Exhibit 99.1
Moldflow Reports Significant Growth in Revenues and Profits
in Third Fiscal Quarter of 2004
WAYLAND, Mass.--(BUSINESS WIRE)--April 22, 2004--Moldflow
Corporation (NASDAQ: MFLO)
-- Year-over-year revenue growth of 40% and significant net
income growth
-- Completion of American MSI acquisition and Moldflow business
unit reorganization
-- Strong results in all regions with traction from new product
introductions
Moldflow Corporation (NASDAQ: MFLO) today announced the results
for its third quarter and first nine months of fiscal 2004. Worldwide
revenue of $13.3 million for the quarter ended March 27, 2004
represented a 40% increase from the corresponding quarter of fiscal
2003, including the revenue from American MSI Corporation, acquired on
January 23, 2004. For the third quarter, Moldflow reported net income,
as measured under generally accepted accounting principles ("GAAP"),
of $509,000, or $0.05 per diluted share, compared to a net loss of
$584,000, or a loss of $0.06 per share, during the same quarter of
fiscal 2003, a significant increase.
For the first nine months of fiscal 2004, revenue of $33.4 million
increased 25% over the corresponding period of the prior fiscal year.
Net income for the first nine months of fiscal 2004 of $1.5 million,
or $0.14 per diluted share, increased from a net loss of $368,000, or
a loss of $0.04 per share in the same period of fiscal 2003.
Roland Thomas, president and chief executive officer of Moldflow
said, "We continue to see positive economic trends across the Asia
Pacific and Europe regions, with the beginning of improvement in the
Americas. Further, this quarter we completed the acquisition of one of
the market leading providers of hot runner process control systems,
American MSI Corporation. With this acquisition, we can now deliver
solutions that optimize the production processes at each of the
critical control points that directly affect the quality and cost of
manufacture for injection molded plastic parts today."
He continued, "The integration of the American MSI business has
gone very smoothly, with longer-range product integration activities
already underway. We have also completed the reorganization of the
Company into two business units, focused along the lines of our
product groups for Design Analysis Solutions and Manufacturing
Solutions. This reorganization will allow us to better focus our
sales, marketing and customer support activities to ensure our
customers receive the highest level of quality in the products and
services that they use to increase the productivity of their
engineering and manufacturing processes. The addition of the American
MSI business has brought us new capabilities on the shop floor and
immediate access to a significant segment of the potential market for
our Manufacturing Solutions products. In addition, the senior
management team and employees of American MSI bring to Moldflow an
extensive knowledge-base of plastics manufacturing requirements on the
factory floor."
Thomas noted, "Our sales activity in both business units was
sustained throughout this early transition period and we saw
year-over-year growth across all three regions. Sales of Design
Analysis Solutions in Asia were particularly strong in the third
quarter with Japan representing 36% of Design Analysis product
revenue. We noted strength in the automotive and electronics industry
throughout Asia and parts of Europe, evidenced by sales to such
companies as Samsung, Delphi, Nippo, Tokai Rubber and Sony. Further,
we gained traction with our Moldflow Plastics Advisers 7.0 product
released in late December 2003. This product, which introduced new
modules that provide significant additional functionality and
enhancements to the MPA suite, allows users to simulate more phases of
the injection molding process, address problems related to cooling,
warpage and shrinkage, and further optimize their part and mold
designs."
He concluded, "Overall, we are very pleased with our performance
and financial results for the third quarter. It marks yet another
quarter of meeting or exceeding the expectations we have set. As we
look ahead to our fourth fiscal quarter and the upcoming fiscal year,
we are optimistic that economic growth in our end-user markets will
continue and result in our customers making strategic investments to
increase productivity and profitability, which will result in
continued growth for our business. We believe that the integration of
the American MSI solutions into our product offering, the additions we
have made to our Design Analysis Solutions this year, and a refocused
business leaves us well positioned to seek out growth opportunities in
our global market."
Third Quarter Highlights
Third quarter 2004 revenue totaled $13.3 million and represented
an increase of 40% over the same period in the prior year. Excluding
the impact of movements in foreign currency exchange rates, total
revenue increased 30% over the corresponding period of the prior year.
On a sequential basis, total revenue in the third fiscal quarter
increased 25%, while the increase in revenue on a constant currency
basis was 23%.
Total product revenue for the third quarter of fiscal 2004 of $7.6
million increased by 65% over the same quarter of fiscal 2003 and
increased 48% sequentially from the preceding quarter. On a constant
currency basis, product revenue increased 55% over the same quarter of
fiscal 2003 and increased 47% sequentially from the preceding quarter.
Revenue from Manufacturing Solutions products during the third
quarter, including revenues from the hot runner process control
business acquired from American MSI in January 2004, represented
approximately 42% of total product revenue, compared to 14% in the
same quarter of the prior year. During the third quarter, Design
Analysis products accounted for 58% of total product revenue. Services
revenue, primarily comprised of revenue from maintenance and support
contracts, was $5.7 million for the third quarter of fiscal 2004, up
17% from the same quarter in fiscal 2003 and up 4% from the preceding
quarter. On a constant currency basis, services revenue increased 8%
from the same quarter in fiscal 2003 and was unchanged from the
preceding quarter.
On a regional basis, revenue in the Americas represented 39% of
Moldflow's total revenue for the third quarter of fiscal 2004, while
revenue in the Asia/Pacific and Europe regions represented 31% and 30%
of total revenue, respectively. In total, 111 new customers were added
during the quarter.
As of March 27, 2004, the Company had $49.3 million in cash and
marketable securities and no long-term debt. Cash provided by
operations in the third fiscal quarter of 2004 was $3.4 million and
capital expenditures, including capitalized software development
costs, were $572,000.
Non-GAAP Financial Results
The adjusted results highlighted below represent non-GAAP
financial measures. A reconciliation of these measures to the
appropriate GAAP measures is included in the condensed financial
statements included in this release.
Excluding the impact of product revenues on which no profit margin
was earned as a result of purchase accounting adjustments related to
the acquisition of American MSI, the Company's third quarter non-GAAP
results include total adjusted revenue of $13.1 million, as compared
to $9.5 million in the third quarter of the previous fiscal year. In
the third fiscal quarter of 2004, the Company's non-GAAP operating
profit margin of $1.2 million, excluding the aforementioned
adjustment, non-cash amortization and restructuring charges, increased
four-fold, when compared to $277,000 for the third quarter of the
previous fiscal year. Non-GAAP diluted earnings per share of $0.11
increased from $0.01 in the third quarter of the previous fiscal year.
The significant non-GAAP adjustments include:
Purchase Accounting Adjustment to Acquired Deferred Revenue
In the accounting for the purchase of American MSI, the Company
recorded $200,000 of deferred revenue and an equal amount of inventory
related to sales orders outstanding at the time of the acquisition.
Although these amounts had no impact on the Company's net operating
results when the sales were ultimately recorded in the third fiscal
quarter, they adversely impacted the Company's reported GAAP gross
margin from product revenues. In order to provide investors with
financial information that facilitates comparison of historical and
future results, the Company has provided adjusted non-GAAP financial
information, which excludes the impact of this purchase accounting
adjustment from both product revenue and cost of product revenue.
Acquisition Related Amortization
Since 2000, the Company has made four acquisitions, including the
acquisition of American MSI Corporation in January 2004. All of these
acquisitions have been accounted for as purchases, resulting in the
recording of goodwill and other identifiable intangible assets. The
non-GAAP financial presentation excludes the impact of non-cash
amortization expense, a portion of which was recorded as cost of
product revenue, from net operating results.
Restructuring Costs and Related Charges
In connection with the acquisition of American MSI and the
reorganization of the business into separate business units, the
Company incurred costs in respect of payments to employees whose
positions were eliminated. A restructuring charge of $508,000, or
$0.05 per diluted share, was incurred in the third fiscal quarter of
2004.
In the third quarter of fiscal 2003, the Company acquired certain
assets of Controle de Processus Industriels s.a.r.l, and incurred
certain asset impairment charges and restructuring costs, totaling
$617,000, or $507,000, net of tax, and $0.06 per diluted share.
Business Outlook
The current business outlook is based on information as of April
22, 2004 and is current as of that day only. These statements are
forward looking and actual results may differ materially.
Based on current visibility, Moldflow expects revenue for the
fourth fiscal quarter of 2004 to be between $14.1 million and $14.7
million. For the same period, earnings per diluted share are expected
to be in the range of $0.07 to $0.11. Based on these anticipated
fourth fiscal quarter results, Moldflow expects revenues for the full
2004 fiscal year to be in the range of $47.5 million to $48.2 million,
with earnings per diluted share to be in the range of $0.21 to $0.25.
Financial Results
The unaudited condensed consolidated financial statements and
supplemental information for the third fiscal quarter ended March 27,
2004 follow.
Use of Non-GAAP Financial Information
To supplement our unaudited consolidated financial statements
presented on a GAAP basis, we may use non-GAAP measures that we
believe are appropriate to enhance an overall understanding of our
historical financial performance and future prospects. Non-GAAP
revenue, operating margin, net income and diluted earnings per share
are 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 these 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 these measures is not meant to be considered in isolation or as a
substitute for financial statements prepared in accordance with GAAP.
Information Dissemination
Moldflow will host a conference call to discuss the third fiscal
quarter 2004 results and future outlook at 11:00 a.m. U.S. Eastern
time today. A live Webcast of the conference call, together with this
press release, can be accessed through the Company's Website at
www.moldflow.com in the Investor Information section. In addition, the
call and press release 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, enabling hardware and hot runner
process control 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, manufacturing and research and
development centers in the United States, Europe, Australia and Asia.
Note to Editors: Moldflow, Moldflow Plastics Advisers and American
MSI 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) the impact of the acquisition of American MSI and the
reorganization of the Company into business units on the Company's
financial position and results of operations, and (iii) the Company's
business outlook including revenue and earning 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
Analysis products, (ii) with respect to the Company's acquisition of
American MSI and reorganization of the Company into business units,
the risk that the acquisition will not be integrated effectively, that
it may have a negative impact on the Company's financial results
including the potential that the Company may incur unexpected costs
arising from integration of the people, products and operations of
American MSI, or that the integration and reorganization may result in
lost revenue caused by business disruption or the distraction of our
management and sales force, and (iii) with respect to the Company's
business outlook, the risks that fluctuations in the world economy may
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, 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 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 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 Nine Months Ended
-------------------- -------------------
March 27, March 29, March 27, March 29,
2004 2003 2004 2003
--------- ---------- --------- ---------
Revenue:
Product $7,574 $4,579 $17,041 $12,491
Services 5,716 4,894 16,391 14,209
--------- ---------- --------- ---------
Total revenue 13,290 9,473 33,432 26,700
--------- ---------- --------- ---------
Costs and expenses:
Cost of product revenue 1,778 829 3,021 2,164
Cost of services revenue 1,457 323 3,020 886
Research and development 1,695 1,567 4,823 4,341
Selling and marketing 5,038 4,778 13,922 13,406
General and administrative 2,188 1,878 6,219 5,330
Restructuring charges 508 438 508 438
Amortization of intangible
assets 126 176 347 494
--------- ---------- --------- ---------
Total operating expenses 12,790 9,989 31,860 27,059
--------- ---------- --------- ---------
Income (loss) from operations 500 (516) 1,572 (359)
Interest income, net 321 263 879 834
Other income (loss), net (18) (106) (52) (168)
--------- ---------- --------- ---------
Income (loss) before income
taxes 803 (359) 2,399 307
Provision for income taxes 294 225 878 675
--------- ---------- --------- ---------
Net income (loss) $509 $(584) $1,521 $(368)
========= ========== ========= =========
Net income (loss) per common
share:
Basic $0.05 $(0.06) $0.15 $(0.04)
Diluted $0.05 $(0.06) $0.14 $(0.04)
Weighted average shares:
Basic 10,411 9,997 10,173 10,026
Diluted 11,001 9,997 10,746 10,026
Moldflow Corporation
Unaudited Consolidated Statement of Operations
(in thousands, except per share data)
Three Months Ended
March 27, 2004
------------------------------------
GAAP Adjustments Non-GAAP
Results to GAAP Results
(a) Results (b)
------------------------------------
Revenue:
Product $7,574 $(198) (c) $7,376
Services 5,716 - 5,716
----------- ---------- ----------
Total revenue 13,290 (198) 13,092
----------- ---------- ----------
Costs and expenses:
Cost of product revenue 1,778 (222) (g) 1,556
Cost of services revenue 1,457 - 1,457
Research and development 1,695 - 1,695
Selling and marketing 5,038 - 5,038
General and administrative 2,188 - 2,188
Restructuring charges 508 (508) (d) -
Amortization of intangible
assets 126 (126) (f) -
----------- ---------- ----------
Total operating expenses 12,790 (856) 11,934
----------- ---------- ----------
Income (loss) from operations 500 658 1,158
Interest income, net 321 - 321
Other income (loss), net (18) - (18)
----------- ---------- ----------
Income (loss) before income taxes 803 658 1,461
Provision for income taxes 294 - 294
----------- ---------- ----------
Net income (loss) $509 $658 $1,167
=========== ========== ==========
Net income (loss) per common share:
Basic $0.05 $0.11
Diluted $0.05 $0.11
Weighted average shares:
Basic 10,411 10,411
Diluted 11,001 11,001
Three Months Ended
March 29, 2003
------------------------------------
GAAP Adjustments Non-GAAP
Results to GAAP Results Results
(a) (b)
------------------------------------
Revenue:
Product $4,579 $- $4,579
Services 4,894 - 4,894
----------- --------- ----------
Total revenue 9,473 - 9,473
----------- --------- ----------
Costs and expenses:
Cost of product revenue 829 (179) (e) 650
Cost of services revenue 323 - 323
Research and development 1,567 - 1,567
Selling and marketing 4,778 - 4,778
General and administrative 1,878 - 1,878
Restructuring charges 438 (438) (e) -
Amortization of intangible
assets 176 (176) (f) -
----------- --------- ----------
Total operating expenses 9,989 (793) 9,196
----------- --------- ----------
Income (loss) from operations (516) 793 277
Interest income, net 263 - 263
Other income (loss), net (106) - (106)
----------- --------- ----------
Income (loss) before income taxes (359) 793 434
Provision for income taxes 225 110 (h) 335
----------- --------- ----------
Net income (loss) $(584) $683 $99
=========== ========= ==========
Net income (loss) per common share:
Basic $(0.06) $0.01
Diluted $(0.06) $0.01
Weighted average shares:
Basic 9,997 9,997
Diluted 9,997 10,367
Nine Months Ended
March 27, 2004
------------------------------------
GAAP Adjustments Non-GAAP
Results to GAAP Results Results
(a) (b)
------------------------------------
Revenue:
Product $17,041 $(198) (c) $16,843
Services 16,391 - 16,391
----------- ---------- ----------
Total revenue 33,432 (198) 33,234
----------- ---------- ----------
Costs and expenses:
Cost of product revenue 3,021 (222) (g) 2,799
Cost of services revenue 3,020 - 3,020
Research and development 4,823 - 4,823
Selling and marketing 13,922 - 13,922
General and administrative 6,219 - 6,219
Restructuring charges 508 (508) (d) -
Amortization of intangible
assets 347 (347) (f) -
----------- ---------- ----------
Total operating expenses 31,860 (1,077) 30,783
----------- ---------- ----------
Income (loss) from operations 1,572 879 2,451
Interest income, net 879 - 879
Other income (loss), net (52) - (52)
----------- ---------- ----------
Income before income taxes 2,399 879 3,278
Provision for income taxes 878 - 878
----------- ---------- ----------
Net income (loss) $1,521 $879 $2,400
=========== ========== ==========
Net income (loss) per common share:
Basic $0.15 $0.24
Diluted $0.14 $0.22
Weighted average shares:
Basic 10,173 10,173
Diluted 10,746 10,746
Nine Months Ended
March 29, 2003
------------------------------------
GAAP Adjustments Non-GAAP
Results to GAAP Results Results
(a) (b)
------------------------------------
Revenue:
Product $12,491 $- $12,491
Services 14,209 - 14,209
----------- --------- ----------
Total revenue 26,700 - 26,700
----------- --------- ----------
Costs and expenses:
Cost of product revenue 2,164 (179) (e) 1,985
Cost of services revenue 886 - 886
Research and development 4,341 - 4,341
Selling and marketing 13,406 - 13,406
General and administrative 5,330 - 5,330
Restructuring charges 438 (438) (e) -
Amortization of intangible
assets 494 (494) (f) -
----------- --------- ----------
Total operating expenses 27,059 (1,111) 25,948
----------- --------- ----------
Income (loss) from operations (359) 1,111 752
Interest income, net 834 - 834
Other income (loss), net (168) - (168)
----------- --------- ----------
Income before income taxes 307 1,111 1,418
Provision for income taxes 675 110 (h) 785
----------- --------- ----------
Net income (loss) $(368) $1,001 $633
=========== ========= ==========
Net income (loss) per common share:
Basic $(0.04) $0.06
Diluted $(0.04) $0.06
Weighted average shares:
Basic 10,026 10,026
Diluted 10,026 10,336
(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) Deferred revenue resulting from the Company's acquisition of
American MSI Corporation ("AMSI").
(d) Restructuring charges resulting from the Company's acquisition
of AMSI.
(e) Restructuring and other impairment charges resulting from
actions taken in conjunction with the Company's acquisition of
Controle de Processus Industriels, s.a.r.l ("CPI").
(f) Amortization of acquired intangible assets.
(g) Cost of sales of acquired deferred revenue ($198,000) and
amortization of acquired intangible assets ($24,000).
(h) Net tax effect of the adjusted items.
Moldflow Corporation
Unaudited Condensed Consolidated Balance Sheet
(in thousands)
March 27, June 30,
2004 2003
-------- --------
Assets
Current assets:
Cash and cash equivalents $47,868 $38,320
Marketable securities 1,481 13,820
Accounts receivable, net 9,200 6,147
Inventories, prepaid expenses
and other current assets 6,236 5,011
-------- --------
Total current assets 64,785 63,298
Fixed assets, net 4,299 3,891
Goodwill and other intangibles
assets, net 20,846 10,355
Other assets 2,345 1,933
-------- --------
Total assets $92,275 $79,477
======== ========
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $2,576 $1,684
Accrued expenses 9,319 7,439
Deferred revenue 9,327 8,551
-------- --------
Total current liabilities 21,222 17,674
Deferred revenue 907 513
Other long-term liabilities 1,281 641
-------- --------
Total long-term
liabilities 2,188 1,154
-------- --------
Total liabilities 23,410 18,828
-------- --------
Stockholders' Equity:
Common stock 106 102
Treasury stock - (926)
Additional paid-in capital 67,377 62,867
Accumulated deficit (2,569) (4,090)
Accumulated other
comprehensive income 3,951 2,696
-------- --------
Total stockholders'
equity 68,865 60,649
-------- --------
Total liabilities and
stockholders' equity $92,275 $79,477
======== ========
Moldflow Corporation
Unaudited Condensed Consolidated Statement of Cash Flows
(in thousands)
Three Months Nine Months Ended
Ended
----------------- -----------------
March March March March
27, 29, 27, 29,
2004 2003 2004 2003
-------- -------- -------- --------
Cash flows provided by operating
activities $3,367 $1,386 $3,428 $1,470
Cash flows provided by (used in)
investing activities 2,421 (5,459) 3,336 (3,161)
Cash flows provided by (used in)
financing activities 837 143 1,047 (568)
Effect of exchange rate changes on
cash and cash equivalents 287 832 1,737 748
-------- -------- -------- --------
Net increase (decrease) in cash
and cash equivalents 6,912 (3,098) 9,548 (1,511)
Cash and cash equivalents,
beginning of period 40,956 49,221 38,320 47,634
-------- -------- -------- --------
Cash and cash equivalents, end of
period $47,868 $46,123 $47,868 $46,123
======== ======== ======== ========
CONTACT: Moldflow Corporation
Dawn Soucier, 508-358-5848 x234
dawn_soucier@moldflow.com