SANTA ANA, Calif., May 7, 2008 (PRIME NEWSWIRE) -- MSC.Software Corporation (Nasdaq:MSCS), a leading global provider of enterprise simulation solutions including simulation software and services, today reported results for the first quarter ended March 31, 2008. Financial highlights include the following:
* Revenue of $61.2 million, an increase of 6% over the first quarter last year, * Maintenance revenue of $33.0 million, up 15% over last year, * Deferred revenue grew to $94.4 million, up 17% compared to $80.6 million at December 31, 2007, and * Cash and Investments increased 10% from $135.0 million at December 31, 2007 to $148.1 million at March 31, 2008.
REVENUE
Total revenue for the first quarter ended March 31, 2008 was $61.2 million compared to $57.6 million for the first quarter in 2007. Software revenue for the first quarter totaled $22.0 million compared to $23.0 million for the first quarter in 2007. For the first quarter ended March 31, 2008, maintenance revenue totaled $33.0 million and services revenue totaled $6.2 million, compared to $28.7 million of maintenance revenue and $5.9 million of services revenue for the first quarter in 2007. Foreign exchange favorably impacted total revenue by $5.2 million in the first quarter.
"In the first quarter we saw a number of key customers move from initial pilot installations to global deployments of our enterprise solutions," said Bill Weyand, CEO and Chairman of MSC.Software. "It is clear that our customers see the competitive advantage and excellent ROI value in deploying MSC's enterprise solutions in their global enterprises and simulation enterprise solutions, which represented 28% of total software revenue in the first quarter."
"We are pleased with more consistent growth in maintenance revenue as our installed base of customers continues to see the business value in MSC's solutions, and our consulting services business has stabilized and is delivering value," continued Mr. Weyand. "Product launches scheduled for May and June will provide, in the long term, new business opportunities with our customers, as we build on our foundation and extend simulation to the enterprise."
REVENUE BY GEOGRAPHY
Total revenue in the Americas for the first quarter ended March 31, 2008 was $18.5 million, compared to $18.4 million last year. Total revenue in EMEA for the first quarter ended March 31, 2008 was $23.6 million, compared to $19.7 million last year. Changes in the Euro increased EMEA revenue by $2.9 million. In the Asia Pacific region, revenue for the first quarter ended March 31, 2008 totaled $19.1 million, compared to $19.6 million last year. Changes in the Japanese Yen increased Asia Pacific revenue by $2.3 million.
RESULTS OF OPERATIONS AND EPS
Total operating expenses for the first quarter ended March 31, 2008 were $53.7 million, compared to $59.4 million last year, a decrease of 10%. Total operating expenses were increased by $2.6 million due to the impact of foreign currency exchange. The operating loss for the first quarter was $4.5 million, which compares to an operating loss of $13.4 million in the first quarter last year. Last year's operating loss included $7.1 million of restructuring charges. The loss from continuing operations for the quarter totaled $2.2 million or ($0.05) per diluted share, compared to a loss from continuing operations of $6.4 million or ($0.15) per diluted share in the first quarter last year.
GUIDANCE
At this time the Company will not issue guidance. The Company will continue to evaluate its decision to provide guidance in the future.
CONFERENCE CALL
The Company will host a conference call to discuss the first quarter financial results today at 1:30 pm pacific (4:30 pm eastern). The first 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: 43801658.
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: 43801658.
About MSC.Software Corporation
MSC.Software Corporation (Nasdaq:MSCS) is a leading global provider of enterprise simulation solutions, including 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 and services. MSC.Software employs more than 1100 people in 21 countries. For additional information about MSC.Software's products and services, please visit www.mscsoftware.com.
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including, without limitation, statements regarding our expectations, beliefs, intentions or strategies regarding the future. All forward-looking statements included in this press release are based on information available to us on the date hereof. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to differ materially from those implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "targets," "goals," "projects," "continue," "preliminary," "guidance," or variations of such words, similar expressions, or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Neither we nor any other person can assume responsibility for the accuracy and completeness of forward-looking statements. Important factors that may cause actual results to differ from expectations include, but are not limited to, those discussed in "Risk Factors" on our 2007 Form 10-K filed with the Securities and Exchange Commission. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
PRELIMINARY
MSC.SOFTWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
Three Months
Ended March 31,
----------------------
2007 2008
----------------------
Revenue:
Software $ 23,003 $ 21,959
Maintenance 28,782 33,029
Services 5,864 6,222
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Total Revenue 57,649 61,210
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Cost of Revenue:
Software 3,092 2,463
Maintenance and Services 8,555 9,572
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Total Cost of Revenue 11,647 12,035
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Gross Profit 46,002 49,175
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Operating Expenses:
Research and Development 13,205 14,366
Selling and Marketing 20,237 23,644
General and Administrative 18,673 15,186
Amortization of Intangibles 175 336
Restructuring and Other Charges 7,097 139
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Total Operating Expenses 59,387 53,671
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Operating Loss (13,385) (4,496)
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Other (Income) Expense :
Interest Expense 281 278
Other Income, net (1,074) (995)
--------- ---------
Total Other Income, net (793) (717)
--------- ---------
Loss From Continuing Operations Before
Benefit For Income Taxes (12,592) (3,779)
Benefit For Income Taxes (6,167) (1,573)
--------- ---------
Loss From Continuing Operations (6,425) (2,206)
--------- ---------
Total Income From Discontinued Operations,
net of Income Taxes 175 --
--------- ---------
Net Loss $ (6,250) $ (2,206)
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Basic and Diluted Loss Per Share From
Continuing Operations $ (0.15) $ (0.05)
Basic and Diluted Earnings Per Share From
Discontinued Operations $ -- $ --
Basic and Diluted Loss Per Share $ (0.14) $ (0.05)
Basic Weighted-Average Shares Outstanding 43,533 44,752
Diluted Weighted-Average Shares Outstanding 43,533 44,752
MSC.SOFTWARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share value amounts)
December 31, March 31,
2007 2008
----------------------
ASSETS
Cash and Investment $ 135,029 $ 148,050
Trade Accounts Receivable, less Allowance
for Doubtful Accounts of $1,855 and
$1,991, respectively 70,204 63,217
Property and Equipment, Net 18,900 18,364
Goodwill, Indefinite Lived & Other
Intangibles 195,311 196,713
Other Assets 47,701 54,041
--------- ---------
Total Assets $ 467,145 $ 480,385
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LIABILITIES AND SHAREHOLDERS' EQUITY
Deferred Revenue $ 80,584 $ 94,405
Long-Term Debt 6,936 6,981
Other Liabilities 60,215 57,317
--------- ---------
Total Liabilities 147,735 158,703
--------- ---------
--------- ---------
Net Shareholders' Equity 319,410 321,682
--------- ---------
--------- ---------
Total Liabilities and Shareholders' Equity $ 467,145 $ 480,385
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