MALMO, Sweden, July 22, 2003 (PRIMEZONE) -- Telelogic (Other OTC:TGIAF) (Stockholm:TLOG), the leading global provider of solutions for advanced systems and software development, today announced financial results for the second quarter 2003, ending June 30.
Revenue for Q203 amounted to US$ 28.0 million (SEK 223.5 million) compared with US$ 29.9 million (SEK 290.0 million) in Q202.
New licenses and maintenance revenues totaled US$22.7 million (SEK 180.9 million) during the second quarter. At constant exchange rates the decline was 11 percent compared with the same quarter in 2002. New license and maintanence sales in local currency were slightly higher during the second quarter in comparision with the first quarter. Sales of new licenses and maintenance amounted to 81 percent of total revenues, which was in line with the previous quarter. Due to a restructuring of the company's professional services operations in 2002 to focus on product related business, Services revenues continued to decline and totaled US$5.3 million (SEK 42.6 million) for the quarter
The company's gross margin increased to 74.6 percent for the quarter compared with 71 percent for the same period 2002, including restructuring charges.
Total costs, excluding taxes, continued to decline during the quarter and decreased 4 percent compared to the previous quarter. Pre-tax profit amounted to US$-2.0 million (SEK -15.9 million) compared to US$-0.4 million (SEK -3.2 million) for the same quarter last year.
"While continued economic and political uncertainty made this another challenging quarter, we are seeing the very first signs of recovery for Telelogic in the telecommunications sector," said Anders Lidbeck, president and CEO of Telelogic. "Demand has stabilized and revenue increased 15 percent compared to the first quarter."
In the second quarter American and Asia/Pacific operations continued to show good profitability for the period. Sales have increased in comparison with the first quarter of 2003. Telelogic's European operation significantly increased profitability during the second quarter due to strong cost control measures that were initiated during the beginning of the quarter. These measures are having a positive effect on profitability without any significant impact on turnover.
To position the company for future growth, Telelogic has continued to invest in new product development and global marketing.
In the third quarter 2002, Telelogic introduced a new suite of development tools called TAU Generation2. In April, Telelogic TAU/Developer 2.0 received four out of five stars from Software Development magazine. The in-depth product review concluded that TAU/Developer is "great" and "probably belongs in your shop."
In the second quarter, sales of Telelogic TAU increased 11 percent compared to the first quarter. Demand for TAU Generation2 tools has continued to increase during 2003. At the end of the quarter, Telelogic secured a US$1.16 million order from a major U.S. telecom equipment manufacturer for TAU Generation2 tools. License sales from this product family now make up 10 percent of all new license sales.
Telelogic's configuration and change management solution Telelogic SYNERGY recently received the top ratings in six out of 10 categories in the latest configuration management report from U.K.-based industry analyst group Ovum. Among the 14 tools evaluated SYNERGY received the highest ratings overall and Ovum's top ratings in the three most critical categories: configuration management, build and release support and change management.
"Our unwaivering commitment to new product development is beginning to show positive results and should be the catalyst for growth as industry demand returns to normal," said Lidbeck. "Telelogic continues to solidify its market position and is well positioned when demand ramps up to more typical levels, despite a challenging global econmy."
Outlook for 2003
The underlying demand in the market is assessed as good and is expected to return to growth when the general investment climate improves. The prevailing economic situation, however, entails that investment decisions are being deferred and the investments made are being reduced in size.
During 2003, Telelogic is taking measures to strengthen growth in the markets in the US and Asia. The company's goal is to strengthen its position in these markets and to at least retain its position on a global basis.
During 2003, the company continues to focus on improving earnings and takes measures to create the conditions for achieving the goal set in 1999 of a 20% operating margin. A prerequisite for achieving this goal during 2004 is, however, that demand is strengthened. The forecast is that earnings before taxes for 2003 will improve in comparison with the previous year.
During 2003, Telelogic will report any restructuring expenses as a part of current expenses.
Telelogic has a satisfactory financial position. Cash flow is expected to be negative during 2003 but will develop positively as earnings before taxes improve. Cash flow is forecast to be positive in 2004.
For additional information and the detailed quarterly report, please refer to: www.telelogic.com
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 the leading global provider of solutions for advanced systems and software development. The company's integrated best-in-class software tools and professional services enable companies to automate their entire development lifecycle, resulting in improved predictability and overall costs. To ensure interoperability with other leading third-party tools, Telelogic's products are built on an open architecture and standardized languages. As an industry leader and technology visionary, Telelogic is actively involved in shaping the future of advanced systems and software development by participating in industry organizations like 3GPP, INCOSE, ITU-T, IEEE, MOST, OMG and others.
Headquartered in Malmo, Sweden, with U.S. headquarters in Irvine, California, Telelogic has offices in 17 countries worldwide. Customers include Alcatel, BAE Systems, BMW, Boeing, DaimlerChrysler, Deutsche Bank, Ericsson, General Motors, Lockheed Martin, Motorola, NEC, Nokia, Philips, Siemens, and Thales. For more information, please visit www.telelogic.com. Telelogic, Telelogic DOORS, Telelogic DocExpress and Telelogic Tau are the registered trademarks of Telelogic AB. Telelogic Synergy and ActiveCM are trademarks of Telelogic AB. All other trademarks are the properties of respective holders.
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The full report is available for download:
http://www.waymaker.net/bitonline/2003/07/22/20030721BIT00490/wkr0001.pdf