EXHIBIT 99.4
PRESS RELEASE
FOR IMMEDIATE RELEASE
For further information, contact:
Terry Rixford Fletcher Chamberlin
Vice President, Finance and Administration Investor Relations
Analogy, Inc. Harris Massey Herinckx
(503) 626-9700 (503) 973-9226
ANALOGY REPORTS RESULTS FOR 1998 FISCAL FOURTH QUARTER AND FULL YEAR AND
RESTATES FIRST AND SECOND FISCAL QUARTERS
Beaverton, Oregon - May 12, 1998 - Analogy, Inc. (NASDAQ:ANLG) today announced
its financial results for the fourth fiscal quarter and full year ended March
31, 1998.
Total revenue for the fourth quarter of fiscal 1998 was $5,990,000,
compared with revenue of $7,169,000 in the fourth quarter of fiscal 1997.
Product license revenue decreased from $4,514,000 to $3,546,000, and service and
other revenue decreased from $2,655,000 to $2,444,000. The company reported a
net loss for the fourth quarter of $2,813,000 or $0.30 per share compared to net
income of $275,000 or $.03 per share for the same quarter a year ago. These
results for the quarter are in line with the company's preliminary announcement
of quarterly results on April 14.
For all of fiscal 1998, the company reported total revenue of $25,790,000,
or 8% above revenue of $23,960,000 reported for fiscal 1997. Product license
revenue for the latest year was $14,278,000, compared with $14,501,000 in fiscal
1997. Service and other revenue for fiscal 1998 was $11,512,000, compared with
$9,459,000 in the prior year. The net loss for the 1998 fiscal year was
$3,354,000 or $0.37 per share, compared with a net loss of $3,041,000 or $0.35
per share in fiscal 1997. Included in the net loss for fiscal 1997 was a
non-recurring charge of $1,896,000 for in-process research and development
expenses associated with the acquisition of Symmetry Design Systems which was
purchased in December 1996.
The full year results reported today include restated results for the
company's first and second fiscal quarters ended June 30, 1997 and September 30,
1997, respectively. First quarter revenue has been restated to $5,212,000 from
$5,986,000 and the first quarter loss has been restated from $410,000 or $0.04
per share to $943,000 or $0.10 per share. Second quarter revenue has been
restated to $6,742,000 from $7,142,000 and the second quarter profit has been
restated to $55,000 or $0.01 per share from $317,000 or $0.03 per share. These
adjustments relate to single orders received in each of the first two quarters
from one of the company's resellers. Upon review at year-end with the company's
auditors it has been determined that these transactions should more
appropriately be recognized as revenue at the time the product is sold to the
ultimate end user rather than when it is sold to the reseller.
"We regret having to make these adjustments to our previously announced
results but we want to emphasize that these adjustments relate wholly to two
separate orders received from one reseller who specializes in dealing with
federal government procurement. We still hope to recognize the revenue
associated with these orders in the current fiscal year ending March 31, 1999,"
said Gary Arnold, chairman and president of Analogy.
Effective May 1, 1998 Chris Brigden has been named Senior Vice President
Sales and Marketing of Analogy. Chris is a 20-year veteran of the computer and
EDA industries and over the past seven years
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has been very successful in growing the company's European operations. He
replaces Doug Johnson, who has left the company.
Mr. Arnold further commented, "As we said when we made our preliminary
announcement in April, we are very disappointed in the latest quarter's
results. Our business is dependent on large orders with major customers, and
when a small number of expected sales do not occur as planned, our income is
severely affected. We continue to believe the long-run demand for mixed
signal and mixed-technology simulation is substantial, and the potential for
our business is promising."
This press release may contain forward-looking statements which are made
pursuant to the safe harbor provisions of the Private Securities Litigation Act
of 1995. The forward looking statements involve risks and uncertainties that
could cause actual results to differ materially from the forward-looking
statements, including, without limitation, increased adoption of behavioral
modeling design methodologies for mixed-signal and mixed-technology systems
design, company's ongoing ability to introduce new products and expand its
markets, seasonal fluctuations in the company's order pattern including the
timing of significant orders, competitive initiatives, the company's inability
to predict the timing of sell-through orders to resellers and the company's lack
of control over the sell-through, the lengthy sales cycle and that a significant
percentage of orders that are not received by the company until near the end of
the quarter. Risks and uncertainties regarding the company's future business
prospects are highlighted in the company's reports on Form 10-K and Form 10-Q on
file with the SEC. Anyone wishing copies of these SEC reports may contact Terry
Rixford, Analogy, Inc., 9205 SW Gemini Drive, Beaverton, OR. 97008, (503)
626-9700.
Analogy, Inc. is a world leader in the development of high-performance
design and analysis software and model libraries for the design of mixed-signal
and mixed-technology systems. The company's products are used in the aerospace,
automotive/transportation, semiconductor, telecommunications, computer
peripherals, medical and industrial control industries. Analogy has offices and
support staff throughout the United States, Europe and Asia and is headquartered
in Beaverton, Oregon. For on-line information, visit the company's web site at:
http//www.analogy.com.
(tables follow)
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ANALOGY, INC.
Consolidated Income Statement
(audited)
(000, except per share data)
Quarter Ended Year Ended
------------------- ---------------------
3/31/98 3/31/97 3/31/98 3/31/97
------- ------- -------- --------
Product license revenue $ 3,546 $ 4,514 $ 14,278 $ 14,501
Service and other 2,444 2,655 11,512 9,459
------- ------- -------- --------
Total revenue 5,990 7,169 25,790 23,960
Cost of product license revenue 432 492 1,776 1,652
Cost of service and other revenue 628 562 2,833 2,202
------- ------- -------- --------
Total cost of revenue 1,060 1,054 4,609 3,854
Gross profit 4,930 6,115 21,181 20,106
Research and development 1,970 1,280 6,260 5,413
Sales and marketing 4,387 3,584 14,559 12,622
General and administrative 836 787 2,987 2,728
Amortization of intangibles 92 91 368 136
Acquired in-process research and
development - - - 1,896
------- ------- -------- --------
Total operating expenses 7,285 5,742 24,174 22,795
------- ------- -------- --------
Operating income (loss) (2,355) 373 (2,993) (2,689)
Other income (expense), net (3) 18 (86) (11)
------- ------- -------- --------
Income (loss) before income tax (2,358) 391 (3,079) (2,700)
Income tax expense 455 116 275 341
------- ------- -------- --------
Net income (loss) $ (2,813) $ 275 $ (3,354) $ (3,041)
------- ------- -------- --------
------- ------- -------- --------
Net income (loss) per share - basic
and diluted $ (0.30) $ 0.03 $ (0.37) $ (0.35)
Weighted average shares outstanding-
Basic 9,261 9,053 9,188 8,584
Diluted 9,261 9,562 9,188 8,584
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ANALOGY, INC.
Consolidated Balance Sheet
(audited)
(000)
3/31/98 3/31/97
-------- --------
Cash and cash equivalents $ 8,130 $ 1,827
Marketable securities - 1,697
Accounts receivable, net 3,946 9,161
Prepaid expenses 2,146 886
Other assets 408 455
-------- --------
Total current assets 14,630 14,026
Furniture, fixtures and equipment, net 3,811 4,280
Library costs, net 3,924 2,729
Other assets, net 610 1,095
-------- --------
Total assets $ 22,975 $ 22,130
-------- --------
-------- --------
Accounts payable 1,556 1,301
Current portion of capital leases 536 566
Accrued salaries and benefits 2,726 2,095
Accrued expenses 339 181
Unearned revenue 8,562 5,812
-------- --------
Total current liabilities 13,719 9,955
Non-current portion of capital leases 454 499
Other liabilities 107 359
-------- --------
Total long-term liabilities 561 858
Common stock 17,906 17,124
Foreign currency translation (205) (155)
Accumulated deficit (9,006) (5,652)
-------- --------
Total shareholders' equity 8,695 11,317
-------- --------
Total liabilities and equity $ 22,975 $ 22,130
-------- --------
-------- --------
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