CIMdata PLM Industry Summary Online Archive

15 November 2005

Financial News

MatrixOne Reports Financial Results for First Quarter of Fiscal 2006

MatrixOne, Inc. announced financial results for the first quarter ended October 1, 2005.

For the first quarter ended October 1, 2005, total revenues were $25.4 million, compared to $28.7 million in the same period last year. For the first quarter, net loss was $7.2 million, or $0.14 per share, compared to a net loss of $2.5 million, or $0.05 per share, in the same period last year. For the first quarter ended October 1, 2005, adjusted net loss(1), which excludes amortization of intangible assets and stock-based compensation charges of $0.8 million, was $6.4 million, or $0.12 per share. For the first quarter ended October 2, 2004, adjusted net loss(1), which excludes amortization of intangible assets of $0.2 million, was $2.3 million, or $0.05 per share. Net loss and adjusted net loss for the first quarter ended October 1, 2005 includes expenses of $1.4 million, or $0.03 per share, related to the Company's recently completed financial review and restatement.

Total current and long-term deferred revenues as of October 1, 2005 were $45.6 million, compared to $32.2 million and $42.2 million as of October 2, 2004 and July 2, 2005, respectively. During the three month period ended October 1, 2005, the Company deferred software license, professional services and maintenance and customer support services revenues related to delivery of software and commitments to provide software functionality to certain customers aggregating approximately $3.4 million and deferred software license and maintenance and customer support services revenues related to a software license transaction that included extended payment terms related to a transaction aggregating approximately $2.4 million. In addition, the year-over-year increase in deferred revenues also reflects the impact of certain matters related to the Company's recently completed financial review and restatement.

The following milestones were completed or announced during the first quarter of fiscal 2006:

•  The Company received orders from a number of the world's most innovative companies, including Conexant, a global supplier in semiconductor solutions for broadband communications and the digital home; Faurecia, a tier-1 automotive supplier headquartered in France; Keppel Offshore & Marine, a provider in offshore rigs, shipbuilding and ship conversion and repair; Swift & Company, the world's second-largest processor of fresh beef and pork products; and Ortho-Clinical Diagnostics, a Johnson & Johnson company and provider of high-value diagnostic products and services for the global health care community.

•  The Company was awarded a patent from the United States Patent and Trademark Office for an "Interface Definition Language Compiler" invented by Mr. Dave Tewksbary, the Company's Vice President of Advanced Research. The compiler is software code that enables the Company to support multiple customer environments without writing additional code for more effortless deployments and greater cost savings. The code enables the Company's solutions to interact with several computer architectures and codes, including Extensible Markup Language (XML), Enterprise Java Beans (EJB) and Remote Method Invocation (RMI).

•  The Company received certification by Autodesk® for an integration between Autodesk Inventor® and the MatrixOne® PLM platform as part of the Company's newly released MatrixOne Designer CentralT, a comprehensive design data management application that allows a company's product designers to collaborate with each other and with their suppliers in a single system-regardless of the design tools being used by each partner. Autodesk Inventor is the world's best selling 3-D mechanical design software.

(1) The Company uses the financial measure adjusted net income (loss) to supplement its consolidated financial statements, which are presented in accordance with accounting principles generally accepted in the United States ("GAAP"). The presentation of adjusted net income (loss) is not meant to be a substitute for net income (loss) presented in accordance with GAAP but rather should be evaluated in conjunction with net income (loss). A full reconciliation of adjusted net loss to net loss is provided below. The Company's management believes that the presentation of adjusted net income (loss) provides useful information to investors because this financial measure excludes amortization of purchased technology and intangible assets, which are fixed acquisition-related charges and stock-based compensation. For the three month period ended October 1, 2005, adjusted net income (loss) excludes amortization of purchased technology and intangible assets and stock-based compensation. For the three month period ended October 2, 2004, adjusted net income (loss) excludes amortization of purchased technology and intangible assets. Management does not consider amortization of purchased technology and intangible assets to be part of the Company's on-going operating activities, and does not consider amortization of purchased technology and intangible assets, or stock-based compensation to be meaningful in evaluating the Company's past financial performance or future prospects. In addition, adjusted net income (loss) is a primary financial indicator that the Company's management uses to evaluate the Company's financial results and forecast anticipated financial results for future periods. Amortization of purchased technology and intangible assets relates to the amortization of identified intangible assets, such as purchased technology, customer relationships and trademarks and trade names, purchased through an acquisition. Pursuant to the Company's adoption of Statement of Financial Accounting Standards No. 123® "Share-Based Payments" in the first quarter of fiscal year 2006, stock-based compensation reflects the fair value of all share-based payments to employees, including stock options and stock issued under certain employee stock purchase plans. The Company's definition of adjusted net income (loss) may differ from similar measures used by other companies and may differ from period to period.

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