TCNO Tecnomatix Technologies Ltd (MM)

Tecnomatix Announces Third Quarter 2003 Results HERZLIA, Israel, Oct. 29 /PRNewswire-FirstCall/ -- Tecnomatix Technologies Ltd. , the driving force in Manufacturing Process Management (MPM), today announced its financial results for the third quarter ended September 30, 2003. Revenues for the third quarter of 2003 were $20.3 million, compared to $20.1 million for the third quarter of 2002. Net loss for the third quarter of 2003 was $(4.7) million or $(0.43) per diluted share, compared to a net loss of $(0.2) million or $(0.02) per diluted share for the third quarter of 2002. Excluding the special charges of $4.4 million associated with the USDATA acquisition, the Company's net loss for the third quarter of 2003 was $(0.2) million or $(0.02) per diluted share. As of September 30, 2003, the Company had a $48.4 million balance of cash and cash equivalents, short-term investments and long-term investments, compared to $36.5 million as of June 30, 2003. "The third quarter was a productive quarter for Tecnomatix. During this quarter, which is typically a seasonally slow one, we maintained financial stability, reported a positive cash flow, booked a steady stream of new and repeat orders, and continued to execute on the initiatives that will drive our growth and profitability," said Harel Beit-On, chairman and chief executive officer of Tecnomatix Technologies. "We are encouraged by our success in expanding our relationships with existing customers and the adoption of our MPM solutions by new ones. This quarter, we closed a steady stream of repeat orders from world-leading companies like General Motors, Ford, Siemens, BMW, Fiat Auto, FoxConn and Artysen. New customer wins included Teleste, a Finish electronics company; TREMEC, a Mexican Tier 1 automotive supplier; Kanto Autoworks Ltd., a Japanese Tier 1 automotive supplier; and a major Japanese automotive OEM, which adopted our eMPower Machining solution after a two-year evaluation period by its Powertrain division. We are particularly pleased that a growing number of our key customers are reporting the benefits of using our eMPower solutions and holding discussions with us on multi-year deployment agreements. "We are happy with our progress in China, where interest in our products is growing in line with the increasing manufacturing capacity in this region. This quarter, another automotive company, the second this year, chose our eMPower CarBody Solution. In line with our strategy to address this fast-growing market, we are investing more resources in China during the coming months to meet customer demand and give the appropriate services to our customers. "During the quarter, we completed the acquisition of substantially all the assets and liabilities of USDATA corporation, as scheduled. We moved swiftly to integrate all USDATA processes into our existing operations and strengthened the USDATA team with some of Tecnomatix's senior executives. In additon, the USDATA products have been re-branded as Tecnomatix FactoryLink and Tecnomatix Xfactory. Tecnomatix can now offer customers an end-to-end solution from the new product introduction phase through the execution cycle. Manufacturers will be able to respond quickly to market demands and deliver what their customers want, when they want them and at lower costs. We believe that this acquistion will contribute to our profitability in the first half of 2004. "In summary, this has been a productive quarter, as we made progress in our core MPM business, closing some initial deals and repeat orders for our eMPower Enterprise Solution as well as increasing our pipeline for the future," continued Beit-On. "In addition, we made significant steps in expanding our Company and its offering to become a major supplier of manufacturing software from planning through production." Forward-Looking Guidance Oren Steinberg, chief financial officer and executive vice president of Tecnomatix Technologies said, "Our focus in the fourth quarter will remain on increasing sales, maintaining our cost controls, and overseeing a smooth integration of USDATA activities. Going forward, we expect sequential revenue growth of 5-10% in the fourth quarter 2003 with similar profitability. In 2004, we expect to see revenue growth of 10-15% year over year with improved profitability." Investor Conference Call / Webcast Details Tecnomatix will review detailed third quarter 2003 results on October 29, 2003 at 8:30AM EST. The conference call-in number is 973-935-8504. A replay will be available from 12:30PM EST on October 29 through midnight EST, November 5. The replay number is 973-341-3080. The confirmation identification for both, the live call and replay is 4224229. The live call and replay will also be accessible over the web at http://investor.tecnomatix.com/. About Tecnomatix Technologies and eMPower Tecnomatix Technologies Ltd. is the driving force in Manufacturing Process Management (MPM). Today's leading global manufacturers are adopting MPM solutions to expand revenue potential and reduce costs by accelerating product introductions, shortening time to volume, and optimizing production execution. eMPower enables our customers to succeed with its collaborative, open platform and applications for defining, simulating, managing, and executing manufacturing processes across the extended enterprise. For more information on eMPower products and solutions for MPM, please visit http://www.tecnomatix.com/. This press release includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Such statements may relate to the Company's plans, objectives and expected financial and operating results. The risks and uncertainties that may affect forward-looking statements include, but are not limited to: currency fluctuations, global economic and political conditions, market demand for Tecnomatix products and services, long sales cycles, new product developments, assimilating future acquisitions, maintaining relationships with customers and partners, and increased competition. For more details about the risks and uncertainties of the business, refer to the Company's filings with the Securities and Exchange Commission. Tecnomatix undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. TECNOMATIX TECHNOLOGIES LTD. Consolidated Statements of Operations U.S $ in thousands, except per share data Nine months ended Three months ended 9/30/2003 9/30/2002 9/30/2003 9/30/2002 Revenues Software license fees 24,139 26,487 7,925 8,403 Services 36,918 34,110 12,378 11,660 Total revenues 61,057 60,597 20,303 20,063 Costs and expenses Software license fees 6,254 5,683 1,983 1,909 Services 10,910 11,238 3,562 3,592 Amortization of acquired intangibles 23 1,914 23 574 Research and development, net 10,671 10,930 3,249 3,581 Selling and marketing 29,977 27,013 10,515 8,964 General and administrative 3,623 3,527 1,055 1,255 In-process research and development 3,193 -- 3,193 -- Acqusition and related costs 1,217 -- 1,217 -- Restructuring costs and assets impairment 1,487 -- -- -- Total costs and expenses 67,355 60,305 24,797 19,875 Operating income (loss) (6,298) 292 (4,494) 188 Financial income (expense), net 476 (861) (122) (190) Income (loss) before taxes on income (5,822) (569) (4,616) (2) Provision for income taxes (41) 26 (40) (58) Income (loss) after taxes on income (5,863) (543) (4,656) (60) Equity share in net income (loss) of an affiliate company (74) (334) (25) (111) Net income (loss) (5,937) (877) (4,681) (171) Basic earnings (loss) per share: Net Income (loss) (0.55) (0.08) (0.43) (0.02) Diluted earnings (loss) per share: Net Income (loss) (0.55) (0.08) (0.43) (0.02) Weighted average number of shares outstanding: Basic 10,761,537 10,573,119 10,929,256 10,627,905 Diluted 10,761,537 10,573,119 10,929,256 10,627,905 TECNOMATIX TECHNOLOGIES LTD. Condensed Consolidated Balance Sheets U.S $ in thousands 9/30/2003 12/31/2002 Current Assets: Cash and cash equivalents 11,901 10,466 Short-term investments 3,153 5,981 Receivables: Trade 27,716 27,671 Related parties 231 97 Other and prepaid expenses 7,008 5,284 Total current assets 50,009 49,499 Non-current receivables 1,065 915 Long-term investments in bonds 32,996 25,472 Property and equipment, net 5,591 6,108 Goodwill, net 25,577 17,210 Acquired intangibles, net 2,556 -- Other assets, net 16,247 16,613 Total assets 134,041 115,817 Current Liabilities: Current maturities of 5.25% convetible subordinated notes 14,799 -- Payables: Trade 2,582 2,950 Deffered Revenue 8,587 4,659 Other and accrued expenses 17,354 14,956 Total current liabilities 43,322 22,565 Accrued severance pay, net 1,016 907 Long-term loans: Accrued restructuring expense 1,838 -- 5.25% Convertible subordinated notes -- 37,428 Loan from a Bank 25,000 -- Total long-term loans 26,838 37,428 Shareholders' equity 62,865 54,917 Total liabilities and shareholders' equity 134,041 115,817 Company Contact: Company Investor Contact: Tecnomatix Technologies Ltd. Tecnomatix Technologies Ltd. Oren Steinberg Marsha Shalvi +972-9-9594755 +972-9-9594733 +972-54-942180 Investor Contact: The Ruth Group David Pasquale +1-646-536-7006 DATASOURCE: Tecnomatix Technologies Ltd. CONTACT: Oren Steinberg, +972-9-9594755, , or Investors, Marsha Shalvi, +972-9-9594733, +972-54-942180, , both of Tecnomatix Technologies Ltd.; or Investor Contact, David Pasquale, of The Ruth Group, +1-646-536-7006, , for Tecnomatix Technologies Ltd. Web site: http://www.tecnomatix.com/ http://investor.tecnomatix.com/

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