SDRC Sees Third Quarter Revenues and Earnings Below Expectations
6 October 2000
SDRC Sees Third Quarter Revenues and Earnings Below Expectations
CINCINNATI--Oct. 5, 2000--SDRC , a global supplier of e-business collaboration solutions for the product lifecycle, today announced that September quarter 2000 revenues and earnings will be less than analysts' consensus estimates. SDRC estimates that its third quarter revenues will be approximately $105 million, substantially below expectations. Bottom line results are expected to be about breakeven. A complete earnings report will be released on October 23.Total revenue from SDRC's market leading Metaphase product data management software and other e-business software operations exceeded $39 million and grew compared to last year's third quarter, while total revenue from SDRC's design operations was lower than the previous year.
Year-to-date total revenues are expected to be about even with the same period last year, with total Metaphase and related revenues up about 15% and total I-DEAS and related design revenues down about 5%. SDRC won several major Metaphase contracts in the quarter from Rolls-Royce, Knorr-Bremse, Renault, Motorola, AB Sandvik Coromant, Khrunichev Space Center, and Briggs & Stratton, among others.
"We are very disappointed with our sales execution this quarter and are taking corrective action to improve our revenue visibility," stated SDRC's Chairman and CEO, William J. Weyand. "In light of these developments, we will also freeze hiring going forward except in strategically critical areas.
"We remain optimistic about the direction and growth potential of our Metaphase product line and our major e-business initiatives. While numerous major revenue opportunities were deferred to later quarters, we have not lost any major orders to competition this quarter. This industry difficulty of accurately predicting the timing of major client funding decisions contributed to our lack of revenue visibility this quarter. Our shortfall resulted from large customer order funding approval delays as well as a drop in North American transactions as the economy and capital spending in several industries appeared to temporarily cool down. The fourth quarter, however, is beginning with a solid start including commitments from Ford, Land Rover, and Matra BAe Dynamics.
"We are aggressively addressing the pace of e-technology change and the need to move our industry leadership position ahead on multiple fronts concurrently. As we re-engineer ourselves for e-business, we will complement our distribution model with strategic alliances. Our product investment plans and commitments remain strong in order to ensure a favorable long-term outcome as a major player in e-business for collaborative product commerce. Major investments in product knowledge management and collaborative technologies should leapfrog competitive offerings."