Exhibit 99.1
Moldflow Reports First Fiscal Quarter 2004 Results;
Reports Significant Growth in Revenues and Earnings
WAYLAND, Mass.--(BUSINESS WIRE)--Oct. 23, 2003--Moldflow
Corporation (NASDAQ: MFLO) today announced the results for its first
fiscal quarter of 2004. Worldwide revenues of $9.5 million for the
quarter ended September 27, 2003 represented a 15% increase from the
corresponding quarter of fiscal 2003. For the first fiscal quarter of
2004, Moldflow reported net income, as measured under generally
accepted accounting principles ("GAAP"), of $417,000, or $0.04 per
diluted share, compared to net income of $15,000, or $0.00 per share,
during the same quarter of fiscal 2003.
Roland Thomas, Moldflow's president and CEO said, "We are pleased
to report results for the first fiscal quarter of 2004 that are in
line with our expectations for the quarter and which reflect the
improving long-term business conditions in many of our markets and the
trends we have noted over the last several quarters. Our operating
results are particularly gratifying as they reflect continued growth
in product revenues on a year-over-year basis, both in absolute terms
and on a constant currency basis. In addition, we achieved meaningful
growth in earnings."
He continued, "As we entered this fiscal year, we set out a plan
to manage the company for growth with increased profitability and cash
flows, while continuing our investments in research and development
and in the distribution channels appropriate to reach our global
customer base. We met the milestones necessary to deliver on those
objectives during the first quarter, achieving both earnings growth
and positive cash flow from operations. To address the opportunities
available to us to expand our revenue base through alternate
distribution channels, we appointed a director of strategic alliances
who comes to us with significant experience in the design and
engineering software industry."
Thomas noted, "Our research and development activities resulted in
the introduction of Moldflow Manufacturing Solutions(TM) (MMS(TM)) 1.1
in September 2003. This release contains innovative product features
created in direct response to the needs of our customers, and
demonstrates our ability to rapidly tailor our product development
plans to the market's evolving requirements. At the end of the second
quarter, we plan to release the English-language version of our
plant-wide production monitoring product. This product suite, acquired
last year, has shown meaningful sales volume in its initial
French-language release. The release of this product in English will
complement our existing MMS capabilities and will allow us to bring a
full suite of production and process monitoring solutions to our
global customer base. Also, by quarter-end, we plan to ship the next
major release of Moldflow Plastics Advisers(R) (MPA(R)), containing
significant new capabilities targeted at engineers who use our Design
Optimization products during the initial stages of part and mold
design. By expanding the breadth of analysis capabilities in MPA, we
seek to deliver enhanced cost-effective simulation capabilities to a
wider mid-market audience."
He concluded, "The results for the first quarter provide a solid
foundation for achievement of our plans for the fiscal year. We will
continue to execute on our strategy to be the leading global provider
of plastics focused automation and optimization solutions to the
global manufacturing industry."
First Quarter Highlights
First quarter 2004 revenues totaled $9.5 million and represented
an increase of 15% over the same period in the prior year. Excluding
the impact of movements in foreign currency exchange rates, total
revenues increased 8% over the corresponding period of the prior year.
On a sequential basis, total revenues in the first fiscal quarter
decreased 4%, while the decrease in revenues on a constant currency
basis was 5%.
Total product revenues for the first quarter of fiscal 2004 of
$4.4 million increased by 18% over the same quarter of fiscal 2003 and
decreased 9% sequentially from the preceding quarter, consistent with
seasonal trends. On a constant currency basis, product revenues
increased 10% over the same quarter of fiscal 2003 and decreased 9%
sequentially from the preceding quarter. Revenues from Manufacturing
Solutions products during the first quarter represented 21% of total
product revenues, compared to 26% in the same quarter of the prior
year, while first quarter 2004 Design Optimization products accounted
for 79% of total product revenues. Services revenues, primarily
comprised of revenues from maintenance and support contracts, were
$5.2 million for the first quarter of fiscal 2004, up 12% from the
same quarter in fiscal 2003 and unchanged from the preceding quarter.
On a constant currency basis, services revenues increased 6% from the
same quarter in fiscal 2003 and were unchanged from the preceding
quarter. On a regional basis, revenues in Asia Pacific represented 40%
of Moldflow's total revenue for the first quarter of fiscal 2004,
while revenues in the Americas and Europe regions represented 25% and
35% of total revenues, respectively. In total, 102 new customers were
added during the quarter.
As of September 27, 2003, the Company had $52.7 million in cash
and marketable securities and no long-term debt. Cash flow from
operations in the first fiscal quarter of 2004 was $287,000 and free
cash flow was approximately breakeven. 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 flows
provided by operating activities as measured under GAAP.
The Company had a total of 246 employees at September 27, 2003, of
which 36 were sales representatives, 74 were in research and
development, and the remainder were employed in sales management,
marketing, customer support, and general and administrative functions.
Business Outlook
The current business outlook is based on information as of October
23, 2003 and is current as of that day only. Moldflow expects revenues
for the second fiscal quarter of 2004 to be between $9.8 million and
$10.3 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 37%.
Moldflow expects free cash flow for the second fiscal quarter of
2004 to be between breakeven and negative $600,000. Free cash flow in
Moldflow's outlook is based upon a projection of cash flow from
operations of between $400,000 and negative $200,000, which includes
the effect of required foreign tax payments, reduced by capital
expenditures, including capitalized software development costs,
projected to be approximately $400,000.
Financial Results
The unaudited condensed consolidated financial statements and
supplemental information for the first fiscal quarter ended September
27, 2003 follow.
Use of Non-GAAP Financial Information
To supplement our unaudited consolidated financial statements
presented on a GAAP basis, we may use a non-GAAP, or "pro forma",
measure referred to as free cash flow that we believe is appropriate
to enhance an overall understanding of our historical financial
performance and future prospects. Free cash flow is among the primary
indicators management uses as a basis for evaluating our financial
performance as well as for forecasting of future periods. For this
reason, and because this measure presents additional information that
is not readily ascertainable from the GAAP presentation, management
believes this non-GAAP measure can be useful to investors, potential
investors and others. The presentation of free cash flow is not meant
to be considered in isolation or as a substitute for cash flow from
operations prepared in accordance with GAAP.
Information Dissemination
Moldflow will host a conference call to discuss the first quarter
2004 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 leading global provider of
automation and optimization software solutions for the plastics
injection molding industry. 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. Moldflow's 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 Asia.
Note to Editors: Moldflow, Moldflow Manufacturing Solutions, MMS,
Moldflow Plastics Advisers and MPA 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,
(ii) planned new product introductions, and (iii) 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, (ii) with respect to planned new product
introductions, the risk that such products will not be completed and
released on schedule which could lead to lower revenues in this and
other fiscal quarters, and (iii) 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, 2003 as well as its subsequent quarterly and annual filings.
Revenue, earnings and cash flow 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 that 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
------------------------------
September 27, September 28,
2003 2002
-------------- --------------
Revenue:
Product $4,354 $3,696
Services 5,157 4,605
-------------- --------------
Total revenue 9,511 8,301
-------------- --------------
Costs and expenses:
Cost of product revenue 638 661
Cost of services revenue 629 280
Research and development 1,593 1,455
Selling and marketing 4,186 4,165
General and administrative 1,914 1,650
Amortization of intangible assets 111 159
-------------- --------------
Total operating expenses 9,071 8,370
-------------- --------------
Income (loss) from operations 440 (69)
Interest income, net 268 287
Other income (loss), net (43) 22
-------------- --------------
Income before income taxes 665 240
Provision for income taxes 248 225
-------------- --------------
Net income $417 $15
============== ==============
Net income per common share:
Basic $0.04 $0.00
Diluted $0.04 $0.00
Weighted average shares:
Basic 10,049 10,108
Diluted 10,580 10,371
Moldflow Corporation
Unaudited Condensed Consolidated Balance Sheet
(in thousands)
September 27, June 30,
2003 2003
-------------- --------------
Assets
Current assets:
Cash and cash equivalents $40,725 $38,320
Marketable securities 11,932 13,820
Accounts receivable, net 5,037 6,147
Inventories, prepaid expenses and other
current assets 5,302 5,011
-------------- --------------
Total current assets 62,996 63,298
Fixed assets, net 3,890 3,891
Goodwill and other intangibles assets, net 10,245 10,355
Other assets 1,347 1,933
-------------- --------------
Total assets $78,478 $79,477
============== ==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,545 $1,684
Accrued expenses 7,047 7,439
Deferred revenue 7,312 8,551
-------------- --------------
Total current liabilities 15,904 17,674
Deferred revenue 596 513
Other long-term liabilities 576 641
-------------- --------------
Total long-term liabilities 1,172 1,154
-------------- --------------
Total liabilities 17,076 18,828
-------------- --------------
Stockholders' Equity:
Common stock 102 102
Treasury stock (823) (926)
Additional paid-in capital 62,933 62,867
Accumulated deficit (3,673) (4,090)
Accumulated other comprehensive income 2,863 2,696
-------------- --------------
Total stockholders' equity 61,402 60,649
-------------- --------------
Total liabilities and stockholders'
equity $78,478 $79,477
============== ==============
Moldflow Corporation
Unaudited Condensed Consolidated Statement of Cash Flows
(in thousands)
Three Months Ended
------------------------------
September 27, September 28,
2003 2002
-------------- --------------
Cash flows provided by (used in)
operating activities $287 $(267)
Cash flows provided by investing
activities 1,579 1,151
Cash flows provided by (used in)
financing activities 169 (732)
Effect of exchange rate changes on cash
and cash equivalents 370 (427)
-------------- --------------
Net increase (decrease) in cash and cash
equivalents 2,405 (275)
Cash and cash equivalents, beginning of
period 38,320 47,634
-------------- --------------
Cash and cash equivalents, end of period $40,725 $47,359
============== ==============
Reconciliation of the Unaudited Condensed Consolidated Statement of
Cash Flows prepared in accordance with GAAP to free cash flows:
Three Months Ended
------------------------------
September 27, September 28,
2003 2002
-------------- --------------
Cash flows provided by (used in)
operating activities $287 $(267)
Purchases of fixed assets (310) (290)
--------------- -------------
Free cash flows $(23) $(557)
=============== =============
CONTACT: Moldflow corporate contact:
Dawn Soucier, 508-358-5848 x234
dawn_soucier@moldflow.com
or
Investor relations contact:
Suzanne MacCormack, 508-358-5848 x239
suzanne_maccormack@moldflow.com