Innoveda Divests of System-Level Design Software Business -- Reports First Quarter 2002 Results
MARLBORO, Mass.--(BUSINESS WIRE)--April 23, 2002--Innoveda, Inc.
(Nasdaq:INOV - news), a leading electronic design automation company,
announced today the divestiture of its system-level design (SLD)
software unit to Divestiture Growth Capital (DivestCap).
The SLD business unit will begin operations immediately as a
separate company, under the name Summit Design, Inc., headquartered in
Westlinn, Oregon. This new company will be managed by Larry Gerhard,
chief executive officer, and Guy Moshe, former vice president and
general manager of the SLD business unit at Innoveda. Financial terms
were not disclosed.
"System-level design is an emerging market with new methodologies
that require intense focus and commitment of resources, particularly
in sales and engineering," said William J. Herman, chairman and chief
executive officer, Innoveda. "It was in the best interest of our
respective customers to complete this transaction and allow the two
companies to concentrate on their core strengths. Innoveda is focused
on PCB systems design with its proven, industry-leading solutions and
the emerging automotive solutions segment."
"We are excited about the opportunities ahead of us and we are
moving forward immediately to execute against our business plan," said
Larry Gerhard, chief executive officer, Summit Design. "Because the
products, infrastructure and resources already are in place, we can
provide a seamless transition for customers and begin engaging new
prospects."
With more than 30 years of senior management experience, Gerhard
has been president, CEO and director of major electronics corporations
including Enterprise Communications & Computing, Inc., Ventura
Software and Decision Data, Inc. as well as vice president of
engineering at Raytheon Data Systems.
Prior to joining Innoveda, Guy Moshe was a founder and director of
marketing and sales at Israeli-based SEE Technologies. He also held
positions at Daisy, worked as a design engineer in computerized
vehicles at Aniam Maracoht Ltd., and managed the computerized process
of all the Kibbutzim in Drom Hasharon in Israel.
"Divestiture Growth Capital's investment will catalyze growth
opportunities and further differentiate Summit as a leading player in
its market," said Charles Hale, Partner, Divestiture Growth Capital.
"This transaction will be beneficial to both Summit's and Innoveda's
customers and employees. We are extremely excited about our
investment."
Innoveda Reports First Quarter Results
Innoveda reported its financial results for the first quarter,
ended March 30, 2002. For the first quarter 2002, revenue was $15.7
million with an operating loss, before amortization, of $2.2 million.
The net loss for the quarter was $3.1 million, or $0.08 per share. The
economic climate and the company's restructuring in August 2001
contributed to a decline in year-over-year results. For the same
period last year, Innoveda reported revenue of $27.3 million,
operating income, before amortization, of $1.8 million and a net loss
of $2.1 million, or $0.05 per share.
About Innoveda
Innoveda, Inc. (Nasdaq "INOV") is a worldwide leader in electronic
design automation (EDA) technology, software and services for
businesses in the consumer electronics, computer, telecommunications,
automotive and aerospace industries. The company's innovative
solutions are intended to empower people for mission-critical areas of
the design process. Headquartered in Marlboro, Mass., Innoveda has
sales offices and research centers worldwide. Additional information
can be found at: http://www.innoveda.com/
About Divestiture Growth Capital
DivestCap is a technology investment fund dedicated to buying,
financing, and growing information technology divestitures. For the
divestiture, DivestCap builds value by providing the active financial
and operating expertise each investment needs to realize its
potential. For the selling company, DivestCap creates shareholder
value by structuring transactions quickly, fairly, and flexibly.
Forward-Looking Statements
This press release includes forward-looking statements that are
subject to a number of risks and uncertainties. All statements, other
than statements of historical facts, included in this press release
including, without limitation, statements regarding Innoveda's
financial projections for any period, strategy, future operations,
financial position, prospects, plans, goals and objectives of
management are forward-looking statements. When used in this press
release, the words "will", "believe", "anticipate", "intend",
"estimate", "expect", "project", "plan" and similar expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. We cannot
guarantee future results, levels of activity, performance or
achievements, and you should not place undue reliance on our
forward-looking statements. Our forward-looking statements do not
reflect the potential impact of any future transactions or strategic
alliances. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various
factors, including the availability of financial resources,
management's efforts to reduce expenses in specific business areas or
across the company, recent economic uncertainty, weakness in the
business of our customers, Innoveda's ability to develop new products
and market acceptance of those products, the effects of business
combinations and dispositions and any related financial charges,
Innoveda's ability to successfully integrate its business
combinations, the cyclical nature of the electronics industry, the
failure of Innoveda's quarterly results to meet market expectations,
the intense competition Innoveda faces, and the other risks described
in Innoveda's annual report on Form 10-K for the fiscal year ended
December 29, 2001 as filed with the Securities and Exchange Commission
on March 29, 2002, and the other public filings made by Innoveda with
the SEC, which factors are incorporated herein by reference.
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INNOVEDA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
First Quarter Ended
March 30, 2002 March 31, 2001
-------------- --------------
Revenue:
Software $5,730 $15,381
Maintenance 8,454 10,352
Services 1,523 1,525
------------- -----------
Total revenue 15,707 27,258
Cost and expenses:
Cost of software 1,226 1,759
Cost of maintenance 1,051 1,025
Cost of services 1,329 1,579
Sales and marketing 7,991 11,288
Research and development 4,920 7,652
General and administrative 1,359 2,166
Amortization of intangibles(1) 1,890 4,702
Amortization of stock compensation(1) 147 146
--------------- -----------
Total operating expenses 19,913 30,317
Operating loss (4,206) (3,059)
Other expense (295) (18)
--------------- -----------
Loss before income tax benefit (4,501) (3,077)
Income tax benefit (1,440) (970)
---------------- ----------
Net loss $(3,061) $(2,107)
================ ==========
Net loss per share:
Basic and diluted $(0.08) $(0.05)
================ =========
Weighted average shares outstanding:
Basic and diluted 40,035 39,036
================ =========
================ =========
(1)Operating income (loss)
excluding amortization $(2,169) $1,789
================ ========
================ ========
INNOVEDA, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 30, 2002 December 29, 2001
-------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents $8,597 $7,704
Accounts receivable, net 16,087 21,876
Prepaid expenses and other 2,347 3,744
Deferred income taxes 3,962 3,960
----------------- ------------
Total current assets 30,993 37,284
Equipment and furniture, net 4,264 4,850
Capitalized software costs, net 2,415 2,342
Purchased technology and other
intangibles, net 23,528 25,404
Goodwill and other 1,968 2,412
------------------- -----------
Total assets $63,168 $72,292
=================== ===========
=================== ===========
LIABILITIES
Current liabilities:
Long-term debt, current portion $4,875 $4,000
Capital lease obligations, current
portion 158 270
Accounts payable 2,572 3,648
Accrued liabilities 14,960 18,122
Deferred revenue 20,160 20,776
----------------- ---------------
42,725 46,816
Long-term debt - 1,750
Other long-term liabilities 1,338 1,322
Deferred income taxes 9,299 10,013
------------------ ---------------
------------------ ---------------
Total liabilities 53,362 59,901
STOCKHOLDERS' EQUITY
Common stock 406 403
Treasury stock (1,663) (1,663)
Additional paid-in capital 117,663 117,440
Notes due from stockholders (932) (932)
Deferred compensation (379) (526)
Accumulated deficit (104,711) (101,650)
Accumulated other comprehensive
loss (578) (681)
-------------------- ---------------
-------------------- ---------------
Total stockholders' equity 9,806 12,391
Total liabilities and
stockholders' equity $63,168 $72,292
================== ===============
Contact:
Innoveda
Investor Contact: Kevin O'Brien
Vice President
Finance and Chief Financial Officer
(508) 303-5253
OR
Innoveda Investor Relations
(508) 303-5507
OR
Press Contact: Len Harmon
508-303-5346
lharmon@innoveda.com
