CIMdata PLM Industry Summary Online Archive
7 February 2008
Financial News
Moldflow Reports Second Quarter Fiscal 2008 Results
Moldflow Corporation announced results from its continuing operations for the second quarter of its 2008 fiscal year. The Company disposed of its Manufacturing Solutions business division on June 30, 2007; therefore, results from all prior periods have been reclassified to solely reflect the Company’s continuing operations.
• Revenue of $17.1 million was up 19% from the corresponding quarter of fiscal 2007.
• Total product revenue of $8.9 million represented a 17% increase from the same period of the prior year.
• Total services revenue of $8.2 million represented a 22% increase from the same period of the prior year.
• Non-GAAP operating margin grew to 25%, up from 17% in the same period of the prior year.
• EBITDA was $4.7 million, up 59% on a year-over-year basis.
• Non-GAAP tax rate of 18% compared to a rate of 22% in the same period of the prior fiscal year.
• Non-GAAP net income from continuing operations of $4.4 million represented a 71% increase from the results of the corresponding quarter of fiscal 2007.
• Non-GAAP earnings per diluted share of $0.35 increased from $0.21 in the same period of the prior year.
• Net income from continuing operations as reported in accordance with GAAP was $3.8 million or $0.31 per diluted share, and included a net charge of $605,000 for share-based compensation expense, and compared to $2.2 million or $0.18 per diluted share for the prior year, which included a net charge of $386,000 for share based compensation expense.
• Our operating activities from continuing operations generated $882,000 of cash during the second quarter, up significantly from $242,000 generated the same period of the prior year.
“The results of our second quarter show the continued progress we are making towards our corporate goals for fiscal 2008. In fact, our first half has delivered strong results which are at the high end of our expectations for this point in our fiscal year, and are trending towards the higher end of our stated guidance range for the 2008 fiscal year,” said Roland Thomas, Moldflow Corporation’s president and CEO.
Thomas continued, “Once again this quarter, we saw very strong sales performances coming out of Asia driven largely by sales into the electronics sector, as well as modest increases in revenue coming from both Europe and the Americas. In the second half of fiscal 2007, we embarked upon a strategy to deliver products better suited to broad deployment of our technology within our customer’s existing infrastructures. We call this approach ‘Enterprise Enabled Simulation,’ which involves the strategic creation of technologies that are accessible, configurable and process integrated. There are several facets to this strategy, but one key element is the introduction of a concurrent usage licensing option in our flagship Moldflow Plastics Insight product line. We call this new licensing option MPI-Enterprise, or MPI-e.”
“During the first half of fiscal 2008, we began to see momentum grow behind the sales efforts of MPI-e, validating this vision. Providing this licensing option has increased sales into our customers with a worldwide footprint who need options in how they deploy our technologies across their enterprises. We believe that the MPI-e licensing model will not only help us increase sales into our customers, but will also allow us to gain further market penetration with some of the modules of Moldflow Plastics Insight that have not been as widely licensed on a stand-alone basis,” Thomas concluded.
Business Outlook
The Company is providing full year fiscal 2008 guidance on its results from continuing operations below on both a GAAP and non-GAAP basis. Non-GAAP guidance excludes estimated charges for share-based compensation costs. Because there are significant limitations in estimating the impact of share-based compensation costs and related taxes, the tax benefits and estimated charges associated with share-based issuances are unpredictable. For these reasons, the actual impact of share-based compensation on our financial results may differ materially from the estimated amounts included in the guidance below.
The current business outlook is based on information as of February 7, 2008 and is current as of that day only. For our full fiscal 2008 year we expect revenue to grow in the range of 10% to 13% when compared to fiscal 2007. We expect EBITDA from continuing operations to grow in the range of 13% to 20% in fiscal 2008 when compared to fiscal 2007. We expect non-GAAP net income per diluted share from continuing operations of approximately $0.94 to $1.00, based upon an estimated 12.1 million diluted shares. Non-GAAP net income per diluted share excludes charges for share-based compensation expenses which are expected to be approximately $1.8 million, net of related tax effects, and assumes an effective tax rate of approximately 21%. GAAP net income per diluted share from continuing operations for fiscal 2008 is expected to be between $0.78 and $0.84 based upon an estimated 12.1 million diluted shares. This GAAP estimate assumes an annual effective tax rate of approximately 25%.
Use of Non-GAAP Financial Measures
The Company has provided non-GAAP tax rate, non-GAAP net income from continuing operations, non-GAAP net income per diluted share from continuing operations and EBITDA as supplemental measures regarding the Company’s operating performance. Our non-GAAP tax rate, non-GAAP net income from continuing operations and non-GAAP net income per diluted share from continuing operations exclude the impact of share-based compensation expense and, therefore, have not been calculated in accordance with GAAP. EBITDA is defined as GAAP net income from continuing operations plus any interest expense, income taxes, depreciation, amortization and share-based compensation expense less interest earned and, therefore, has not been calculated in accordance with GAAP. Moldflow is presenting these measures because management uses this information in evaluating the results of the Company’s operations and for internal planning and forecasting purposes and believes that this information provides additional insight into our operating results, as well as enables comparison of these results to prior periods. These measures should not be considered an alternative to measurements required by GAAP, such as net income from continuing operations and net income per diluted share from continuing operations, and should not be considered a measure of our liquidity. In addition, these non-GAAP financial measures may not be comparable to similar measures reported by other companies. With respect to the non-GAAP financial measures for the second quarter of the 2008 fiscal year and as presented in our business outlook for fiscal 2008, the GAAP financial measures most directly comparable to each non-GAAP financial measure used or discussed in this press release and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the Investors page of the Moldflow Web site at http://www.moldflow.com/stp/english/investors/index.htm.
Information Dissemination
Moldflow will host a conference call to discuss the second quarter of fiscal 2008 year results as well as future outlook at 11:00 a.m. US Eastern time, Thursday, February 7, 2008. The call will be recorded with replay (dial-in # 800-642-1687, PIN# 32298612) which will be available until February 14, 2008. In addition, a live Webcast of the conference call, together with this press release and supplemental financial information, can be accessed through the Company’s website at http://www.moldflow.com in the Investors section. The call, press release and supplemental information will be archived and can be accessed through the same link.
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