Msc.Software (NYSE:MNS)
Historical Stock Chart
From Oct 2019 to Oct 2024
MSC.Software Reports Preliminary Fourth Quarter and Year End Financial Results
SANTA ANA, Calif., Feb. 18 /PRNewswire-FirstCall/ -- MSC.Software Corp. , the
leading global provider of virtual product development (VPD) products including
simulation software and services, today announced preliminary financial results
for the fourth quarter and fiscal year ended December 31, 2003.
Fourth quarter highlights include:
* Revenues of $69.3 million; up 12% sequentially from Q3;
* Operating margin at 9.2%, improved from 4.5% in Q3;
* Income from continuing operations of $3.3 million or
$0.09 per diluted share.
Fiscal year 2003 highlights include:
* Revenues of $253.2 million, up 2% over FY 2002;
* Loss from continuing operations of $240,000 or ($0.01) per diluted
share;
* Key balance sheet items include $49 million in cash and investments,
and $69 million in deferred revenue.
Note on Preliminary Results
The preliminary fourth quarter and year end results are subject to the final
resolution of MSC.Software's foreign pension liability. The final resolution of
this item is not expected to have an adverse impact on the fourth quarter or
year-end financial results.
Conference Call
MSC.Software's conference call to discuss the preliminary fourth quarter results
will be Webcast live today at 8:30 a.m. Pacific (11:30 am Eastern) and can be
accessed from the Company's website at http://www.mscsoftware.com/ir . It can
also be accessed through thefollowing dial-in numbers: US - (800) 374-0151 or
Intl. - (706) 634-4981. An archived version of the conference call will be
available at the Company's website. Upon completion of the conference call, a
conference call replay will also be available for 48 hours at: US - (800)
642-1687 or Intl. - (706) 645-9291 using the conference ID code: 5157903.
For the fourth quarter ended December 31, 2003, MSC.Software reported revenue of
$69.3 million, compared to $72.5 million for the fourth quarter last year. The
reported income from continuing operations for the fourth quarter was $3.3
million or $0.09 per diluted share compared to $3.0 million or $0.10 per diluted
share in the fourth quarter last year.
For the fiscal year ended December 31, 2003, MSC.Software reported revenue of
$253.2 million compared to $248.2 million in fiscal 2002, an increase of 2%. The
loss from continuing operations for the fiscal year 2003 was $240,000 or ($0.01)
per diluted share compared to a loss from continuing operations of $11.0 million
of ($0.37) per diluted share for fiscal 2002. For the fiscal year ended
December 31, 2003, restructuring, impairment charges and debt prepayment costs
totaled $6.9 million, net of tax, or the equivalent of $0.20 per diluted share.
For the fiscal year ended December 31, 2002, restructuring, impairment charges
and the write-off of acquired IPR&D totaled $11.0 million, net of tax, or the
equivalent of $0.37 per diluted share.
"The fourth quarter results reinforce the fact that MSC.Software is focused and
is executing according to plan and that our key business, product and financial
indicators are moving in a positive direction," said Frank Perna, chairman and
CEO of MSC.Software. "We continue to see steady incremental revenue from major
aerospace programs like the Boeing 7E7 and Lockheed's F-35 Joint Strike Fighter.
We also had an excellent quarter in completing government-related contracts.
Major services engagements in both Europe and Asia-Pacific were ongoing with
customers including BMW and Toyota. A strong services backlog is being driven by
our customer's requirements for continual product development process
improvements. The MasterKey Token License System is building a strong
foundation for growth in our key accounts."
"We have entered into an expanded Global Strategic Alliance with IBM targeting
our joint automotive, aerospace and defense customers. This new agreement is a
validation of our VPD strategy and we have already submitted joint proposals to
some of our largest customers."
"During the quarter, we had seven significant product releases and are seeing
opportunities in the pipeline related to our newer product offerings including
Simulation Data Management, SimDesigner and MSC.Robust Design. The adoption of
the MasterKey Token License System and the overwhelmingly positive feedback for
MSC.Nastran 2004 give us confidence that our integrated product offerings will
drive increased usage of VPD products and services."
"Our customer base is showingindications that both interest and funding for new
projects is increasing. Deferred revenue and maintenance revenue are increasing
and we saw an overall improvement in our operating margins to 9.2% in Q4. We
are very much looking forward to increasing our operating leverage and momentum
into 2004 and 2005 as manufacturers around the world continue to embrace VPD."
Americas
In the Americas, revenue was $23.2 million in the fourth quarter and $87.5
million for the fiscal year ended December 31, 2003. In the fourth quarter, 61
transactions over $100,000 were signed, and the total number of new accounts
increased by 195. Key software and service transactions completed in the quarter
included Bell Helicopter, Boeing, Caterpillar, GE Power, NASA, and TI
Automotive.
Europe
MSC.Software's European revenue was $24.4 million in the fourth quarter and
$84.5 million for fiscal 2003. In the fourth quarter, the total number of new
accounts increased by 24 and the number of transactions over $100,000 totaled
31. Key software and service engagements were signed with Airbus, Audi, SAAB,
Alenia, EADS, and Volkswagen.
Asia-Pacific
The Asia-Pacific region reported revenue of $21.7 million in the fourth quarter
and $81.2 million in fiscal 2003. In the fourth quarter, the total number of new
customer accounts increased by 91. In the fourth quarter 46 transactions over
$100,000 were signed in the region. Key software and service contracts were
signed with FHI Gunma and Nittan Valve in Japan, Singapore Air Force, Petronas
Research in Malaysia, GE Transportation in India, and Chery Automobile Company
in the PRC.
Outlook
Based on current visibility, the Company expects first quarter revenue to be in
the range of $63 million to $66 million and earnings to be in the range of $0.04
to $0.07 per diluted share. The Company expects revenue for FY 2004 to be in the
range of $260 million to $280 million and earnings to be in the range of $0.35
to $0.45 per diluted share.
About MSC.Software Corporation
MSC.Software (NYSE:MNS) is the leading global provider of virtual product
development (VPD) products including simulation software and services that help
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 and services. 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/ .
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 todiffer materially from those described in
the forward-looking statements. Other factors which could cause such results to
differ materially from those described in the forward-looking statements include
delays in developing, completing, or shipping newor 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.
(Financial Tables Follow)
MSC.SOFTWARE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in Thousands, Except Per Share Amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
REVENUE:
Software $42,204 $47,675 $150,632 $160,361
Services 27,101 24,835 102,582 87,790
Total Revenue 69,305 72,510 253,214 248,151
COST OF REVENUE:
Software 6,849 5,182 21,835 22,468
Software - Impairment of
Capitalized Development
Costs - - 782 4,751
Services 14,020 14,992 54,721 54,299
Total Cost of Revenue 20,869 20,174 77,338 81,518
GROSS PROFIT 48,436 52,336 175,876 166,633
OPERATING EXPENSE:
Research and Development 6,400 7,823 27,156 25,397
Selling, General and
Administrative 33,787 33,503 126,135 131,871
Restructuring and Other
Impairment Charges - - 4,231 9,064
Write-Off of Acquired In-
Process R&D - - - 2,380
Amortization of Intangibles 1,874 1,918 7,584 6,574
Total OperatingExpense 42,061 43,244 165,106 175,286
OPERATING INCOME (LOSS) 6,375 9,092 10,770 (8,653)
OTHER EXPENSE
Interest Expense 1,153 3,503 5,652 7,443
Other Expense (Income), Net (1) 765 5,347 165
Total Other Expense, Net 1,152 4,268 10,999 7,608
INCOME (LOSS) FROM CONTINUING
OPERATIONS
BEFORE PROVISION (BENEFIT)
FOR INCOME TAXES 5,223 4,824 (229) (16,261)
Provision (Benefit) for Income
Taxes 1,933 1,826 11 (5,247)
INCOME (LOSS) FROM CONTINUING
OPERATIONS 3,290 2,998 (240) (11,014)
DISCONTINUED OPERATIONS
Income (Loss) from
Discontinued Operations,
Net of Tax (231) (721) (2,582) (1,015)
Loss from Disposal of
Discontinued Operations,
Net of Tax - - (20,686) -
TOTAL LOSS FROM
DISCONTINUED OPERATIONS (231) (721) (23,268) (1,015)
INCOME (LOSS) BEFORE
CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 3,059 2,277 (23,508) (12,029)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE - - - (39,300)
NET INCOME (LOSS) $3,059 $2,277 $(23,508) $(51,329)
BASIC EARNINGS (LOSS) PER
SHARE
FROM CONTINUING OPERATIONS $0.11 $0.10 $(0.01) $(0.37)
DILUTED EARNINGS (LOSS) PER
SHARE
FROM CONTINUING OPERATIONS $0.09 $0.10 $(0.01) $(0.37)
BASIC EARNINGS (LOSS) PER
SHARE
FROM DISCONTINUED OPERATIONS $(0.01) $(0.02) $(0.77) $(0.04)
DILUTED EARNINGS (LOSS) PER
SHARE
FROM DISCONTINUED OPERATIONS $(0.01) $(0.02) $(0.77) $(0.04)
BASIC AND DILUTED LOSS PER
SHARE
FROM CUMULATIVE CHANGE $0.00 $0.00 $0.00 $(1.34)
BASIC EARNINGS (LOSS) PER
SHARE $0.10 $0.08 $(0.78) $(1.75)
DILUTED EARNINGS (LOSS) PER
SHARE $0.08 $0.08 $(0.78) $(1.75)
Basic Weighted-Average Shares
Outstanding 30,348 29,730 30,102 29,379
Diluted Weighted-Average
Shares Outstanding 42,694 30,194 30,102 29,379
MSC.SOFTWARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Amounts in Thousands)
December 31, December 31,
2003 2002
ASSETS
Cash and Investments $48,534 $34,564
Trade Accounts Receivable, Net 73,691 60,896
Current Assets of Discontinued
Operations 384 38,341
Other Current Assets 43,797 35,576
Total Current Assets 166,406 169,377
Property and Equipment, Net 29,863 34,888
Capitalized Software Costs, Net 28,322 25,957
Goodwill and Other Intangible
Assets, Net 237,212 246,382
Long-term Assets of Discontinued
Operations - 19,029
OtherAssets 23,233 11,641
Total Assets $485,036 $507,274
LIABILITIES AND SHAREHOLDERS'
EQUITY
Accounts Payable $10,679 $9,919
Current Portion of Long-Term Debt - 13,750
Current Portion of Notes Payable to
Shareholders - 4,590
Deferred Revenue 69,392 67,327
Restructuring Reserve 1,229 4,105
Current Liabilities of Discontinued
Operations 3,330 24,868
Other Current Liabilities 34,938 37,029
Total Current Liabilities 119,568 161,588
Deferred Income Taxes 21,700 29,243
Long-Term Debt, Less Current
Portion - 40,104
Notes Payable to Shareholders 4,677 10,536
Subordinated Convertible Debentures 100,000 -
Subordinated Notes Payable, Less
Current Portion 7,015 6,817
Long-Term Liabilities of
Discontinued Operations - 9,344
Other Long-Term Liabilities 8,438 7,162
Total Liabilities 261,398 264,794
Total Shareholders' Equity 223,638 242,480
Total Liabilities and
Shareholders' Equity $485,036 $507,274
DATASOURCE: MSC.Software Corp.
CONTACT: investor, Joanne Keates, Vice President, Investor Relations,
+1-714-444-8551, , or media, Todd Evans,
Corporate Communications, +1-714-445-3066,
Web site: http://www.mscsoftware.com/
http://www.mscsoftware.com/ir