SDRC Reports First Quarter EPS of $0.12; Revenues of $108 Million
19 April 2000
SDRC Reports First Quarter EPS of $0.12; Revenues of $108 Million
CINCINNATI--April 19, 2000--SDRC (Nasdaq:SDRC), a global supplier of e-business collaboration solutions for the product lifecycle, today announced its results for the first quarter ended March 31, 2000. Revenues totaled $108.2 million, about even with last year's $108.1 million. Net income was $4.3 million, or $0.12 per average diluted share outstanding, compared to $10.0 million, or $0.27 per share, for the same period last year. This quarter's results include a charge of $1.4 million, or $0.02 per share, in connection with the divestiture of SDRC's Advanced Test & Analysis operations in San Diego, CA."Even though our financial results are not yet satisfactory, we are pleased with the progress we've made expanding our sales order pipeline," stated Bill Weyand, chairman, president, and CEO. "Asian operations posted their best revenue quarter ever, while our sales force transition to a major accounts focus is gaining momentum in all our markets. Our partnership for competitive excellence program, known as SPACE(TM), generated nine new contracts this quarter compared to three in the same quarter last year. In each instance, SDRC and the partner customer make contractual commitments to meet certain performance objectives and purchases over a three to five year timeframe. We look forward to improving our financial results in the second half of this year."
"During the quarter, we announced several exciting new business-to-business initiatives and products focused around our e-business strategy," continued Mr. Weyand. "A centerpiece of this strategy is Accelis(TM). Accelis is a new product built on industry accepted standards, such as Java 2 Enterprise Edition and XML, that accesses legacy data and ties together all the disparate systems commonly found in an extended enterprise. SDRC has teamed with IBM to deliver the first Accelis release on IBM(R)'s WebSphere(TM) product, recognized as the leading e-business platform for enterprise application integration. Our initial pilot projects are being very well received by customers, and we look forward to shipping the product in July."
Other e-business initiatives announced in the quarter included:
-- I-DEAS(R) 8 - a highly-scalable, web-based 3D design
solution with enhanced collaboration features such as I-DEAS
Web Access and I-DEAS 3dDocCom(TM).
-- Metaphase(R) Digital Dashboard - a Microsoft(R) Outlook(R)
interface and single-click access to the Metaphase data
structure that requires no client-side installation of PDM
software.
-- MDcyberCAD.com - a next generation, on-line catalog of over
680,000 2D and 3D components for designers and engineers
through a partnership with Sun Microsystems, Machine Design
magazine and PARTsolutions.
-- EngineeringOnTap.com - a "pay-as-you-go" portal to
best-in-class engineering and analysis applications through
a partnership with Hewlett-Packard and several leading CAE
solution providers.
-- e-Business initiative with CoCreate, a division of
Hewlett-Packard -- the integration of Metaphase and
CoCreate's OneSpace to enable real-time collaboration on 3D
CAD models generated from disparate CAD systems over the
web.
Mr. Weyand continued, "Earlier this year, SDRC acquired Sherpa Systems Inc. with an installed base of 90,000 PDM users. To assist in supporting SDRC's migration of former Sherpa customers to Metaphase(R) over the next 12-24 months, SDRC will announce, next week, a partnership agreement with a highly-regarded, global provider of software and systems integration services. Together, our two organizations will provide a best-in-class combination of software and services to our customers. These commitments validate our original objectives in the Sherpa acquisition and reinforce our previously stated strategy of expanding our leadership position in the Product Knowledge Management market."
SDRC will hold a conference call at 5:00 P.M. Eastern Time today. The dial-in number is 712/271-3883 and the pass code is "SDRC." A replay of the call will be available until 5:00 P.M. on Monday, April 24, by dialing 888/282-0034 or 402/998-0517.
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
(Unaudited)
(in thousands, except per share data)
Three Months Ended March 31,
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2000 1999
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Revenue:
Licenses $ 38,770 $ 45,842
Maintenance and services 69,430 62,287
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Total revenue 108,200 108,129
Cost of revenue 50,021 42,210
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Gross profit 58,179 65,919
Operating expenses:
Selling and marketing 27,951 30,850
Research and development 19,140 15,699
General and administrative 4,747 4,927
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Total operating expenses 51,838 51,476
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Operating income 6,341 14,443
Other income 712 1,461
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Income before income taxes 7,053 15,904
Income tax expense 2,714 5,885
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Net income $ 4,339 $ 10,019
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Net income per diluted share $ .12 $ .27
Common and common equivalent shares 36,693 37,548
CONSOLIDATED BALANCE SHEET
(in thousands)
March 31, December 31,
2000 1999
-------- --------
(unaudited)
Assets:
Cash and cash equivalents $123,290 $121,507
Marketable securities 13,997 12,003
Trade accounts receivable 113,515 91,288
Other accounts receivable 6,419 7,779
Prepaid expenses 12,390 10,442
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Total current assets 269,611 243,019
Marketable securities 14,083 11,174
Property and equipment, net 24,693 23,601
Marketable software costs, net 63,078 60,832
Goodwill and other intangibles 51,186 42,164
Other assets 7,930 7,759
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Total assets $430,581 $388,549
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Liabilities and shareholders' equity:
Current liabilities $165,178 $129,947
Other long-term liabilities 8,779 8,685
Shareholders' equity 256,624 249,917
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Total liabilities and
shareholders' equity $430,581 $388,549
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About SDRC
SDRC (Structural Dynamics Research Corporation) is a global provider of e-business collaboration solutions for the product lifecycle. The Company's products address the areas of Product Knowledge Management, Collaborative Product Commerce, and e-Design Automation. Coupled with process engineering and consulting services, the Company's solutions facilitate innovation through collaboration, enabling industry leaders to optimize product development early in the design process, increase productivity, 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. www.sdrc.com
Note to Editors: SDRC, I-DEAS, and Metaphase are registered trademarks, and Accelis, 3dDocCom and SPACE are trademarks of Structural Dynamics Research Corporation. All other trademarks or registered trademarks belong to their respective holders.