://www.sdrc.com/
Note to Editors: SDRC, I-DEAS, and Metaphase are registered
trademarks, and Metaphase Enterprise, Metaphase Team, Metaphase
Control Solutions and Metaphase Change Management are trademarks of
Structural Dynamics Research Corporation. All other trademarks or
registered trademarks belong to their respective holders.