Telelogic Reports Second Quarter 2002 Results

Telelogic Reports Second Quarter 2002 Results - Company Maintains Profitability for Third Consecutive Quarter With Improved Earnings and Strong License Sales - MALMÖ, Sweden - July 18, 2002 - Telelogic (Stockholm Exchange: TLOG), the leading global provider of solutions for advanced systems and software development, today announced financial results for the second quarter 2002, ending June 30. Revenue for Q202 amounted to US$29.9 million (SEK 290 million), a decrease of 21 percent (SEK 28 percent) from US$37.8 million (SEK 400 million) in Q201. Compared with the previous quarter and excluding exchange rate effects, revenue increased 2.7 percent, from US$27.8 million (SEK 292 million). On a consecutive basis, new license sales increased 17 percent from Q102. Compared to the same quarter 2001, sales of new licenses and maintenance agreements fell 12 percent. Telelogic has rightsized its services business during the first six months and lowered the number of consultants by 17 percent. Services revenue during the quarter decreased 22 percent compared with Q102. Following strong license sales and a continued successful reduction of overall costs by 8 percent compared with the previous quarter, the company reported a positive operating profit for the third consecutive quarter. Excluding goodwill amortization and costs for restructuring, earnings totaled US$0.9 million (SEK 9.0 million). This corresponds to an operating margin excluding restructuring costs and goodwill amortization of 3.1 percent. The cash flow for the quarter was US$-0.6 (SEK -6.3 million), resulting in a positive cash flow for the first half- year of US$5.6 million (SEK 54.6 million). Liquid funds totaled US$19.0 million (SEK 175.4 million) at quarter end. "Even in a tough global market economy, we have again delivered positive results and are continuing to reduce our cost base and improve productivity," said Anders Lidbeck, President and CEO of Telelogic. "We are sequentially growing our new license business in all regions and we are broadening our market focus beyond telecom. We are now achieving growing license revenues outside the telecom sector compared to the last quarter. This could only be achieved because of the strong commitment and dedication of our unparalleled staff." Telelogic's U.S. operations continued to improve with revenues increasing 3 percent, excluding exchange rate effects, compared with last quarter. For the third consecutive quarter U.S. operations delivered 40 percent contribution margins. The Asian operations also showed improvement with an 18 percent revenue increase over the first quarter. This is partly due to a broader customer focus towards key accounts in the consumer electronics and military/aerospace industries. In Europe demand remains weak, resulting in a slight drop in revenues in Germany and the Nordic region compared with Q102. "Despite market conditions, we remain committed without question to maintaining our technology leadership position. This was evident in the second quarter with the successful launch of Telelogic Tau®/Tester(TM) and Telelogic Synergy(TM) with ActiveCM(TM)," continued Lidbeck. "Tau/Tester is Telelogic's first automated software testing tool with the sophistication and robust functionality of the latest development tools, while Synergy is the industry's first transparent change and configuration management tool. These innovative and unique products will further strengthen our competitive position as well as open up new opportunities in other growth markets." 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/investor 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. About Telelogic Founded in 1983, Telelogic® (www.telelogic.com) is the leading global provider of solutions for advanced systems and software development. The company's automated application lifecycle solution includes integrated best-in-class software and professional services for requirements management, change and configuration management, development, testing, and documentation. Telelogic enables organizations to improve quality and predictability, while reducing time-to-market and overall costs in systems and software development. Built on an open architecture that ensures interoperability with other leading third-party solutions, Telelogic's products are based on international standardized languages and notations. Telelogic participates in 3GPP and OMG to create future communication technologies and visual software development languages. Headquartered in Malmö, Sweden, with U.S. headquarters in Irvine, California, the company has more than 900 employees worldwide. Customers include Airbus, Alcatel, BMW, Boeing, BT, DaimlerChrysler, Deutsche Bank, Ericsson, Lockheed Martin, Lucent Technologies, Motorola, NEC, Nokia, Philips and Siemens. Telelogic, Telelogic DOORS, and Telelogic Tau are the registered trademarks of Telelogic AB. Telelogic Synergy and Tau/Tester are trademarks of Telelogic AB. All other trademarks are the properties of respective holders. Contacts: Anders Lidbeck Fredrik Sjöholm President & CEO Director Investor Relations Phone: +46 40 174700 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/2002/07/18/20020718BIT00020/wkr0001.doc The full report http://www.waymaker.net/bitonline/2002/07/18/20020718BIT00020/wkr0002.pdf The full report

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Telelogic is a leading global provider of solutions for advanced systems and software development. Telelogic's intuitive, best-in-class software tools automate and support best practices throughout the development lifecycle, leaving development teams free to concentrate on core competencies and apply their skills and energy to value-added tasks. By optimizing each phase of development, Telelogic enables companies to deliver higher quality systems and software with greater predictability, reduced time-to-market and lower overall costs. To ensure interoperability with third-party tools, Telelogic's products are built on an open architecture and standardized languages.