PARIS, May 2, 2002 (PRIMEZONE) -- The Board of Directors of Lectra, chaired by Daniel Harari, reviewed today the unaudited consolidated financial statements for the first quarter of 2002.
(in millions of euros) January 1st - March 31 2002/2001 Change
2002 2001 Euros %
Revenues 41.9 46.5 -4.6 -10%
Income from operations (1) -0.7 -1.9 +1.2 -
Pre-tax income (2) -1.1 -2.6 +1.5 -
Net income -1.1 -2.7 +1.6 -
Free cash flow (3) 7.1 0.6 +6.5 ns
Stockholder's equity at March 31 75.5 77.6 -2.1 -3%
Net cash at March 31 (4) 26.7 22.6 +4.1 +18%
(1) Includes in 2001 a non-recurring charge for cost-cutting measures
of EUR 0.4 million.
(2) Includes goodwill amortization of EUR 0.5 million in 2001 and
EUR 0.4 million in 2001.
(3) Free cash flow: cash provided by operating activities, less all
investments other than acquisitions.
(4) Net cash at March 31, 2002: cash and cash equivalents (EUR 32 million)
less total financial indebtedness (EUR 5.3 million).
Q1 2002 business volumes remain sluggish
In a persistently weak global economy, with no concrete sign of improvement, business volumes have not returned to normal. First-quarter 2002 revenues are down 10% from the same period in 2001 (the decrease in Q4 2001 was 23% relative to the corresponding period for 2000).
Revenues by product line were as follows: software 28%, CAD/CAM equipment 28%, services 41%, PCs and peripherals 3%. Revenues from new sales of software licenses, CAD/CAM equipment and related services fell by 25% from Q1 2001 (the decline was 35% in Q4 2001). New orders received exceeded revenues (although they were down 11% from Q1 2001, after falling 29% in Q4 2001).
On the other hand, recurring revenues from software evolution contracts and service contracts, spare parts & consumables, and other after market services on the installed base, increased by 9% (compared with 2% in Q4 2001), accounting for 52% of total revenues.
In geographic terms, dollar revenues in North America were down 1% relative to Q1 2001, compared with a fall of 6% in Q4 2001 (business activity began to weaken in Q4 2000, declining 22% over 2001 as a whole). Europe registered a 10% decline (compared with a 27% fall in Q4 2001). The largest fall came in Asia-Pacific (down 17%, compared with a decline of 26% in Q4 2001).
A tight grip on overheads and free cash flow
As forecasted, the cost-cutting program introduced in March 2001 in response to the weakening global economy, combined with very strict cost controls, has lowered fixed overheads by EUR 3.2 million. This brought fixed overheads back down to 10% below their level for Q1 2001 (and also below the figure for Q1 2000). The impact of the 10% decline in revenues was thus partially offset: although Lectra registered a EUR 0.7 million loss on operations, this nevertheless represents a EUR 1.2 million improvement over the first quarter of 2001.
EBITDA for the quarter was positive, at EUR 1.1 million (versus a negative EUR 0.4 million in Q1 2001). Free cash flow generated in the quarter was positive at EUR 7.1 million, up EUR 6.5 million relative to Q1 2001 (EUR 0.6 million). This was a direct result of programs implemented in 2001, and pursued in 2002, to bolster the company's net cash without jeopardizing its ongoing development.
Lectra further enhances its competitive position
Customers have responded warmly to the new Vector automated cutting systems launched at the start of the year, now available in versions geared to the needs of each market sector. Reactions to the new Total Leather Solution for cutting large hides for leather furniture and car seats have also been encouraging. Initial orders for both are promising.
The array of Lectra services, expanded in 2001, and a global team of more than 500 staff members dedicated to this activity (currently the only one of its kind on the market), are helping to strengthen the partnerships Lectra has forged with its 10,000 customers, and to attract new customers.
The company has revamped its organization, streamlining it for greater responsiveness, generating increased efficiency and flexibility. At a time when some competitors are experiencing difficulties, Lectra can count on its solid financial fundamentals (EUR 75.5 million in shareholders' equity, EUR 32 million in cash, and only EUR 5.3 million in financial borrowings at March 31, 2002) if the current economic weakness were to persist. With its strong balance sheet, it can continue to finance sustained--and sustainable--growth once the world economy turns positive again. With its global presence and unchanged R&D investment, a leading-edge product line and solid financial fundamentals, Lectra is now more competitive than ever.
Pending positive developments, the company takes a cautious yet confident view of 2002.
Short-term visibility is especially poor. The United States appear to be sending out initial positive signs, signaling the first stirrings of renewed interest in business negotiations and investment decisions. Europe, Asia and the rest of the world, on the other hand, continue to suffer from persistent weak demand and indecision. As stated in its press release of February 11, 2002, the company believes it is still difficult to make forecasts. The date and scale of the expected rebound in the global economy thus remain shrouded in uncertainty. However, in the absence of any further major external events triggering a further deterioration in the economy, and in light of the improvement in operating ratios and rising recurring revenues recorded in the first quarter of this year, Lectra confirms its expectation of a return to profit in 2002.
The company's potential to bounce back as soon as the world economy picks up is all the greater in view of the fact that Q1 2002 revenues from sales of new software licenses, CAD/CAM equipment and related services--the company's growth drivers--represent only 60% of the figure for the corresponding period of 2000. The company believes its customers' technology needs--in all market sectors--are greater now than ever before to tackle the major strategic challenges now facing them, to which the company's products and services are wholly dedicated, i.e.: cutting costs and boosting productivity, reducing time-to-market, dealing with globalization, developing secure communication across the supply chain, enhancing quality, satisfying the growing demand for masscustomization, and managing control over their corporate image and brands.
Consequently, Lectra's action plan for 2002 is focused primarily on boosting sales. The management discussion and quarterly financial statements are available at www.lectra.com. Second quarter 2002 results will be published on July 29, 2002, after the close of Euronext.
Lectra is a world leader in the design and distribution of software and hardware dedicated to the major industrial users of textiles, leather and other soft materials, supplying a comprehensive array of associated services for the development of complete solutions, from product design to manufacture to retailing. Lectra is present on all major markets, including fashion, apparel and retail distribution, luggage & leather goods, transportation (the automotive, aeronautics and nautical industries), together with other industries working with industrial fabrics and composite materials.
With a staff of nearly 1,400 worldwide, Lectra generates 87% of its revenues outside France, thanks to a unique international network serving more than 10,000 customers in over 100 countries. Lectra's shares are traded on the Second Marche of the Euronext Paris exchange (in the NextEconomy segment). They figure among the European technology stocks making up the FTSE eTX All-Shares, eTX Innovation and eTX Software indexes, and also among the French stocks making up the SBF 250, Midcac and Second Marche indexes of Euronext Paris.
Learn more about Lectra at: www.lectra.com
Angelique Cuilhe e-mail: a.cuilhe@lectra.com Tel : +33 (0)1 53 64 42 95 Fax : +33 (0)1 53 64 43 40