CIMdata PLM Industry Summary Online Archive
5 August 2008
Financial News
MSC.Software Reports Financial Results for the Second Quarter Ended June 30, 2008
MSC.Software Corporation reported results for the second quarter ended June 30, 2008. Financial highlights include the following:
Quarter ended June 30, 2008:
• Total revenue of $64.4 million, an increase of 6% over the second quarter last year,
• Maintenance revenue of $35.9 million, an increase of 13% over last year,
• Services revenue of $7.4 million, an increase of 26% over last year.
Six Months ended June 30, 2008:
• Total revenue of $125.7 million, an increase of 6% over the same period last year,
• Maintenance revenue of $69.0 million, an increase of 14% versus the same period last year,
• Net cash provided by operations during the six month period was $26.7 million,
• Deferred revenue at June 30, 2008 of $95.3 million, and
• Cash and Investments at June 30, 2008 of $156.2 million.
Revenue
Total revenue for the second quarter ended June 30, 2008 was $64.4 million compared to $60.7 million for the second quarter in 2007. Software revenue for the second quarter of 2008 totaled $21.1 million compared to $23.0 million for the second quarter in 2007. Maintenance revenue totaled $35.9 million and services revenue totaled $7.4 million for the second quarter of 2008, compared to $31.8 million of maintenance revenue and $5.9 million of services revenue for the second quarter in 2007. Foreign exchange favorably impacted total revenue by $5.9 million in the second quarter of 2008.
Total revenue for the six months ended June 30, 2008 was $125.7 million compared to $118.4 million for the six month period in 2007. Software revenue totaled $43.0 million in 2008 compared to $46.0 million in 2007. Maintenance revenue totaled $69.0 million and services revenue totaled $13.7 million for the first six months of 2008, compared to $60.6 million of maintenance revenue and $11.8 million of services revenue for the six months in 2007. Foreign exchange favorably impacted total revenue by $11.1 million in the six months.
"Although software revenue continues to be impacted by our product transition, the enterprise simulation product suite represented 33% of total license revenue in the quarter," said Bill Weyand, CEO and Chairman of MSC.Software. "Additionally, we've focused and managed our professional consulting services for profitable revenue growth and this business was up 26% in the quarter. The continued strength in our maintenance revenue stream is indicative of the quality of our products and represents a tremendous asset for our business."
"As MSC enters the final phase of its product and corporate transition, the focus now turns to business execution and continuous cost improvements," said Bill Weyand, CEO and Chairman of MSC.Software. "During the second quarter we implemented several operating cost improvement measures, including a reduction in headcount representing approximately 6% of the workforce and a significant reduction in contracted services that we believe will result in hard dollar savings in the second half of 2008."
"SimEnterprise R3 releases launched in the second quarter have robust functionality that improve upon our scalable enterprise solutions, allowing customers to innovate and optimize their simulation methodologies and move from pilot/proof of concept projects to more global deployments. In June, we also launched new versions of our Engineering Analysis and MD product suite to enhance MSC's existing analysis tools and ensure our customer's seamless migration to multi discipline solutions," continued Mr. Weyand.
Revenue by Geography
Total revenue in the Americas for the second quarter and six months ended June 30, 2008 was $20.1 million and $38.7 million, respectively, compared to $17.2 million and $35.7 million last year. Total revenue in EMEA for the second quarter and six months ended June 30, 2008 was $24.8 million and $48.3 million, respectively, compared to $24.7 million and $44.4 million last year. Changes in the Euro increased EMEA revenue by $3.4 million in the quarter and $6.4 million in the six month period. In the Asia region, revenue for the second quarter and six months ended June 30, 2008 totaled $19.5 million and $38.7 million, respectively, compared to $18.8 million and $38.3 million last year. Changes in the Japanese Yen increased Asia revenue by $2.5 million in the quarter and $4.7 million in the six months.
Results of Operations and EPS
Total operating expenses for the second quarter ended June 30, 2008 were $52.5 million, compared to $45.9 million last year. Total operating expenses increased by $3.1 million due to the impact of foreign currency exchange. The operating loss for the second quarter was $0.3 million, which compares to operating income of $3.8 million in the second quarter last year. This quarter's operating loss included $0.7 million of restructuring charges and the second quarter last year included $0.7 million of restructuring and other charges. Income from continuing operations for the quarter totaled $1.0 million or $0.02 per diluted share, compared $1.5 million or $0.03 per diluted share in the second quarter last year.
Total operating expenses for the six months ended June 30, 2008 were $106.2 million, compared to $105.3 million last year. Total operating expenses increased by $5.7 million due to the impact of foreign currency exchange. The operating loss for the six month period was $4.8 million, compared to an operating loss of $9.6 million in the six month period last year. The operating loss for the first six months of 2008 included $0.8 million of restructuring charges and for the six month period ended June 30, 2007 included $7.8 million of restructuring and other charges. The loss from continuing operations for the six months totaled $1.2 million or ($0.03) per diluted share, compared to a loss of $5.0 million or ($0.11) per diluted share in the six months last year.
Conference Call
The Company will host a conference call to discuss the second quarter financial results today at 1:30 pm pacific (4:30 pm eastern). The second quarter conference call will include a slide presentation that can be downloaded at: http://www.mscsoftware.com/ir/. The conference call can be accessed by web cast at: http://www.mscsoftware.com/ir/ or by dialing in to (800) 374-0151 for US callers or (706) 634-4981 for international callers. To participate in the live conference call, use the following conference ID code: 55221048.
An archived version of the conference call will be available at http://www.mscsoftware.com/ir/. The teleconference replay will be available for 48 hours and can be accessed by dialing in to: U.S. (800) 642-1687 or Intl. (706) 645-9291 using the conference ID code: 55221048.
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