CIMdata PLM Industry Summary Online Archive
4 November 2008
Financial News
MSC.Software Reports Financial Results for the Third Quarter Ended September 30, 2008
MSC.Software Corporation reported results for the third quarter ended September 30, 2008. Financial highlights include the following:
HIGHLIGHTS
Quarter ended September 30, 2008:
Total revenue of $63.7 million, an increase of 11% over the third quarter last year,
Software revenue of $21.5 million, an increase of 8% over the third quarter last year,
Maintenance revenue of $34.6 million, an increase of 9% over the third quarter last year,
Services revenue of $7.6 million, an increase of 33% over third quarter last year,
Net income of $2.3 million, and EPS of $0.05 per share.
Nine Months ended September 30, 2008:
Total revenue of $189.4 million, an increase of 8% over the same period last year,
Maintenance revenue of $103.6 million, an increase of 12% versus the same period last year,
Deferred revenue at September 30, 2008 of $77.2 million, and
Cash and Investments at September 30, 2008 of $154.2 million.
REVENUE
Total revenue for the nine months ended September 30, 2008 was $189.4 million compared with $175.6 million for the nine month period in 2007. Software revenue totaled $64.6 million in 2008 compared with $65.9 million in 2007. Maintenance revenue totaled $103.6 million and services revenue totaled $21.2 million for the first nine months of 2008, compared with $92.3 million of maintenance revenue and $17.4 million of services revenue for the nine months in 2007. Foreign exchange favorably impacted total revenue by $15.7 million in the nine months ended September 30, 2008.
"Revenue growth of 11% in the third quarter indicates better acceptance of our business across both SimEnterprise and MD solutions, as well as increases in maintenance revenue and services activities," said Bill Weyand, CEO and Chairman of MSC.Software. "With our enterprise solutions being deployed under multi-phase, multi-year implementation programs, we believe this can provide a good base of business for us going forward."
"While we are mindful of the global macroeconomic environment, we believe a number of important factors will allow MSC to weather this storm," said Bill Weyand, CEO and Chairman of MSC.Software. "As a software company with more than 45 years serving the aerospace and automotive industries, we have seen these cycles before and we know how our customers behave. We believe they will look at their internal processes to improve productivity by reducing physical prototype testing in order to save costs, speed time to market and accelerate product innovation. However, we believe that a prolonged economic downturn could adversely impact our customers, IT spending patterns, and thereby our business as well."
"SimEnterprise releases in the third quarter are enhanced with features that address industry specific requirements related to a number of simulation technologies including composites, advanced materials, collaboration and multi-discipline analysis. In addition these releases have features designed to support and demonstrate the value of SimEnterprise in new industries such as packaging and consumer goods," continued Mr. Weyand.
REVENUE BY GEOGRAPHY
Total revenue in the Americas for the third quarter and nine months ended September 30, 2008 was $20.3 million and $59.0 million, respectively, compared with $17.6 million and $53.2 million last year. Total revenue in EMEA for the third quarter and nine months ended September 30, 2008 was $25.3 million and $73.6 million, respectively, compared with $21.5 million and $65.9 million last year. Changes in the Euro increased EMEA revenue by $2.6 million in the quarter and $9.0 million in the nine month period. In the Asia region, revenue for the third quarter and nine months ended September 30, 2008 totaled $18.1 million and $56.8 million, respectively, compared with $18.1 million and $56.4 million last year. Changes in the Japanese Yen increased Asia revenue by $2.0 million in the quarter and $6.7 million in the nine months.
RESULTS OF OPERATIONS AND EPS
Total operating expenses for the third quarter ended September 30, 2008 were $48.1 million, compared with $46.3 million last year. Foreign currency impacts increased total operating expenses by $1.9 million in the third quarter of 2008. Operating income for the third quarter was $3.0 million, which compares with operating income of $0.4 million in the third quarter last year. This quarter's operating expenses included $1.1 million of restructuring and other charges and the third quarter last year included $0.8 million of restructuring and other charges. Income from continuing operations for the quarter totaled $2.3 million or $0.05 per diluted share, compared with $0.1 million in the third quarter last year.
Total operating expenses for the nine months ended September 30, 2008 were $154.3 million, compared with $151.6 million last year. Foreign currency impacts increased total operating expenses by $7.6 million in the nine month period of 2008. The operating loss for the nine month period was $1.8 million, compared with an operating loss of $9.1 million in the nine month period last year. The operating loss for the first nine months of 2008 included $2.0 million of restructuring charges and for the nine month period ended September 30, 2007 included $8.6 million of restructuring and other charges. Net income from continuing operations for the nine months totaled $1.2 million or $0.03 per diluted share, compared with a loss of $4.9 million or ($0.11) per diluted share in the nine months last year.
CONFERENCE CALL
The Company will host a conference call to discuss the third quarter financial results today at 8:00 am pacific (11:00 pm eastern). The third 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: 68570574.
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: 68570574.
For additional information about MSC.Software's products and services, please visit www.mscsoftware.com.
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