CIMdata PLM Industry Summary Online Archive
28 October 2004
Financial News
Magma Reports Financial Results for Second Quarter
Magma Design Automation Inc. announced financial results for its fiscal 2005 second quarter, ended Sept. 30, 2004.
Magma reported record revenue of $36.9 million for the quarter, compared to $25.8 million for the quarter ended Sept. 30, 2003, an increase of 43 percent. Magma also reported pro forma net income of $7.7 million, or $0.18 per share (diluted), for the second quarter of fiscal 2005, compared to pro forma net income of $6.0 million, or $0.15 per share (diluted), for the second quarter of fiscal 2004. In accordance with generally accepted accounting principles (GAAP), Magma reported net income for the quarter of $0.3 million, or $0.01 per share (diluted), compared to net income of $3.4 million, or $0.09 per share (diluted), for the quarter ended Sept. 30, 2003. Pro forma net income for the quarter excludes amortization of developed technology, miscellaneous restructuring and marketing expenses, amortization of intangibles, amortization of deferred stock compensation and tax effects of pro forma adjustments.
For the six-month period ended Sept. 30, 2004, Magma reported revenue of $73.0 million, compared to $48.6 million for the six-month period ended Sept. 30, 2003, an increase of 50 percent. Magma reported pro forma net income of $15.3 million, or $0.36 per share (diluted), for the six-month period ended Sept. 30, 2004. This compares to pro forma net income of $10.9 million, or $0.28 per share (diluted), for the six-month period ended Sept. 30, 2003. Pro forma net income for the six-month period reflects the adjustments referred to above, and eliminates the effects of a loss on equity investments and in-process research and development expenses. In accordance with GAAP, Magma reported net loss attributed to common shareholders for the recently completed six-month period of $2.2 million, or ($0.07) per share (basic), compared to net income attributed to common shareholders of $3.5 million, or $0.09 per share (diluted), for the six-month period ended Sept. 30, 2003.
Magma provides pro forma financial information to assist investors in understanding the company's operating results and business trends. Pro forma financial data is not prepared in accordance with GAAP, and should not be viewed as an alternative to GAAP financial information. Our pro forma financial data may be materially different from pro forma measures used by other companies. A reconciliation of our pro forma financial information to the most closely comparable GAAP financial measures is included in this press release.
"Our second quarter continued Magma's growth in revenue, which has increased for eight consecutive quarters," said Rajeev Madhavan, chairman and CEO of Magma. "But as we said during our conference call to discuss our revised outlook, we are disappointed in the quarter from the perspective of new orders. We intend to resume our previous level of business success, and over the next several quarters expect to introduce new products, several of which represent the fruition of our recent acquisitions. Some will offer improved capabilities where our technology is already well established, and some will enable us to enter new market segments where we think existing solutions are inadequate. We expect these new offerings to further differentiate Magma from our competitors."
Guidance & Business Outlook
Magma's orders in its quarter ended Sept. 30, 2004, were below its expectations as announced during Magma's July 28 earnings call. Magma's performance on all other measures was within its target ranges established during Magma's July 28 earnings call. For Magma's fiscal 2005 third quarter, ending Dec. 31, 2004, the company expects total revenue in the range of $37 million to $40 million, pro forma EPS in the range of $0.18 to $0.22 and GAAP EPS in the range of $0.01 to $0.05.
Consistent with company practice of providing financial guidance at the time of each quarterly earnings announcement, Chief Financial Officer Greg Walker will discuss Magma's business outlook during the company's live earnings call at 2 p.m. PDT today. More detailed information on the company's business outlook is available in the "Financial Disclosure Supplement" document, available in the Investor Relations section of the Magma website at http://investor.magma-da.com/home.cfm . The business outlook targets set forth in this press release and on Magma's website represent the company's expectations only as of the date of publication and should not be viewed as a statement about Magma's expectations after this date.
Magma will discuss the financial results for the recently completed quarter, including guidance going forward, during a live earnings call today at 2 p.m. PDT (5 p.m. EDT).
Following completion of the call, a webcast replay of the call will be available at http://investor.magma-da.com/home.cfm through Nov. 4, 2004. Those without Internet access may listen to a replay of the call by telephone through Nov. 4 by calling:
U.S. & Canada: (800) 642-1687, conference ID #1589303
Elsewhere: (706) 645-9291, conference ID #1589303
Full financials are available at http://www.magma-da.com/articles/Earnings/PR2QFY05Earnings.pdf
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