Innoveda, (Nasdaq:INOV), provider of electronic product software and services, today reported financial results for the fourth quarter and year ended December 29, 2001, including a return to profitability as previously forecast. For the fourth quarter, revenue of $22.1 million and operating income, before amortization, of $2.6 million exceeded consensus street estimates. Net income for the quarter was $1.0 million, or $0.02 per share. For the same period last year, Innoveda reported revenue of $30.8 million, operating income, before amortization, of $4.9 million and a net loss of $1.2 million, or $0.03 per share.
Revenue for the year ended December 29, 2001 was $91.4 million and the operating loss, before amortization and unusual charges, was $2.1 million. Including amortization, restructuring charges and a non-cash asset impairment charge of $32.9 million, related to the restructuring completed in August 2001, the net loss for the year was $42.6 million, or $1.09 per share. For the comparable period last year, Innoveda reported revenue of $89.9 million, operating income of $10.1 million, before amortization and unusual charges, and a net loss of $11.2 million, or $0.40 per share.
"The economic challenges of 2001 impacted many electronic design automation (EDA) customers, causing them to reevaluate all spending decisions," said President and Chief Executive Officer William J Herman. "By taking action last August to restructure Innoveda and focus on customers' critical-path needs in key market segments, we created a business model for technology leadership and profitability."
During the fourth quarter, Innoveda launched a comprehensive strategic partner program and continued strengthening its worldwide sales organization. The company provided co-verification for Motorola host processors in its hardware/software co-design product. Innoveda also saw renewed interest in the area of PCB design. New releases of Innoveda's PowerPCB(TM) and DxDesigner(TM) solutions were successfully launched both in stand-alone and bundled versions with several large sales during the quarter. The company's electromechanical business continued to show solid growth, with significant orders for its TransDesign(TM) solution in Q4.
"During 2001 we saw a change in our mix of business," added Herman. "Compared to 2000, our electromechanical business increased from 2 to 5% of total orders; our PCB business increased from 68 to 70% of total orders, driven by our high-speed design technology; and our system-level design business declined from 30 to 25% of total orders."
Business Outlook for Fiscal 2002 "As a result of our restructuring in August 2001, we resized the company to an annual revenue run rate of approximately $80 million," Herman said. "Based on current market conditions and the overall economic outlook, we are planning our business in a fiscally conservative manner for 2002. For the year, we expect revenue to grow from our current run rate by 10 to 12%, slightly exceeding industry growth forecasts. At this level, our goal is to achieve an operating margin of 12% before amortization and unusual charges. We are planning on revenue for the first quarter of the year of approximately $18 million and, by actively managing expenses, expect to generate modest operating income, before amortization and unusual charges."