Telelogic Reports Fourth Quarter and Fiscal Year 2002 Results

Telelogic Reports Fourth Quarter and Fiscal Year 2002 Results - Profitability and Positive Cash Flow Achieved for Quarter and Fiscal Year 2002 Due to Increasing License Sales - MALMÖ, Sweden - January 22, 2003 - Telelogic (Stockholm Exchange: TLOG), the leading global provider of solutions for advanced systems and software development, today announced financial results for the fourth quarter and fiscal year 2002, ending December 31. Revenue for the fourth quarter totaled US$30.4 million (SEK 275 million) compared with US$36.4 million (SEK 380 million) in Q401, a decrease of 28 percent. Compared with the previous quarter, revenues increased 4 percent from US$28.3 million (SEK 264 million). Sales of new licenses and maintenance agreements experienced another strong quarter, increasing 10 percent compared with Q302. A 13 percent decrease in services revenue for the quarter compared with the previous quarter illustrated the company's increasing focus on new licenses and maintenance sales. Overall costs for the quarter, including restructuring charges, fell slightly compared with the previous quarter. This enabled positive earnings totalling US$1.9 (SEK 16.8 million) excluding goodwill amortization and costs for restructuring. The cash flow for the fourth quarter was also positive with liquid funds increasing by US$1.1 million (SEK 9.7 million). For fiscal 2002, revenues decreased 25 percent to US$116.2 million (SEK 1,121 million) compared to US$143.3 million (SEK 1,495.0 million) for FY01. Much of the decrease in revenues is attributed to the company's rightsizing of its professional services business during the last year. Revenues from professional services decreased 50 percent during FY02 whereas sales of new licenses and maintenance agreements decreased 12 percent. For the year, Telelogic delivered positive earnings excluding goodwill amortization and costs for restructuring totalling US$2.9 (SEK 28.1 million). Cash flow for the year was also positive with liquid funds increasing by US$3.3 (SEK 31.6 million). Liquid funds totaled US$18.1 million (SEK 160.0 million) at year end. "Despite being a challenging year for the industry, Telelogic delivered strong license sales. Coupled with a rightsizing of our consulting operations and strong cost control, the company ended 2002 with a positive operating result in a financially sound position with positive cash flow and profitable operations before restructuring charges for the year," said Anders Lidbeck, President and CEO for Telelogic. U.S. operations continued to prosper and increase revenues compared with Q302 and the same quarter last year. For the fifth consecutive quarter, U.S. operations delivered high margins. In Europe all market operations stabilized except the Nordic region where revenues increased by 25 percent due to improved license sales. Asian operations delivered increased revenues and earnings compared with the previous quarter. However, Japan had a challenging quarter, whereas the other markets in Asia, especially India and Korea continue to show growth and opportunity. "Telelogic is well positioned to meet increasing demand for our integrated, state-of-the-art tools that are the technology leaders in many catagories," said Lidbeck. "This has been validated during the recent quarter through two separate independent tool evaluations performed by French analyst firm Yphise. In its report 'Requirements Management Tools' Telelogic DOORS® was named the technology and market leader and Telelogic CM Synergy(TM) was named market leader based on technical merit and extensive customer feedback in the 'Application Change Management Software' report." Outlook for 2003 In 2002, the company's market underwent considerable consolidation. However, during 2003 it is forecasted that growth will return. Telelogic is well positioned to meet an increasing demand. During 2003, Telelogic will take measures to return to positive growth. The company's goal is to achieve good growth in the US and Asian markets during 2003 and to increase license sales globally for fiscal 2003. During 2003, Telelogic will continue to focus on improved earnings in order to achieve the goal of 20 percent operating margins during 2004, set in 1999. The forecast is that earnings before taxes for fiscal 2003 will be positive. During 2003, Telelogic will report any restructuring costs as operating costs. The forecast, however, is that further actions that would require significant restructuring charges will not be necessary during 2003. Note: The results presented are based on Swedish Accounting Principles. This report has not been subject to special review by Telelogic's auditors. During the quarter, there has been no modification of the accounting principles. 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 2001 Annual Report. Contacts: Anders Lidbeck Fredrik Sjöholm President & CEO Director Investor Relations Phone: +46 40 650 00 00 Phone: +46 40 650 65 22 E-mail: fredrik.sjoholm@telelogic.com ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/01/22/20030122BIT00090/wkr0001.doc The full report http://www.waymaker.net/bitonline/2003/01/22/20030122BIT00090/wkr0002.pdf The full report