CIMdata PLM Industry Summary Online Archive
26 February 2009
Financial News
MSC.Software Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2008
MSC.Software Corporation reported results for the fourth quarter and year ended December 31, 2008. Financial highlights include the following:
Fourth quarter:
• Total fourth quarter revenue of $65.0 million, with software revenue of $24.7 million, maintenance revenue of $33.4 million and services revenue of $6.9 million,
• Fourth quarter operating loss of $4.5 million, which includes restructuring charge of $1.3 million and impairment charge related to intangible assets of $10.0 million.
Full Year:
• FY 2008 total revenue of $254.4 million versus $246.7 million last year, an increase of 3%,
• FY 2008 operating loss of $6.2 million, which includes restructuring charges of $3.3 million and impairment charges related to intangible assets of $10.0 million,
• Cash and investments at December 31, 2008 totaled $152.6 million versus $135.0 million at December 31, 2007.
Revenue
Total revenue for the fourth quarter ended December 31, 2008 was $65.0 million compared to $71.1 million for the fourth quarter in 2007. Software revenue for the fourth quarter totaled $24.7 million compared to $28.8 million for the fourth quarter in 2007. For the fourth quarter ended December 31, 2008, maintenance revenue totaled $33.4 million and services revenue totaled $6.9 million, compared to $33.3 million of maintenance revenue and $9.0 million of services revenue for the fourth quarter in 2007.
Total revenue for the year ended December 31, 2008 was $254.4 million compared to $246.7 million last year. Software revenue for 2008 totaled $89.3 million compared to $94.7 million for 2007. For the year ended December 31, 2008 maintenance revenue totaled $137.0 million and services revenue totaled $28.1 million, compared to $125.5 million of maintenance revenue and $26.5 million of services revenue for 2007.
"Although 2008 presented its challenges to MSC as we continued our strategic product transition, our simulation software solutions continue to be strategic components of our customers' product development processes," said Bill Weyand, CEO and Chairman of MSC.Software. "With a strong balance sheet and a focus on cost control we are able to weather the current uncertain and volatile economic environment."
"Our recently announced partnership with EADS, where we were chosen as the simulation backbone for their global PLM harmonization project, demonstrates the importance of MSC applications as a collaborative platform within the aerospace industry. We will continue to assist our customers in accelerating engineering innovation through collaboration and thereby saving time and money," continued Mr. Weyand.
"With the planned releases of version 4 of our multi-discipline and enterprise simulation solutions during the first half of 2009, we will strengthen our role systems integrator for all simulation software implemented by our customers today. This will allow our customers to reduce the number of software vendors and save on their overall cost of ownership."
Revenue by Geography
Total revenue in the Americas for the fourth quarter and year ended December 31, 2008 was $21.3 million and $80.3 million, respectively, compared to $22.0 million and $75.3 million for the same periods last year. Total revenue in EMEA for the fourth quarter and year ended December 31, 2008 was $22.8 million and $96.4 million, respectively, compared to $30.0 million and $95.9 million for the same periods last year. Changes in the Euro decreased EMEA revenue by $2.7 million in the fourth quarter and increased EMEA revenue by $6.2 million in FY 2008. In the Asia Pacific region, revenue for the fourth quarter and year ended December 31, 2008 totaled $20.9 million and $77.7 million, respectively, compared to $19.1 million and $75.5 million for the same periods last year. Changes in the Japanese Yen increased Asia Pacific revenue during the fourth quarter and FY 2008 by $2.7 million and $9.4 million, respectively.
Results of Operations and EPS
Total operating expenses for the fourth quarter and year ended December 31, 2008 were $58.4 million and $212.7 million, respectively, compared to $59.1 million and $210.7 million for the same periods last year. Operating loss for the fourth quarter was $4.5 million and for the year end was $6.2 million, compared to an operating loss of $1.2 million and $10.3 million for the fourth quarter and year ended December 31, 2007. Including in the operating loss are restructuring charges of $1.3 million and impairment charges related to intangible assets of $10.0 million in the fourth quarter of 2008 and restructuring charges of $3.3 million and impairment charges related to intangible assets of $10.0 million in FY 2008.
For the fourth quarter ended December 31, 2008, loss from continuing operations totaled $22.5 million or ($0.50) per diluted share, and includes a net tax charge of $17.3 million, resulting primarily from establishing a valuation allowance totaling $22.9 million. For the fourth quarter last year, income from continuing operations totaled $2.3 million or $0.05 per diluted share. For the year ended December 31, 2008, loss from continuing operations totaled $21.3 million or ($0.47) per diluted share, compared to a loss from continuing operations of $2.6 million or ($0.06) per diluted share for FY 2007.
Balance Sheet
Cash and investments at December 31, 2008 totaled $152.6 million and after the repayment of $6.5 million of certain outstanding debt in the fourth quarter, the Company had effectively no long term debt at year end. Deferred revenue totaled $75.8 million at December 31, 2008.
Outlook
The Company will discuss the outlook for 2009 on the conference call scheduled for today. See conference call details below.
Conference Call
The Company will host a conference call to discuss the fourth quarter financial results today at 1:30 pm pacific (4:30 pm eastern). 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: 82229401.
Click here for an unabridged press release that contains financial tables.
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