Magma Reports Financial Results for Fourth Quarter and Fiscal Year 2005

CIMdata PLM Industry Summary Online Archive

28 April 2005

Financial News

Magma Reports Financial Results for Fourth Quarter and Fiscal Year 2005

Magma Design Automation Inc. announced financial results for its fourth quarter and fiscal year ended March 31, 2005.

Fourth Quarter Results

For the fourth quarter, Magma reported revenue of $35.7 million, compared to $34.0 million for the year-ago fourth quarter ended March 31, 2004, an increase of 5 percent. In accordance with generally accepted accounting principles (GAAP), Magma reported a net loss of $(5.6 million), or $(0.16) per share (basic and diluted), for the quarter, compared to net income of $4.2 million, or $0.10 per share (diluted), for the fourth quarter ended March 31, 2004.

Magma reported pro forma net income for the fourth quarter of fiscal 2005 of $3.2 million, or $0.08 per share (diluted). This compares to a pro forma net income of $7.2 million, or $0.17 per share (diluted), for the fourth quarter of fiscal 2004. Pro forma net income for the fourth quarter of fiscal 2005 reflects reported net income excluding the effects of amortization of developed technology, amortization of intangibles, amortization of deferred stock-based compensation, gain in equity investments and assets write off, miscellaneous marketing and other loss contingency and tax effect of non-GAAP adjustments. Pro forma net income for the fourth quarter of fiscal 2004 excludes the effects of amortization of developed technology, amortization of intangibles, amortization of deferred stock-based compensation, consolidation of an equity investment, and charges associated with losses in equity investments. A reconciliation of our pro forma results to GAAP results is included in this press release.

Fiscal Year 2005 Results

For the fiscal year ended March 31, 2005, Magma reported revenue of $145.9 million, compared to $113.7 million for the fiscal year ended March 31, 2004, an increase of 28 percent. In accordance with GAAP, Magma reported net loss of $(8.6) million, or $(0.25) per share (basic and diluted), for the recently completed fiscal year, compared to net income of $11.5 million, or $0.29 per share (diluted), for the fiscal year ended March 31, 2004.

Magma reported pro forma net income of $26.9 million, or $0.64 per share (diluted), for the fiscal year ended March 31, 2005. This compares to pro forma net income of $25.0 million, or $0.62 per share (diluted), for the fiscal year ended March 31, 2004. Pro forma net income for the year ended March 31, 2005 excludes the effects of amortization of developed technology, amortization of intangibles, in-process research and development, amortization of deferred stock-based compensation, miscellaneous restructuring, marketing expenses and other loss contingency, charges associated with loss in equity investments and asset write off. Pro forma net income for the year ended March 31, 2004 excludes the effects of amortization of developed technology, amortization of intangibles, in-process research and development, consolidation of an equity investment, amortization of deferred stock-based compensation and charges associated with loss in equity investments. A reconciliation of the pro forma to GAAP results is included in this press release.

"The year we just completed included many highlights for Magma," said Rajeev Madhavan, chairman and CEO of Magma. "Our fiscal 2005 revenue was another annual record and our bookings in the most recent quarter were also the best in Magma history. With the work our product teams have put into our Cobra development project, we're looking forward to even greater accomplishments in fiscal 2006."

Business Outlook

For Magma's fiscal 2006 first quarter, ending July 3, 2005, the company expects total revenue in the range of $35 million to $39 million. Pro forma EPS is expected to be in the range of $0.06 to $0.10, and GAAP net loss is expected to be in the range of $(0.13) to $(.09). A schedule showing a reconciliation of the projected pro forma EPS to GAAP projections is included in this release. A Financial Data Supplement containing detailed financial information intended to provide guidance and further insight into our business is available online at http://investor.magma-da.com/supplement.cfm in the Investor Relations section of the Magma website.

Conference Call

Magma will discuss the financial results for the recently completed quarter and fiscal year, including guidance going forward, during a live webcast and 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 May 5, 2005. Those without Internet access may listen to a replay of the call by telephone through May 5 by calling:

U.S. & Canada: (800) 642-1687, conference ID #5386655

Elsewhere: (706) 645-9291, conference ID #5386655

Magma provides pro forma data to assist investors seeking to understand the Magma's financial performance and prospects. Magma believes that this pro forma information provides useful information to investors by excluding the effect of expenses that are required to be recorded under GAAP that Magma does not believe are indicative of Magma's core operating results. In addition, because Magma has historically provided pro forma results to the investment community, Magma believes that including this information provides consistency in its financial reporting. Magma's pro forma data is not prepared in accordance with, or as an alternative to, GAAP information, and it may be materially different from pro forma measures that are used by other companies. These pro forma results should be considered supplemental to, and not a substitute for or superior to, Magma's results prepared in accordance with GAAP.

The full press release including financial tables is available at: http://www.magma-da.com/articles/Earnings/PR4QFY05Earnings.pdf

Become a member of the CIMdata PLM Community to receive your daily PLM news and much more.

Tell us what you think of the CIMdata Newsletter. Send your feedback.

CIMdata is committed to your privacy. Your personal information will never be sold or shared outside of CIMdata without your express permission.