MSC.Software Announces Certain Third Quarter Financial Information
27 Oktober 2004 - 4:00PM
PR Newswire (US)
MSC.Software Announces Certain Third Quarter Financial Information
SANTA ANA, Calif., Oct. 27 /PRNewswire-FirstCall/ -- MSC.Software
Corp. (NYSE:MNS), today announced certain financial information for
the third quarter ended September 30, 2004. As previously
disclosed, MSC.Software will restate its financial statements for
the periods subsequent to January 1, 2001. Since the Company is
unable to quantify the exact impact of the restatement on its
financial results at this time, the Company can only give limited
information regarding its third quarter results. Third Quarter
Financial Information During the third quarter, operating expenses
totaled $44.5 million, including expenses related to the Audit
Committee's independent review and CFO separation costs of
approximately $3.9 million. Net research and development expense
totaled $7.4 million compared to $6.7 million in the third quarter
last year, and $6.0 million in the second quarter ended June 30,
2004. In the third quarter, capitalized software totaled $3.2
million compared to $2.6 million in the third quarter last year and
$4.3 million in the second quarter ended June 30, 2004. Sales and
marketing expense totaled $18.7 million compared to $18.9 million
in the third quarter last year, and $19.1 million in the second
quarter ended June 30, 2004. General and administrative expense,
including expenses of approximately $3.9 million related to the
independent review and CFO separation costs, totaled $16.9 million.
Excluding these expenses in the periods, general and administrative
expense were $13.0 million in the third quarter compared to $12.3
million in the third quarter last year and $12.4 million in the
second quarter ended June 30, 2004. In the third quarter total
other expenses were $687,000. Cash and investments at the end of
the third quarter stood at $71.8 million compared to $73.2 million
at June 30, 2004 and $57.2 million at March 31, 2004. Year to date
cash flow from operations was $36.3 million. Gross accounts
receivable were $59.8 million at September 30, 2004 compared to
$59.0 million at June 30, 2004 and $75.8 million at March 31, 2004.
Days sales outstanding (DSOs) were 80 days at September 30, 2004
equal to the DSO's at June 30, 2004 which were also 80 days, and
this compares to 100 days at March 31, 2004. The global sales
pipeline, which is the sales management and revenue forecasting
tool that tracks potential customer contracts and engagements, grew
to $297 million. There is no assurance that the pipeline amounts
will result in executed contracts or revenues. In the third
quarter, the America's pipeline rose to $124 million and key
software and service transactions were signed with customers
including Northrop, Analex, AMCOR and Alcoa. In Europe, the
pipeline rose to $81 million and key software and service
engagements were signed with customers including EADS, Leyland,
Alenia, Seimens, and Bombardier. In Asia-Pacific, the pipeline
totaled $92 million and key software and service contracts were
signed with customers including Nissan, Toyota, Hero Honda Motor
(India) and TechTronic Industries (China). "Virtual Product
Development Conferences being conducted in all world regions have
given us the confidence that our solid product strategy supports
our customer requirements and our new business pipeline continues
to grow," said Frank Perna, CEO and Chairman of MSC.Software.
"Corporate spending on product development efficiencies and
innovation has positioned MSC's SimOffice, SimDesigner and
SimManager product suites to meet the market's demand for
automation among both large aerospace and automotive companies, as
well as small- and medium-size manufacturers. "From a financial
point of view, our business remains fundamentally sound with strong
cash flows and $72 million in cash and investments on the balance
sheet. This positions us well for the rest of this fiscal year and
into 2005," continued Mr. Perna. Status of Independent Review As
previously disclosed, the Company's Audit Committee has been
directing an independent review of certain of the Company's
accounting practices and procedures. The review has principally
focused on possible withholding of information from the Company's
independent auditors, the timing of revenue recognition, the need
to restate the Company's revenues for the periods subsequent to
January 1, 2001, and the need to make certain non-cash adjustments
to the Company's financial statements. Management has cooperated
fully with the Audit Committee's review. The Audit Committee
believes the independent review is substantially complete and hopes
to receive a report from its advisors before year end. Upon
delivery of the Company's restated financial statements for January
1, 2001 to December 31, 2003 to its independent auditors and
completion of their audits, the Company expects to file amendments
to its Form 10-K's for the years ended December 31, 2001 and 2002,
as well as file its Form 10-K for the year ended December 31, 2003
and its Form 10-Q's for the subsequent quarters. No estimate can be
given regarding the exact timing of the completion of the process,
nor can any assurances be given that additional revisions or
adjustments will not be required during this process. Since the
Company is unable to quantify the exact impact of the adjustments
and restatement on its financial results at this time, the Company
is delaying the full release of its third quarter results, and the
Company's published financial statements and guidance should not be
relied upon at this time. Conference Call A conference call to
discuss third quarter results is being held today at 8:30 am PDT.
This conference call is being Webcast and can be accessed at the
following URL: http://www.mscsoftware.com/ir/, or by dialing in to
(800) 374-0151 in the U.S. or to (706) 634-4981 for International
callers. To participate in the live conference call, use the
following conference ID code: 1727485. 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 after the call at: U.S. (800) 642-1687 or
Intl. (706) 645-9291 using the conference ID code: 1727485. The
call will also be archived at http://www.mscsoftware.com/ir/ .
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 1300 people
in 22 countries. For additional information about MSC.Software's
products and services, please visit http://www.mscsoftware.com/.
DATASOURCE: MSC.Software Corp. CONTACT: Investors, Joanne Keates,
Vice President, Investor Relations, +1-714-444-8551, , or Media,
Todd Evans, Corporate Communications, +1-714-445-3066, , both of
MSC.Software Corp. Web site: http://www.mscsoftware.com/
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