FOR RELEASE Thursday, May 11, 2006
PLANO, Texas – UGS Corp., a leading global provider of product lifecycle management (PLM) software and services, today announced first quarter 2006 results.
First quarter financial highlights include:
“UGS’ solid results were led by overall software revenue growth and our relentless focus on customer success which is at the heart of our leadership and vision of enabling global innovation networks,” said Tony Affuso, chairman, CEO and president of UGS. “Today, one year after closing the Tecnomatix acquisition, we announce an exciting competitive win at Northrop Grumman that underscores our momentum as the market leader in digital manufacturing.”
Customer Win Announcements
Partnerships and Consortiums
UGS announced or received several awards during the first quarter of 2006.
UGS will host its first quarter 2006 earnings call with securities analysts live on the Internet at 10:30 a.m. Central time, Thursday, May 11, 2006. Presentation slides will be posted on www.ugs.com at 8:00 a.m. Central time. See below for webcast/teleconference access information.
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About UGS UGS is a leading global provider of product lifecycle management (PLM) software and services with nearly 4 million licensed seats and 46,000 customers worldwide. Headquartered in Plano, Texas, UGS’ vision is to enable a world where organizations and their partners collaborate through global innovation networks to deliver world-class products and services while leveraging UGS’ open enterprise solutions, fulfilling the mission of enabling them to transform their process of innovation. Note: UGS, JT, NX, Solid Edge, Teamcenter, Tecnomatix, Velocity Series and Transforming the process of innovation are trademarks or registered trademarks of UGS Corp. or its subsidiaries in the United States and in other countries. Microsoft is a trademark or registered mark of Microsoft Corporation or its subsidiaries in the United States and in other countries. Nastran is a trademark or registered mark of NASA. Catia is a trademark or registered mark of Dassault Systèmes or its subsidiaries in the United States and in other countries. All other trademarks, registered trademarks or service marks belong to their respective holders.
The statements in this news release that are not historical statements, including statements regarding the expected benefits of the customer relationship, the successfulness of the implementation and other statements identified by forward looking terms such as "may," "will," "expect," "plan," "anticipate" or "project," are forward-looking statements. These statements are subject to numerous risks and uncertainties which could cause actual results to differ materially from such statements, including, among others, risks relating to loss or downsizing of customers, competition, international operations and exchange rate fluctuations, changes in pricing models, and intellectual property. UGS has included a discussion of these and other pertinent risk factors in its annual report on Form 10-K most recently filed with the SEC. UGS disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
March 31, 2006
March 31, 2005
Services and other
Cost of revenue:
Services and other
Amortization of capitalized software and acquired intangible assets
Total cost of revenue
Selling, general and administrative
Research and development
Amortization of other intangible assets
Total operating expenses
Operating (loss) income
Interest expense and amortization of deferred financing fees
Other income (expense), net
Loss before income taxes
Benefit for income taxes
Net (loss) income
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
Cash and cash equivalents
Accounts receivable, net
Prepaids and other
Deferred income taxes
Total current assets
Property and equipment, net
Capitalized and acquired software, net
Customer accounts, net
Other intangible assets, net
Liabilities and Stockholder’s Equity:
Accounts payable and accrued liabilities
Income taxes payable
Total current liabilities
Other long-term liabilities
Deferred income taxes
Common stock, $ .01 par value, 3,000 shares authorized; 100 issued and outstanding at March 31, 2006 and December 31, 2005
Additional paid-in capital
Accumulated other comprehensive loss, net of tax
Total stockholder’s equity
Total liabilities and stockholder’s equity
EBITDA represents net income (loss) before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to give effect to certain items that are required in calculating covenant compliance under our senior secured credit facility entered into May 2004. Adjusted EBITDA is calculated by subtracting from or adding to EBITDA items of income or expense as described below. EBITDA and Adjusted EBITDA are not recognized terms under generally accepted accounting principles, or GAAP. EBITDA and Adjusted EBITDA do not represent net income, as that term is defined under GAAP, and should not be considered as an alternative to net income as an indicator of our operating performance. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management or discretionary use as such measures do not consider certain cash requirements such as capital expenditures (including capitalized software expense), tax payments and debt service requirements. UGS Corp. considers EBITDA and Adjusted EBITDA to be key indicators of our ability to pay our debt. We have included information concerning EBITDA and Adjusted EBITDA because we use such information in determining compensation of our management and in our review of the performance of our business. EBITDA and Adjusted EBITDA as presented herein are not necessarily comparable to similarly titled measures. The following is a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the GAAP measure we believe to be most directly comparable to EBITDA and Adjusted EBITDA (in thousands).
Reconciliation of net loss to EBITDA:
Benefit for income taxes
Depreciation and amortization
Reconciliation of EBITDA to Adjusted EBITDA:
Impact of revenue reduction resulting from purchase accounting (a)
Other items (c)
Currency translation impact (d)
(a) Removes the purchase accounting impact for the adjustment to deferred revenue.
(b) Removes the impact of the restructuring.
(c) Represents the impact of management, consulting and advisory fees and related expenses paid to our parent companies and affiliates of each of our sponsors, severance related expenses, and expenses associated with our retention incentive plan for certain members of management.
(d) Represents the net effect of unrealized gains and losses from revaluing the intercompany debt that resulted from the acquisition of UGS PLM Solutions Inc. and from hedging obligations used to offset foreign exchange currency balance sheet exposures