Innoveda loses in Q3 but predicts Q4 profit

Innoveda has reported financial results for the third quarter ended 29th September 2001.

Innoveda has reported financial results for the third quarter ended 29th September 2001.

Revenue for the quarter was $20.0 million, meeting the target announced by the company earlier in the quarter.

The company's operating loss of $2.9 million, before amortisation and unusual charges, was better than the projected loss of $3 to $4 million.

As expected, Innoveda recorded a restructuring charge of $5.3 million for severance, fixed assets and facility-related charges, and a non-cash asset impairment charge of $32.9 million related to intangible assets and goodwill recorded as a result of mergers completed in 2000.

Including these one-time charges, the net loss for the third quarter of 2001 was $34.8 million, or $0.89 per share.

For the same period last year, Innoveda reported revenue of $23.1 million, operating income of $3.3 million, before amortisation and unusual charges, and a net loss of $4.8 million, or $0.14 per share.

Revenue for the nine months ended 29th September 2001 was $69.4 million.

The operating loss, before amortisation and unusual charges, for the year-to-date period was $4.7 million and, for the same period, the net loss was $43.6 million, or $1.12 on a per share basis.

For the comparable periods last year, Innoveda reported revenue of $59.0 million, operating income of $5.2 million, before amortization and unusual charges, and a net loss of $9.9 million, or $0.40 per share.

Commenting on the quarterly results, President and Chief Executive Officer William J Herman said: "In August we took decisive action to restructure our company, in response to our customers' changing business needs and global economic conditions.

We also set a new target for revenue and committed to a rapid return to profitability.

Judging by our third quarter results, I'm pleased to report that our strategy is succeeding.

We beat the financial goals we set for the quarter and, even with our reduction in overall spending, we increased our technology investment in key areas that customers tell us are crucial for getting their products to market as quickly as possible - high-speed printed circuit board (PCB) design and analysis, advanced system-level design and simulation, and electromechanical design.

We're already seeing the positive impact of our new sales management team, and I'm confident they will contribute significantly to Innoveda's future success.

As we move forward, our customers can expect to see new cutting-edge, critical-path products released throughout the coming year.

Innoveda is well positioned, ahead of plan, and poised to return to profitability next quarter", said Herman.

According to Herman, Innoveda expects fourth quarter 2001 revenue of approximately $22 million and operating margin, before amortisation, of approximately 12%, an increase from the previously forecasted operating margin of 8 to 10%.

These results, coupled with lower amortisation expense for the future, would enable the company to achieve a modest net income for the fourth quarter - significantly sooner than originally expected.

"Although the current global economic situation remains uncertain, Innoveda is now better positioned for success, refocused on solving our customers' critical business challenges with leading 'must-have' technology", Herman said.

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