MALMO, Sweden, Jan. 27, 2004 (PRIMEZONE) -- Telelogic (Stockholm:TLOG), the leading global provider of solutions for advanced systems and software development, today announced financial results for the fourth quarter and fiscal year 2003, ending December 31.
Revenue for the fourth quarter totaled US$34.8 million (SEK 262.6 million) compared with US$30.4 million (SEK 275 million) in Q402. This represents a 7 percent increase at constant exchange rates. Sales of new licenses and maintenance agreements showed continued strength and totaled US$28.8 million (SEK 217.4 million), a 9 percent increase at constant exchange rates compared with Q402. License and maintenance revenues accounted for 83 percent of total revenues, compared with 80 percent for the same quarter 2002. Services revenue for the fourth quarter amounted to US$6.0 million (SEK 45.2 million), a 7 percent decrease at constant exchange rates compared with the same quarter the previous year, following last year's refocusing of the company's services operations on high margin product-related business.
Pre-tax profit for the fourth quarter increased significantly to US$5.7 million (SEK 43.3 million) compared to US$-1.4 million (SEK -13 million) for Q4 2002. Cash flow for the quarter was also positive at US$2.5 million (SEK 19 million).
For fiscal 2003, revenues totaled US$116.7 million (SEK 937.0 million) compared to US$116.2 million (SEK 1,121 million) for FY02. At constant exchange rates this represented a decline of 8 percent. Much of the decrease in revenues is attributed to the company's rightsizing of its professional services business during the last year.
For the year, Telelogic delivered positive pre-tax profits totaling US$0.6 million (SEK 5.2 million) a US$9.1 million, (SEK 72.8 million) improvement compared with 2002. Cash flow for FY03 was US$-1.1 million (SEK -8.5 million) due to the restructuring actions completed in Europe earlier in the year. Liquid funds totaled US$19.2 million (SEK 139.8 million) at year end.
``The fourth quarter further solidified the company's financial turnaround," said Anders Lidbeck, president and CEO for Telelogic. ``Strong sequential revenue growth and continued cost control resulted in positive pre-tax profit and a 18.5 percent operating margin, excluding goodwill, for the fourth quarter. Also for the full year, we achieved a pre-tax profit, giving us a solid financial platform on top of a strong and a very good market position, for continued earnings improvements in 2004."
Telelogic's gross margin continued to increase to 80.5 percent for the fourth quarter 2003 compared with 76.7 percent for the same period 2002.
Telelogic's operations in the US and Asia have achieved double-digit growth, both in comparison with the previous quarter and the same quarter 2002. Both regions have had higher sales in local currency for each quarter during the year. The sales increase is primarily the result of strong license sales. Profitability in both regions continues to be good. In Europe, revenues have decreased compared with the same period the previous year. During the second half of 2003, revenues have increased for each quarter in line with a stabilization of the market and the completion of restructuring in the sales and marketing organization during the year. These actions have had a positive effect on profitability. The profitability in absolute numbers has tripled for the fourth quarter in comparison with the same period the previous year.
Telelogic's business in the aerospace/defense segment delivered another strong quarter and the segment retained its position as the company's largest vertical market, accounting for 31 percent of sales. For the last two years, sales in local currency to the aerospace/defense sector have increased from quarter to quarter. Sales in the telecom sector have also improved in successive quarters during 2003. From the second quarter, a stabilization of sales was observed. This trend continued during the year and a further positive development was seen during the fourth quarter. Compared to the third quarter, sales to the telecom segment increased by 11 percent in local currency. In addition, the company's business in the automotive and finance industries showed continued strength as the year ended.
"Overall, all business segments have showed increasing strength throughout the year with the fourth quarter strongest of all," said Lidbeck. "This is promising as we go into 2004."
Outlook for 2004
The underlying demand in the market is assessed as good and is expected to return to growth as the investment climate now begins to stabilize and improve.
The company's goal during the coming years is to increase sales by at least 10 percent per year in local currency. During 2004, this goal will only apply to the company's operations in the US and Asia. Within the framework of this goal, Telelogic also intends to strongly improve its market position in Asia, and during the next three years, double its operations there. For operations in Europe during 2004, attainment and consolidation of the long-term goals for productivity and profitability are prioritized. When these goals have been achieved, the company's growth objectives will also include the European operations.
During 2004, the company will focus on further improving the operating income so as to be able to enduringly attain its goal of a 20 percent operating margin, excluding goodwill amortizations, which was set in 1999. The forecast is that this goal will be attained towards the end of 2004.
It is the company's intention that pre-tax profit and cash flow for 2004 shall improve significantly in comparison with the previous year.
Please see attached the report including all figures. For additional information and the detailed quarterly report, please refer to: http://www.telelogic.com/about/investors/finance/other/q42003.cfm
Safe Harbor Statement The foregoing, including the discussion regarding the company's future prospects, contains certain forward-looking statements that involve risks and uncertainties, including uncertainties associated with economic conditions in the high-tech industry, particularly in the principal industry sectors served by the company, changes in customer requirements, the ability of the company to assimilate acquired businesses and to achieve the anticipated benefits of such acquisitions, competition and technological change. The company's actual results of operations may differ significantly from those contemplated by such forward-looking statements as a result of these and other factors, including factors set forth in the company's Annual Report.
About Telelogic
Founded in 1983, Telelogic(R) is a leading global provider of solutionsfor advanced systems and software development. Telelogic's intuitive,best-in-class software tools automate and support best practicesthroughout the application development lifecycle, leaving developmentteams free to concentrate on core competencies and apply their skillsand energy to value-added tasks. By optimizing each phase ofdevelopment, Telelogic enables companies to deliver higher qualitysystems and software with greater predictability, reduced time-to-marketand lower overall costs.
To ensure interoperability with third-party tools, Telelogic's productsare built on an open architecture and standardized languages. As anindustry leader and technology visionary, Telelogic is actively involvedin shaping the future of advanced systems and software development byparticipating in industry organizations like ETSI, INCOSE, ITU-T, OMGand others.
Headquartered in Malmo, Sweden with U.S. headquarters in Irvine,California, Telelogic has operations in 17 countries worldwide.Customers include Alcatel, BAE SYSTEMS, BMW, Boeing, DaimlerChrysler,Deutsche Bank, Ericsson, General Motors, Lockheed Martin, Motorola, NEC,Nokia, Philips, Siemens, Thales and Vodafone. For more information,please visit www.telelogic.com
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