Msc.Software (NYSE:MNS)
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MSC.Software Expects to Restate 2001 and 2002 Financials to Make Non-Cash
Adjustments and to Revise 2003 Income From Continuing Operations; Will Delay
2003 Form 10-K Filing
SANTA ANA, Calif., March 30 /PRNewswire-FirstCall/ -- MSC.Software Corp. today
announced that it expects to restate its financial statements for 2001 and 2002
to make non-cash adjustments and expects to revise its previously announced
income from continuing operations for 2003. The Company also will delay the
filing of its 2003 Form 10-K.
The Company currently anticipates that the net effect of these revisions and
restatements, all of which are non-cash items, will be:
* the previously announced loss from continuing operations of ($240,000)
or ($0.01) per dilutedshare, for the year ended December 31, 2003
will actually be income from continuing operations of $1,246,000, or
$0.04 per diluted share;
* an increase in the loss from continuing operations of $207,000, or
$0.02 per diluted share, for the year ended December 31, 2002, from
($0.37) to ($0.39) per diluted share;
* an increase in income from continuing operations of $735,000, or
$0.03 per diluted share, for the year ended December 31, 2001, from
$0.57 to $0.60 per diluted share; and
* the net effect of all changes will increase shareholders equity as of
December 31, 2003, from $223.6 million to $224.5 million.
"The restatement for 2001-2002 and the delay in filing our financial statements
for 2003, while unfortunate, are the appropriate courses of action," said Frank
Perna, chairman and CEO, MSC.Software. "This does not change the fundamental
strength of our business and the MSC.Software executive team and board of
directors are wholly committed to continually scrutinizing and improving our
financial reporting processes and procedures."
The filing delay is related to an independent review of allegations regarding
possible withholding of information from MSC.Software's independent auditors
relating to accounting for stock options of a departing employee of a foreign
subsidiary, as well as the need to complete the audit referred to below. The
independent review is being directed by the MSC.Software audit committee and
conducted jointly by outside counsel for the Company and by separate counsel for
the audit committee.
The restatement will relate to MSC.Software's consolidated financial statements
as of and for the years ended December 31, 2001 and 2002 and the opening balance
sheetat January 1, 2001. Management of MSC.Software currently anticipates that
the revision and restatement will relate to the following matters:
* revenue recognized in the fourth quarter of 2002 that should have been
deferred as a result of MSC.Software's settlement with the FTC in
November of 2002;
* an increase in selling, general and administrative expense and
additional paid-in capital in 2002 relating to a compensation charge
as a result of the modification of stock options relating to two
departing employees;
* an increase to retained earnings as of January 1, 2001 resulting from
the reversal of a valuation reserve for capitalized software;
* decreases in the income tax provision in 2001, 2002 and 2003 related
to the tax effects of the adjustments described above and the
accounting for a deferred tax liability in connection with an
acquisition;
* recognizing an accrual for certain foreign defined benefit plans in
the applicable years rather than in 2003; and
* a decrease in goodwill in 2001 and a decrease in related impairment
charges in 2002, in each case relating to the acquisition of Advanced
Enterprise Solutions, Inc.
The restatement and these adjustments are subject to audit by MSC.Software's
independent auditors and are subject to change as part of the audit process.
Except for the historical information contained herein, certain matters
discussed in this news release constitute forward-looking statements that
involve risks and uncertainties that could cause actual results to differ
materially from those projected. Such statements are based on management's
current expectations and are subject to a number of factors and uncertainties,
which could cause actual results to differ materially from those described in
the forward-looking statements. Factors which could cause such results to
differ materially from those described in the forward-looking statements include
delays in developing, completing, or shipping new or enhanced products, the
ability to assimilate acquisitions into MSC's operations, foreign currency
translations, and other risks and uncertainties that are detailed in the
Company's annual report on Form 10-K and other reports filed by the Company with
the Securities and Exchange Commission.
Conference Call
MSC.Software will host a conference call and Webcast live today at 2:30 p.m.
Pacific (5:30 p.m. Eastern) to discuss the delay in the 2003 10-K filing. The
call can be accessed from the Company's website at
http://www.mscsoftware.com/ir. It can also be accessed through the following
dial-in number: US -- (800) 374-0151. Upon completion of the conference call,
an archived version of the conference call willbe available at the Company's
Website and a conference call replay will also be available for 48 hours at US
-- (800) 642-1687 using the conference ID code: 6540326.
About MSC.Software Corporation
MSC.Software (NYSE:MNS) is the leading global provider of simulation software
and services, that helps companies make money, save time and reduce costs
associated with designing and testing manufactured products. MSC.Software works
with thousands of companies in hundreds of industries to develop better products
faster by utilizing information technology, software, services and systems.
MSC.Software employs more than 1400 people in 23 countries. For additional
information about MSC.Software's products and services, please visit
http://www.mscsoftware.com/.
DATASOURCE: MSC.Software
CONTACT: press, Todd Evans, Media Relations, +1-714-445-3066,
, or investors, Joanne Keates, Vice-President,
Investor Relations, +1-714-444-8551, , both of
MSC.Software
Web site: http://www.mscsoftware.com/ir
Web site: http://www.mscsoftware.com/