Moldflow Reports Fourth Fiscal Quarter and Fiscal 2002 Year End Results

WAYLAND, Mass. - Aug. 1, 2002 - Moldflow Corporation (NASDAQ: MFLO), the world leader in software solutions for optimizing the design and manufacture of plastic products, today announced the results for its fourth quarter and fiscal year ended June 30, 2002. Fourth quarter revenues of $8.3 million were down 14% from the corresponding quarter of fiscal 2001. Revenues for the year ended June 30, 2002 were $35.1 million, a 12% decrease from fiscal 2001.

Pro forma net loss for the fourth quarter was $222,000, or $0.02 per share, compared to pro forma net income of $512,000, or $0.05 per diluted share in the same quarter of the prior year. Pro forma net income for fiscal 2002 was $1.0 million, or $0.09 per diluted share. Pro forma net income (loss) excludes non-cash amortization expense of intangible assets and, in the current fiscal quarter, excludes a non-recurring charge of $1.3 million associated with restructuring actions taken in the quarter, a $446,000 non-recurring gain on a fiscal 2000 acquisition escrow settlement, and tax effects related to pro forma items.

The Company's reported net loss for the fourth quarter of fiscal 2002 of $849,000, or $0.08 per share, compared to reported net income of $134,000, or $0.01 per diluted share, during the same quarter of fiscal 2001. Net income for the year ended June 30, 2002 was $780,000, or $0.08 per diluted share, compared to $3.5 million, or $0.35 per diluted share in the prior year.

Product revenues for the fourth quarter of fiscal 2002 were $3.9 million, down from the same quarter of fiscal 2001 by 26%. In the quarter, revenues from Manufacturing Solutions products represented 18% of total product revenues, up from 10% in the same quarter a year ago, while revenues from Design Solutions products accounted for 82% of total product revenues. Services revenues, primarily comprised of maintenance and support contracts, were up 2% from the fourth quarter of fiscal 2001 at $4.4 million. On a regional basis, revenues in Europe represented 37% of Moldflow's total revenues for the fourth quarter of fiscal 2002, while revenues in the Asia Pacific and Americas regions represented 33% and 30%, respectively.

During the fourth quarter of fiscal 2002, Moldflow generated $1.4 million in cash from operations, including $470,000 of cash received from the escrow settlement and after the payment of $475,000 of restructuring related costs. Capital asset additions totaled $450,000 in the fourth fiscal quarter. As of June 30, 2002, the Company had $50.9 million in cash and marketable securities and no long-term debt.

The Company had a total of 246 employees at June 30, 2002, of which 37 were sales representatives, 69 were in research and development, with the remainder employed in sales management, marketing, customer support, and general and administrative functions.

Moldflow's financial results included sales to companies across diverse industries and geographies, including sales to customers in the automotive, medical, electronics, consumer goods, material supplier and molding industries. Orders were received during the quarter from notable customers such as Becton Dickinson, Tyco Healthcare, Classic Industries, Nikon Corporation, Kyowa Industrial Corporation, Cheng UEI Precision, BASF, DuPont, Hewlett Packard Corporation, Ticona, Valeo and NK Manufacturing. In total, 112 new customers were added during the quarter.

Roland Thomas, Moldflow's president and CEO, said, "The fourth quarter, and indeed, fiscal 2002, was a challenging period for our Company and the entire software industry. Many of our customers have seen their end markets contract as the world manufacturing economy slowed throughout the year. Recognizing this trend, we took a number of steps which position the Company well for the time when capital spending resumes and growth returns to our customer's end markets. For example, when it became clear that a recovery wasn't just "around the corner", we implemented a restructuring of our business, resulting in a reduction in our operating expenses of approximately 6% from the prior quarter. These actions allowed us to lower our cash breakeven point while preserving our investment in the intellectual capital that has allowed us to remain the market leader in our space."

Thomas continued, "We remained on track with our product release schedule which included the release of Moldflow Plastics Advisers(TM)

6. 0 in May. This release brought significant new features and enhancements to the product that help users more efficiently identify and address critical quality issues in the earliest stages of part and mold design. During the course of fiscal 2002, we had a number of other significant product releases, including Moldflow Plastics Insight(TM) 3.0. This product is the combination of the best of the Moldflow and C-Mold product lines, and has been enthusiastically adopted by the majority of our customers. We also delivered on our promise of a single hardware platform for the combination of Shotscope(R) and Moldflow Plastics Xpert(R), which results in a lower implementation cost for our customers. We are pleased by the traction that these products are gaining, evidenced by the growth in revenues from our Manufacturing Solutions products of 68% over last fiscal year."

Thomas concluded, "Our financial results for the quarter are a reflection of the continued weakness in the manufacturing sector. While we closed a number of important customer orders during the quarter, particularly for our Manufacturing Solutions products, it is clear to us that corporate spending in our markets has not yet returned to historic levels, and in fact may still be declining. We saw particular strength in the medical instruments sector during the fourth quarter, however, we experienced weakness in the consumer and electronics markets. As we entered this new fiscal year, we were cautiously optimistic about a recovery, however, there continue to be mixed indicators of the short-term view. As a result, we do not anticipate meaningful growth in revenues in the near term. Therefore, we will manage the business with the discipline appropriate for the climate while being protective of our intellectual assets."

Business Outlook

Based on current visibility, Moldflow expects revenues for the first fiscal quarter of 2003 to be approximately $8.0 million. Fiscal first quarter pro forma earnings per diluted share, which excludes non-cash amortization expense, is expected to be in the range of breakeven to a net loss per share of $0.03.

Financial Results

The unaudited condensed consolidated financial statements for the fourth fiscal quarter and the year ended June 30, 2002 follow.

Information Dissemination

Moldflow webcasts our conference calls to assure the broad dissemination of information in real time and to provide all interested parties access to its quarterly conference call in which management will discuss the fourth quarter of fiscal year 2002 financial results and our future business outlook. To access today's conference call, which is scheduled for 5:00 p.m. US Eastern Time, log on to the Company's web site at www.moldflow.com. The call will be available in the Presentations section on the Investor Information portion of the site until August 8, 2002.

About Moldflow Corporation

Moldflow (NASDAQ: MFLO) is the world's leading provider of software products and services to increase the speed, efficiency, quality and cost savings of the design and manufacture of injection molded plastic products. Companies use Moldflow's complete suite of products to address plastic part design issues at the earliest possible stage as well as to maximize productivity and profitability on the manufacturing floor. Our collaboration with academia, industry and customers around the world has led to a reputation for constant innovation in the complete design-to-manufacture process. Headquartered in Wayland, Massachusetts, Moldflow has offices and research and development centers in the United States, Europe, Australia and the Asia Pacific region. 

www.moldflow.com 

 

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