Exhibit 99.1
Moldflow Reports Fourth Fiscal Quarter 2003 Results;
Exceeds Guidance with Quarterly Growth in Revenues and EPS
WAYLAND, Mass.--(BUSINESS WIRE)--Aug. 5, 2003--Moldflow
Corporation (NASDAQ: MFLO) today announced the results for its fourth
fiscal quarter and year ended June 30, 2003, which were above the
expectations previously set out by management. Fourth quarter revenues
of $9.9 million increased 20% from the corresponding quarter of fiscal
2002 and increased 5% sequentially from the preceding quarter.
Revenues of $36.6 million for the full 2003 fiscal year increased 4%
over fiscal 2002.
For the fourth fiscal quarter of 2003, Moldflow reported net
income, as measured under generally accepted accounting principles
("GAAP"), of $250,000, or $0.02 per diluted share, compared to a net
loss of $849,000, or $0.08 per share, during the same quarter of
fiscal 2002. For the full 2003 fiscal year, the Company reported a net
loss, as measured under GAAP, of $118,000, or $0.01 per share,
compared to net income of $780,000, or $0.08 per diluted share, in
fiscal 2002.
Pro forma net income, a non-GAAP financial measure, for the fourth
quarter was $340,000, or $0.03 per diluted share, which compared to
pro forma net loss of $222,000, or $0.02 per share, in the same
quarter of the prior year. Pro forma net income for the full 2003
fiscal year was $973,000, or $0.09 per diluted share, which was
unchanged from fiscal 2002. Pro forma net income in all periods
excludes non-cash amortization expense related to acquired intangible
assets and other restructuring and acquisition related charges, net of
related tax effects. Additionally, fiscal 2002 pro forma net income
excludes gains recognized on the sale of certain investments and
long-term assets. Please refer to the Unaudited Consolidated Statement
of Operations attached to this press release for a complete
reconciliation of the pro forma amounts to the most directly
comparable GAAP measures.
Roland Thomas, Moldflow's president and CEO said, "I am pleased to
report on a fiscal quarter and full fiscal year of strong financial
and operating results. During the past quarter, we continued to
execute well amid mixed global market conditions by delivering on our
well-established value proposition. We were rewarded with solid growth
in both revenues and profits."
He continued, "In the fourth quarter, we saw strong demand for our
products, in particular, the Moldflow Manufacturing Solutions, or
'MMS' products. In April, we released MMS 1.0 - the integration of our
process and production monitoring and control products into a new,
modular user environment - and it was well received by our customers.
With the demonstrated rapid payback on investment afforded by the MMS
suite, many new customers made initial investments and a notable
number of world-class global manufacturing companies expanded pilot
implementations into plant-wide deployments. In addition, we built
upon the initial successes that we had in France in the third quarter
with the production monitoring product acquired in our purchase of CPI
in January. This resulted in the highest revenue quarter for the MMS
product line in our history. This fiscal year also saw positive signs
for our Design Optimization Solutions business, particularly in Japan
where we were able to achieve many significant orders from both new
and existing customers."
He concluded, "The successes we had in the fourth quarter and the
last year are gratifying and make us optimistic about the future and
our business strategy. As we look forward to fiscal 2004, we expect to
see continued modest growth in total revenues. Further, we remain
committed to managing the company for growth with increased
profitability and cash flow while continuing to make investments in
research and development to maintain our market leadership and in the
distribution channels needed to reach our global customer base. Given
that there is still a degree of uncertainty in the world economy and
our end-user markets in particular, we will continue to monitor the
economic conditions and adjust our business model when appropriate to
meet these objectives."
Fourth Quarter Highlights
Fourth quarter 2003 revenues totaled $9.9 million and represented
an increase of 20% over the same period in the prior year. Excluding
the impact of movements in foreign currency exchange rates, revenues
increased 9% over the corresponding period of the prior year. On a
sequential basis, total revenues in the fourth fiscal quarter
increased 5%, while growth in revenues on a constant currency basis
was 2%.
Total product revenues for the fourth quarter of fiscal 2003 of
$4.8 million increased by 21% over the same quarter of fiscal 2002 and
increased sequentially by 4% over the preceding quarter. Revenues from
Manufacturing Solutions products during the fourth quarter represented
32% of total product revenues, up from 18% in the prior year, while
Design Optimization products accounted for 68% of total product
revenues. Service revenues, primarily comprised of revenues from
maintenance and support contracts, were $5.2 million for the fourth
quarter of fiscal 2003, up 18% from the same quarter in fiscal 2002
and 5% from the preceding quarter. On a regional basis, revenues in
Europe represented 44% of Moldflow's total revenues for the fourth
quarter of fiscal 2003, while revenues in the Americas and Asia
Pacific regions represented 24% and 32% of total revenue,
respectively. In total, 92 new customers were added during the
quarter.
As of June 30, 2003, the Company had $52.1 million in cash and
marketable securities and no long-term debt. Free cash flow generated
during the fourth quarter was $327,000 while cash flow provided by
operating activities was $914,000. Please refer to the Unaudited
Condensed Consolidated Statement of Cash Flows attached to this press
release for a complete reconciliation of free cash flow to cash flow
provided by operating activities as measured under GAAP.
The Company had a total of 246 employees at June 30, 2003, of
which 33 were sales representatives, 75 were in research and
development, with the remainder employed in sales management,
marketing, customer support, and general and administrative functions.
Business Outlook
The current business outlook is based on information as of August
5, 2003 and is current as of that day only. Moldflow expects revenues
for the first fiscal quarter of 2004 to be between $9.4 million and
$9.9 million and net income per diluted share, measured under GAAP, to
be between $0.01 and $0.03 per share, assuming an effective income tax
rate of 35%.
Moldflow expects negative free cash flow for the first fiscal
quarter of 2004 to be between $400,000 and $600,000 consistent with
historical seasonal trends. Free cash flow in Moldflow's outlook is
based upon a projection of cash flow used in operations of between
$100,000 and $200,000 reduced by capital expenditures, including
capitalized software development costs, projected to be between
$300,000 and $400,000.
Financial Results
The unaudited condensed consolidated financial statements and
supplemental information for the fourth fiscal quarter and the year
ended June 30, 2003 follow.
Use of Non-GAAP Financial Information
To supplement our unaudited consolidated financial statements
presented on a GAAP basis, we use non-GAAP, or "pro forma," additional
measures of net income (loss), net income (loss) per share and cash
flow that we believe are appropriate to enhance an overall
understanding of our historical financial performance and future
prospects. The non-GAAP results, which are adjusted to exclude certain
costs, expenses, gains and losses from the comparable GAAP measures,
are an indication of our baseline performance before gains, losses or
other charges that are considered by management to be outside of our
core operating results. These non-GAAP results are among the primary
indicators management uses as a basis for evaluating our financial
performance as well as for forecasting of future periods. For these
reasons, and because the non-GAAP additional measures present
additional information that is not readily ascertainable from the GAAP
presentation, management believes these non-GAAP measures can be
useful to investors, potential investors and others. The presentation
of this additional information is not meant to be considered in
isolation or as a substitute for net income (loss), income (loss) per
share or cash flow from operations prepared in accordance with GAAP.
Information Dissemination
Moldflow will host a conference call to discuss the fourth quarter
and full fiscal year 2003 results and future outlook at 11:30 a.m. US
Eastern time today. A live Webcast of the conference call, together
with this press release and supplemental financial information, can be
accessed through the Company's Website at www.moldflow.com in the
Investor Information section. In addition, the call, press release and
supplemental information will be archived and can be accessed through
the same link.
About Moldflow Corporation
Moldflow (NASDAQ: MFLO) is the world's leading provider of
software products and services that increase the speed, efficiency,
quality and drive down the cost of the design and manufacture of
injection molded plastic products. Companies use Moldflow's complete
suite of products to address plastic part design issues at the
earliest possible stage as well as to maximize productivity and
profitability on the manufacturing floor. Its collaboration with
academia, industry and customers around the world has led to a
reputation for constant innovation in the complete
design-to-manufacture process. Headquartered in Wayland,
Massachusetts, Moldflow has offices and research and development
centers in the United States, Europe, Australia and the Asia Pacific
region. For more information about Moldflow visit www.moldflow.com or
call 508-358-5848; fax 508-358-5868.
Note to Editors: Moldflow, Moldflow Manufacturing Solutions and
MMS are trademarks or registered trademarks of Moldflow Corporation or
its subsidiaries worldwide. All other trademarks are properties of
their respective holders.
Cautionary Statement Regarding Forward-Looking Information
Pursuant to the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995, the Company notes
that any statements contained in this press release that are not
historical facts are forward looking statements. Such forward looking
statements include, but are not limited to, those regarding Moldflow's
or management's intentions, hopes, beliefs, expectations, projections
or plans for the future and statements regarding: (i) Moldflow's
market leadership and competitive position in its market segments, and
(ii) the Company's business outlook including revenue and earnings
guidance. Forward-looking statements involve risks and uncertainties
that could cause actual results to differ materially from those
projected. These risks and uncertainties include: (i) with respect to
the Company's market leadership and competitive position, the risks
that a renewed economic downturn will adversely impact the market for
the Company's products, that competitors will emerge with greater
resources or unforeseen technological breakthroughs and that our
Manufacturing Solutions products will have a longer sales cycle than
our Design Optimization products, and (ii) with respect to the
Company's business outlook, the risks that a continued weak world
economy will further slow capital spending by the Company's
prospective customers, that the Company may not be able to recognize
the revenue derived from orders received, that the sales cycle may
lengthen based on the larger average deal sizes for our Manufacturing
Solutions products, that foreign currency fluctuations may adversely
affect our financial results, that our distribution partners will not
achieve their revenue objectives, that the overall mix of revenues
differs materially from that projected, and that changes in US or
foreign tax legislation may result in a higher level of income tax
expense than that projected, as well as other risks and uncertainties
detailed from time to time in reports filed by Moldflow with the
Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the year ended June 30, 2002 as well as its
subsequent quarterly and annual filings. Revenue and earnings guidance
offered by senior management today represents a point-in-time estimate
and is based on information as of the date of this press release.
Senior management has made numerous assumptions in providing this
guidance which, while believed to be reasonable, may not prove to be
accurate. In addition, as noted above, there are numerous factors
which may cause actual results to differ materially from the guidance
provided. The Company expressly disclaims any current intention or
obligation to update the guidance provided or any other
forward-looking statement in this press release to reflect future
events or changes in facts assumed for purposes of providing this
guidance or otherwise affecting the forward-looking statements
contained in this press release.
Moldflow Corporation
Unaudited Consolidated Statement of Operations
(in thousands, except per share data)
Three Months Ended
June 30, 2003
---------------------------------
Adjustments
GAAP to GAAP Non-GAAP
Results(a) Results Results(b)
---------------------------------
Revenue:
Product $4,768 $- $4,768
Services 5,157 - 5,157
------- ----- -------
Total revenue 9,925 - 9,925
------- ----- -------
Costs and
expenses:
Cost of product
revenue 800 - 800
Cost of
services revenue 324 - 324
Research and
development 1,309 - 1,309
Selling and
marketing 5,232 - 5,232
General and
administrative 1,912 - 1,912
Non-recurring charges (33) 33(c) -
Amortization of
intangible assets 111 (111)(d) -
------- ----- -------
Total operating
expenses 9,655 (78) 9,577
------- ----- -------
Income (loss)
from operations 270 78 348
Interest
income, net 255 - 255
Other income
(loss), net (30) - (30)
------- ----- -------
Income (loss)
before income
taxes 495 78 573
Provision for
(benefit from)
income taxes 245 (12)(e) 233
------- ----- -------
Net income
(loss) $250 $90 $340
======= ===== =======
Net income (loss) per
common share:
Basic $0.02 $0.03
Diluted $0.02 $0.03
Weighted average
shares:
Basic 10,003 10,003
Diluted 10,465 10,465
Three Months Ended
June 30, 2002
------------------------------
Adjustments
GAAP to GAAP Non-GAAP
Results(a) Results Results(b)
------------------------------
Revenue:
Product $3,937 $- $3,937
Services 4,366 - 4,366
------- ------- -------
Total revenue 8,303 - 8,303
------- ------- -------
Costs and
expenses:
Cost of product
revenue 607 - 607
Cost of
services revenue 412 - 412
Research and
development 1,640 - 1,640
Selling and
marketing 4,276 - 4,276
General and
administrative 1,614 - 1,614
Non-recurring
charges 1,272 (1,272)(g) -
Amortization of
intangible assets 164 (164)(d) -
------- ------- -------
Total operating
expenses 9,985 (1,436) 8,549
------- ------- -------
Income (loss)
from operations (1,682) 1,436 (246)
Interest
income, net 312 - 312
Other income
(loss), net 317 (446) (129)
------- ------- -------
Income (loss)
before income
taxes (1,053) 990 (63)
Provision for
(benefit from)
income taxes (204) 363(e) 159
------- ------- -------
Net income
(loss) $(849) $627 $(222)
======= ======= =======
Net income (loss) per
common share:
Basic $(0.08) $(0.02)
Diluted $(0.08) $(0.02)
Weighted average
shares:
Basic 10,085 10,085
Diluted 10,085 10,085
Year Ended
June 30, 2003
---------------------------------
Adjustments
GAAP to GAAP Non-GAAP
Results(a) Results Results(b)
---------------------------------
Revenue:
Product $17,259 $- $17,259
Services 19,366 - 19,366
-------- ------- --------
Total revenue 36,625 - 36,625
-------- ------- --------
Costs and
expenses:
Cost of product
revenue 2,964 (179)(c) 2,785
Cost of
services revenue 1,210 - 1,210
Research and
development 5,650 - 5,650
Selling and
marketing 18,638 - 18,638
General and
administrative 7,242 - 7,242
Non-recurring
charges 405 (405)(c) -
Amortization of
intangible assets 605 (605)(d) -
-------- ------- --------
Total operating
expenses 36,714 (1,189) 35,525
-------- ------- --------
Income (loss)
from operations (89) 1,189 1,100
Interest
income, net 1,089 - 1,089
Other income
(loss), net (198) - (198)
-------- ------- --------
Income before
income taxes 802 1,189 1,991
Provision for
income taxes 920 98(e) 1,018
-------- ------- --------
Net income (loss) $(118) $1,091 $973
======== ======= ========
Net income (loss) per
common share:
Basic $(0.01) $0.10
Diluted $(0.01) $0.09
Weighted average
shares:
Basic 10,020 10,020
Diluted 10,020 10,368
Year Ended
June 30, 2002
---------------------------------
Adjustments
GAAP to GAAP Non-GAAP
Results(a) Results Results(b)
---------------------------------
Revenue:
Product $17,870 $- $17,870
Services 17,218 - 17,218
-------- ------- --------
Total revenue 35,088 - 35,088
-------- ------- --------
Costs and
expenses:
Cost of product
revenue 2,518 - 2,518
Cost of
services revenue 1,401 - 1,401
Research and
development 6,234 - 6,234
Selling and
marketing 18,134 - 18,134
General and
administrative 6,660 - 6,660
Non-recurring
charges 1,272 (1,272)(g) -
Amortization of
intangible assets 656 (656)(d) -
-------- ------- --------
Total operating
expenses 36,875 (1,928) 34,947
-------- ------- --------
Income (loss)
from operations (1,787) 1,928 141
Interest
income, net 1,455 - 1,455
Other income
(loss), net 1,712 (1,575)(f) 137
-------- ------- --------
Income before
income taxes 1,380 353 1,733
Provision for
income taxes 600 153(e) 753
-------- ------- --------
Net income (loss) $780 $200 $980
======== ======= ========
Net income (loss) per
common share:
Basic $0.08 $0.10
Diluted $0.08 $0.09
Weighted average
shares:
Basic 10,076 10,076
Diluted 10,360 10,360
(a)The Unaudited Consolidated Statement of Operations prepared in
accordance with accounting principles generally accepted in the United
States of America ("GAAP").
(b)The Unaudited Consolidated Statement of Operations prepared on an
adjusted basis from that of the statement prepared in accordance with
GAAP, which is intended to enhance the reader's understanding of the
Company's results from operations.
(c) Restructuring and other impairment charges resulting from actions
taken in conjunction with the Company's January 2003 acquisition of
Controle de Processus Industriels, s.a.r.l. ("CPI") and related
subsequent adjustments.
(d) Amortization of acquired intangible assets.
(e) Net tax effect of the adjusted items.
(f) Gains on the sales of certain investments and other assets and a
gain on the settlement of an acquisition escrow matter.
(g) Restructuring charges resulting from actions taken in our April
2002 Restructuring Plan.
Moldflow Corporation
Unaudited Condensed Consolidated Balance Sheet
(in thousands)
June 30, June 30,
2003 2002
-------- --------
Assets
Current assets:
Cash and cash equivalents $38,320 $47,634
Marketable securities 13,820 3,233
Accounts receivable, net 6,147 5,927
Inventories, prepaid expenses
and other current assets 5,011 4,098
-------- --------
Total current assets 63,298 60,892
Fixed assets, net 3,891 3,793
Goodwill and other intangibles
assets, net 10,355 10,101
Other assets 1,933 1,227
-------- --------
Total assets $79,477 $76,013
======== ========
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $1,684 $1,164
Accrued expenses 7,439 7,664
Deferred revenue 8,551 7,931
-------- --------
Total current liabilities 17,674 16,759
Deferred revenue 513 -
Other long-term liabilities 641 614
-------- --------
Total liabilities 18,828 17,373
-------- --------
Stockholders' Equity:
Common stock 102 101
Additional paid-in capital 62,867 62,732
Treasury stock (926) (327)
Accumulated deficit (4,090) (3,972)
Accumulated other
comprehensive income 2,696 106
-------- --------
Total stockholders'
equity 60,649 58,640
-------- --------
Total liabilities and
stockholders' equity $79,477 $76,013
======== ========
Moldflow Corporation
Unaudited Condensed Consolidated Statement of Cash Flows
(in thousands)
Three Months Ended Year Ended
----------------- -----------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Cash flows provided by operating
activities $914 $1,416 $2,384 $4,961
Cash flows provided by (used in)
investing activities (10,237) (3,683) (13,398) 8,836
Cash flows provided by (used in)
financing activities 43 27 (525) (55)
Effect of exchange rate changes on
cash and cash equivalents 1,477 569 2,225 923
-------- -------- -------- --------
Net increase (decrease) in cash
and cash equivalents (7,803) (1,672) (9,314) 14,665
Cash and cash equivalents,
beginning of period 46,123 49,305 47,634 32,969
-------- -------- -------- --------
Cash and cash equivalents,
end of period $38,320 $47,634 $38,320 $47,634
======== ======== ======== ========
Reconciliation of the Unaudited Condensed Consolidated Statement of
Cash Flows prepared in accordance with GAAP to free cash flows:
Three Months Ended Year Ended
----------------- -----------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Cash flows provided by
operating activities $914 $1,416 $2,384 $4,961
Purchases of fixed assets (236) (451) (1,240) (1,143)
Proceeds of fixed asset disposals - - - 930
Capitalization of software
development costs (351) - (669) (602)
-------- -------- -------- --------
Free cash flows $327 $965 $475 $4,146
======== ======== ======== ========
CONTACT: Moldflow Corporation
Dawn Soucier, 508-358-5848 x234
dawn_soucier@moldflow.com
or
Investor relations contact:
Suzanne MacCormack, 508-358-5848 x239
suzanne_maccormack@moldflow.com