PARIS, Feb. 11, 2002 (PRIMEZONE) -- Lectra (Paris Stock Exchange:LECS): The Board of Directors, chaired by Daniel Harari, reviewed and closed today the audited financial statements for fiscal year 2001.
FOURTH QUARTER 2001: POSITIVE INCOME FROM OPERATIONS AND NET INCOME
FREE CASH FLOW: + EUR 5.3 MILLION DESPITE SHARPLY LOWER REVENUES
Fourth Quarter Fiscal Year
(in million euros) 2001 2000 2001 2000
Revenues 48.7 63.6 194.5 228.7
Income from operations
before non-recurring charge 1.5 7.0 2.5 22.8
Income from operations(1) 0.2 7.0 -0.7 22.8
Pre-tax income(2) -0.1 5.0 -2.9 17.5
Net income(3) 0.4 4.3 -3.2 14.1
Free cash flow(4) 5.3 0.6 0.4 9.7
Stockholder's equity
at December 31 76.5 80.3
Net cash at December 31(5) 19.6 22.8
(1) The 2001 accounts include a non-recurring charge for cost-cutting measures of EUR 1.3 million in Q4 and EUR 3.2 million for the fullyear.
(2) Includes goodwill amortization of EUR 1.5 million for the full-year 2001 and EUR 1.4 million in 2000.
(3) Includes a corporate income tax charge of EUR 0.3 million for the full-year 2001 and EUR 3.4 million in 2000, taking into account tax losses carried forward.
(4) Free cash flow: cash provided by operating activities, less all investments other than acquisitions.
(5) Net cash at December 31, 2001: cash and cash equivalents (EUR 24.4 million) less total financial indebtedness (EUR 4.8 million).
Fourth quarter business activity severely hampered by the September 11 events
Although recovery started to be perceptible from mid-October (see October 30 press release), it was not strong enough to restore normal levels of activity.
Q4 revenues were down 23% relative to 2000, against a background of persistently difficult global business conditions. Sales of new software licenses, CAD/CAM equipment and related services fell 35%. On the other hand, recurring revenues from software evolution and service contracts, spare parts and consumables rose 2% (or 5% at constant exchange rates) and represented 43% of total revenues.
In geographic terms, dollar revenues in North America fell by only 6% (the business downturn began in Q4 2000). Europe, which fell by 5% in the first nine months of the year, declined by 27%. Asia was down by 26%, after having fallen 14% in the first nine months.
Return to profit in the fourth quarter
The cost-cutting program implemented from March 2001 onward in response to the worsening global economy helped bring Q4 fixed overheads down to 5% below the corresponding figure for Q4 2000. It is worth bearing in mind that, at the end of 2000, the company had forecast a revenue growth in excess of 10% for 2001; as a result the fixed overheads budgeted for the year and committed at the beginning of the year were up 10% over 2000.
Consequently, and despite sharply lower revenues, income from operations and net profit for the quarter were both positive. Before including the non-recurring cost of the cost-cutting program, income from operations was positive, at EUR 1.5 million. After including this non-recurring cost, income from operations was still positive at EUR 0.2 million, with a net profit of EUR 0.4 million.
Q4 EBITDA was positive, at EUR 2.4 million (EUR 6.8 million in 2000).
As a direct consequence of the measures taken, free cash flow came to a positive EUR 5.3 million.
2001 full-year results
The year 2001 has been negatively impacted by the US economic slowdown first, then by its worldwide knock-on effects, and by the sharp slowdown of business activity in the wake of the September 11 events. Therefore, in most cases the company's customers have merely put their investment decisions on hold pending an improvement in visibility.
Against this background, full-year revenues for 2001 fell by 15% relative to 2000, to EUR 194.5 million. Thanks to the cost-cutting program decided in March, income from operations, before accounting for the non-recurring cost of this program, was positive, at EUR 2.5 million. After including this EUR 3.2 million cost, the company registered a loss of EUR 0.7 million on operations.
Research and development costs (EUR 16.4 million) are fully expensed in the year.
After a net tax charge of EUR 0.3 million, the company registered a net loss of EUR 3.2 million. EBITDA for 2001, including the non-recurring cost of the cost-cutting program, totaled EUR 6.1 million (compared with EUR 24.7 million in 2000).
The company generated a positive free cash flow of EUR 0.4 million, with fourth-quarter performance wiping out the negative free cash flow generated in the first nine months of the year.
Lectra starts the year in 2002 with significantly stronger operating ratios
The full effects of the cost-cutting measures implemented in 2001 will be felt on the company's operating ratios starting January 1, 2002. The relevant non-recurring costs were fully-expensed in 2001. The entire organization has been streamlined to make it more responsive, and the company has emerged more efficient and more flexible.
Thanks to these measures, the company enters 2002 with fixed overheads roughly EUR 16 million below the figure committed at the beginning of 2001, and hence below the 2000 figure also.
Pending positive developments, the company takes a cautious though confident view of 2002. Poor visibility at present, and uncertainty over the timing and scale of the expected rebound in the world economy, make forecasting difficult.
However, in the absence of any further external events liable to trigger a further deterioration in the economy, the company expects to return to profit in 2002.
The combined impact of the reduction in fixed overheads and the steady growth in recurring revenues is lowering the company's break-even point. It can therefore look for a sharp increase of its business activity and earnings as soon as the world economy rebounds, as this should immediately spark a revival of technology investment among its customers.
Balance sheet, net cash, and recurring revenues: the company's fundamentals remain excellent
While the international situation impacted the company's steady revenue and earnings growth performance in 2001, its fundamentals remain excellent. It enjoys a favorable competitive position, with unrivalled global presence, an installed base of 10,000 customers, leading edge technology, and a strong balance sheet (with stockholders' equity of EUR 76.5 million, EUR 24.4 million in cash, and only EUR 4.8 million in financial borrowings at December 31, 2001).
In addition, gross profit from annual recurring revenues will cover nearly two thirds of fixed costs in 2002.
The company can thus count on extremely solid fundamentals to help it through these difficult times and also to continue to finance sustained-and sustainable-growth.
The company will publish its first-quarter 2002 results on May 2, 2002. The General Meeting of Shareholders is scheduled for May 3, 2002.
Traded on the Second Marche of the Euronext Paris exchange, Lectra is the world's leading technology provider of software and equipment dedicated to industries using textiles, leather and other soft goods (apparel, textiles, retail distribution, footwear, luggage & leather goods, furniture & furnishings, and the automotive, aeronautics and nautical industries), with a global technology offering combining CAD/CAM, virtual reality and the Internet.
With a staff of 1,400 worldwide, Lectra generates 87% of its revenues outside France each year, thanks to a unique international network of 37 subsidiaries and 78 offices in more than 100 countries, serving more than 10,000 clients.
Lectra's shares are part of the SBF 250, Midcac and Second Marche indexes of the Euronext Paris exchange, as well as part of the European technology stocks of the FTSE eTX All-Shares, eTX Innovation and eTX Software indexes.
For more information on Lectra: www.lectra.com