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08 February 2005

UGS Exceeds US$1 Billion in Revenues for 2004; Becomes First Company in New Product Lifecycle Management (PLM) Industry to Report Breaking the $1 Billion Mark

Company Also Announces First Two Systems Integrator Alliances Since Launch of Independent Operations and New Marketing Leader

FOR RELEASE Tuesday, February 8, 2005

PLANO, Texas– UGS, a leading global provider of product lifecycle management (PLM) software and services, today announced it exceeded US$1 billion in revenue for 2004 -- becoming the first company in the new PLM industry to report breaking the $1 billion mark in annual revenues.

Pro-forma financial highlights from the full year 2004 include:

  • Revenue of US$1,018.9 million, or 14 percent growth over the same period a year earlier.
  • Overall software revenue growth of 10 percent over the same period a year earlier.
  • Collaborative Product Development Management (cPDm) revenue growth of 35 percent, including cPDm software revenue growth of 25 percent, over the same period a year earlier.
  • Operating income of US$200.7 million, or a 37 percent increase over the same period a year earlier.
  • EBITDA of US$257.8 million, or a 16 percent increase over the same period a year earlier.
  • Sixty-four enterprise contracts with total contract value of more than US$1 million each.

All of the above figures exclude certain GAAP purchase accounting adjustments relating to the UGS acquisition.  These include amortization and depreciation expenses of US$78.0 million and the reduction to revenues of US$40.9 million as a result of writing off deferred revenue.  EBITDA includes an unrealized foreign currency gain of US$12.6 million. 

Pro forma financial highlights from the fourth quarter 2004 include:

  • Revenue of US$294.2 million, or 11 percent growth over the same period a year earlier – marking UGS’ sixth consecutive quarter of year-over-year revenue growth.
  • Maintenance revenues increased 17 percent over the same period a year earlier, reflecting customers’ continued confidence in UGS’ PLM leadership position.
  • Software revenues were unchanged from the same period a year ago, reflecting the extraordinary results in Q4 2003.
  • cPDm revenue growth of 39 percent, including cPDm software revenue growth of 38 percent, over the same period a year earlier – marking the cPDm segment’s highest-ever contribution to the company’s revenue.
  • Operating income of US$68.8 million, or a 10 percent increase over the same period a year earlier.
  • EBITDA of US$82.9 million, which was flat compared to the same period a year earlier. 
  • The signing of 14 enterprise agreements each at a total contract value of US$1 million or greater – reflecting UGS’ continued success with large enterprise engagements.

All of the above 2004 figures also exclude certain GAAP purchase accounting adjustments relating to the UGS acquisition.  These include amortization and depreciation expenses of US$32.7 million and the reduction to revenues of US$14.0 million as a result of writing off deferred revenues.  EBITDA includes an unrealized foreign currency gain of US$9.5 million. 

“Today marks a major milestone for UGS in many ways.  We are the first company in the new PLM industry to report reaching the $1 billion mark in revenue, and we continue to increase our market share and profitably grow while always focusing on our customers’ success as our number one priority,” said Tony Affuso, chairman, CEO and president of UGS. 

A key driver of UGS’ strong year-to-date growth is the company’s undisputed leadership in the cPDm segment of the PLM market – the market’s highest-growth space.  Our cPDm leadership also drives our ability to pursue enterprise-level engagements, which we are now doing in a number of new industries where highly successful companies are transforming their processes of innovation bypioneering PLM’s adoption as an enterprise imperative,” Affuso said.  “We believe the winner in PLM will be the winner in cPDm, and our growth and momentum in cPDm continues to gain steam.” 

Separate announcements

UGS also today issued several announcements of major significance to the company:

  • UGS and HP announced a global program to jointly offer customers a one-stop shop of enterprise level PLM solutions designed to offer quicker time to value.  UGS and HP will provide total PLM solutions to more efficiently enable companies tointegrate individual components, such as hardware, software, services, integration and support.  (See separate release.)
  • UGS and Capgemini U.S. LLC, one of the world’s foremost providers of consulting, technology and outsourcing services, today announced an alliance to jointly offer enterprise level industry-leading PLM solutions designed to transform the process of innovation and thus improve efficiency and top line growth.  (See separate release.)
  • UGS today announced the appointment of Dave Shirk as the company’s new Executive Vice President of Global Marketing.  The appointment of Shirk, who has held senior-level marketing positions at enterprise software companies including Oracle, Novell and Vignette, completes the organization’s business model in which Products, Sales and Marketing each have balanced responsibility for success and will work in close collaboration to reach company goals.  Chuck Grindstaff, executive vice president of Products, continues to lead the Products organization, and in October, Jim Milton, executive vice president of Global Sales and Services, joined the company to guide worldwide Sales.  (See separate release.) 

“Combined with our strong fourth quarter and full year 2004 performance, these announcements underscore both an industry and a company on the move,” Affuso said.  “UGS’ customer commitment remains our most critical attribute.  UGS’ new alliances highlight our independence and that leading systems integrators see the strong opportunity in the dynamic PLM market.  The appointment of Dave Shirk emphasizes our readiness to take the company to an even stronger market position and completes our senior leadership team.  UGS jumps into 2005 with confidence in our ability to move to the next level of market leadership.”

About UGS
UGS is a leading global provider of product lifecycle management (PLM) software and services with nearly 4 million licensed seats and 42,000 clients worldwide.   Headquartered in Plano, Texas, the company promotes openness and standardization and works collaboratively with its clients in creating enterprise solutions enabling them to transform their process of innovation and thus begin to capture the value of PLM.  

The statements in this news release that are not historical statements are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond UGS’ control, which could cause actual results to differ materially from such statements. The company has included a discussion of pertinent risk factors in the final offering memorandum relating to our 10% Senior Subordinated Notes, a copy of which discussion of risk factors is available from the company. The company disclaims any intention or obligation to update or revise any forward- looking statements, whether as a result of new information, future events or otherwise.

UGS will host a web-streamed audio call on its fourth quarter 2004 and year-end earnings with securities analysts live on the Internet at 10:30 a.m. Central time, Tuesday, Feb. 8, 2005.  Listen to a replay at: https://www.mymeetings.com/nc/join.php?i=PG3315015&p=UGS&t=r

Note: Those joining the streaming audio online call must have Windows Media Player or Real Player to participate.

 

 

Primární kontakt

Mendi Paschal
+1 972 987 3210
paschal@ugs.com

Doug Barnett -- Financial Analysts
+1 972 987 3352
barnettd@ugs.com