SDRC Reports 10% Revenue Growth for 1999 -- European Business Up 18%
1 February 2000
SDRC Reports 10% Revenue Growth for 1999 -- European Business Up 18%
CINCINNATI--Jan. 31, 2000--SDRC , a leading global supplier of internet-enabled collaborative product development solutions, today reported revenues totaling $114.1 million for the quarter ending December 31, 1999, about even with the same quarter last year and in line with analysts' expectations. Net income was $4.6 million, or $0.13 per average diluted share outstanding.For the year ended December 31, 1999, SDRC's revenue was $442.2 million, up 10% compared to 1998. Net income was $28.0 million, or $0.75 per average common share, compared to $35.7 million, or $0.93 per average common share, for last year.
"Our 10% growth in 1999, including an 8% increase in design automation revenue, easily outpaced the largest companies in our market," said Bill Weyand, chairman, president and CEO of SDRC. "While we are not pleased with either our earnings or revenue growth in 1999, we continued to invest heavily in both our product development and in growing our ExperTeam services capability. We accomplished a significant number of key objectives in 1999 that support SDRC's long-term strategy of sustaining our traditional design automation business, leading the PDM market and moving aggressively into the world of global e-Business."
SDRC achieved several strategic milestones in 1999 that support its business objectives and the evolution to an internet-enabled collaborative product development solution provider. The Company successfully integrated two strategic acquisitions (TD Technologies and Enterprise Software Products) that expanded its offerings in the areas of requirements driven design and CAD neutral, Windows-native finite element modeling. SDRC launched I-DEAS(R) 7 which featured I-DEAS Web Access, variational analysis and generative machining.
In the area of product data management, SDRC introduced four new software applications (MetaSTEP(TM), MetaCatalog(TM), Metaphase(R) Change Management and Metaphase Storage Management) and a new version of Metaphase Enterprise(TM) in December. In addition, SDRC completed the acquisition of Sherpa Systems in January 2000 to become the dominant supplier of PDM solutions with an estimated 40% market share and over 340,000 production users worldwide. According to IDC, "The acquisition positions SDRC well for further inroads into the supply chain and eCommerce markets." Separately, over 800 attendees participated in the semi-annual Metaphase Symposium last September, making this conference the largest of its kind worldwide.
The Sherpa acquisition was additionally beneficial for the advanced XML technology it bought from Inso France Development. According to a recent IDC report, the "... acquisition of XML technology and expertise by SDRC should allow the company to stay on top of the standards development and be an early implementer of new PDM internet standards. XML will be a key technology for the introduction of product data into logistics supply chains in applications such as order management, repair and maintenance."
SDRC completed the restructuring of its sales organization from a geographically-denominated, product approach to a global account, multi-product and service-intensive system. In the first year following its global introduction, the SDRC Partnership for Competitive Excellence (SPACE(TM)) added 42 new strategic partnership accounts. In the fourth quarter, SDRC expanded its existing relationships with Daimler/Chrysler, Renault, Ericsson and Seagate, and initiated new relationships with Advanced Energy, Viessmann and DENSO.
"We at SDRC are excited about the year ahead of us," said Weyand. "Our April release of I-DEAS 8 will bring together our Artisan and Master Series architectures to create a fully-scalable offering that allows design collaboration between mid-range and high-end users with native Windows graphics support. And though our customers have already successfully been using SDRC internet-enabled applications to meet their global design and data management requirements, we will be expanding our presence in the web-based world of collaborative product commerce and product knowledge management with several initiatives to be announced in the coming weeks."
SDRC will hold a conference call at 5:00 P.M. Eastern Time today. The dial-in number is 773/756-4854 and the pass code is "SDRC." A replay of the call will be available until 5:00 P.M. on Wednesday, February 2, by dialing 800/333-1809 or 402/220-0202.
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.
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
----------------- -----------------
(Unaudited)
1999 1998 1999 1998
-------- -------- -------- --------
Revenue:
Licenses $ 43,271 $ 51,822 $178,479 $175,137
Maintenance and services 70,863 63,130 263,744 227,888
-------- -------- -------- --------
Total revenue 114,134 114,952 442,223 403,025
Cost of revenue 50,814 41,893 189,536 155,936
-------- -------- -------- --------
Gross profit 63,320 73,059 252,687 247,089
Operating expenses:
Selling and marketing 34,468 34,555 125,671 119,204
Research and development 18,404 14,802 67,774 64,182
General and administrative 4,689 4,851 18,419 18,038
Purchased in-process research
and development 0 3,230 2,350 3,230
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Total operating
expenses 57,561 57,438 214,214 204,654
-------- -------- -------- --------
Operating income 5,759 15,621 38,473 42,435
Other income 1,626 1,957 6,525 12,788
-------- -------- -------- --------
Income before income taxes 7,385 17,578 44,998 55,223
Income tax expense 2,768 7,685 17,039 19,551
-------- -------- -------- --------
Net income $ 4,617 $ 9,893 $ 27,959 $ 35,672
-------- -------- -------- --------
-------- -------- -------- --------
Net income per diluted share $ .13 $ .26 $ .75 $ .93
Common and common equivalent
shares 35,967 37,545 37,281 38,290
CONSOLIDATED BALANCE SHEET
(in thousands)
December 31,
1999 1998
-------- --------
Assets:
Cash and cash equivalents $121,507 $100,581
Marketable securities 12,003 11,787
Trade accounts receivable 91,288 92,169
Other accounts receivable 7,779 8,956
Prepaid expenses 10,442 12,102
-------- --------
Total current assets 243,019 225,595
Marketable securities 11,174 9,937
Property and equipment, net 23,601 25,674
Marketable software costs, net 60,832 36,237
Goodwill and other intangibles 42,164 32,886
Other assets 7,759 10,425
-------- --------
Total assets $388,549 $340,754
-------- --------
-------- --------
Liabilities and shareholders' equity:
Current liabilities $129,947 $117,108
Other long-term liabilities 8,685 7,872
Shareholders' equity 249,917 215,774
-------- --------
Total liabilities and
shareholders' equity $388,549 $340,754
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About SDRC
SDRC (Structural Dynamics Research Corporation) is a leading global provider of internet-enabled collaborative product development solutions through its Metaphase Enterprise product data management software and I-DEAS mechanical design automation software. The Company's products, coupled with process engineering and consulting services, create an e-Business environment that enables industry leaders to optimize product development early in the design process, accelerate product innovation, and significantly improve time-to-market. SDRC employs more than 2,500 people worldwide, with 77 offices in 18 countries throughout North America, Europe, and Asia/Pacific.
http://www.sdrc.com/
Note to Editors: SDRC, I-DEAS, and Metaphase are registered trademarks, and Metaphase Enterprise, MetaSTEP, MetaCatalog and SPACE are trademarks of Structural Dynamics Research Corporation. All other trademarks or registered trademarks belong to their respective holders.