Telelogic Reports Third Quarter 2002 Results

Telelogic Reports Third Quarter 2002 Results - Company Achieves Profitability for Fourth Consecutive Quarter - MALMÖ, Sweden - October 17, 2002 - Telelogic (Stockholm Exchange: TLOG), the leading global provider of solutions for advanced systems and software development, today announced financial results for the third quarter 2002, ending September 30. Revenue for Q302 amounted to US$28.3 million (SEK 264 million) compared with US$32.3 million (SEK 340 million) in Q301. Compared with the previous quarter and excluding exchange rate effects, revenues decreased marginally, from US$29.9 million (SEK 290 million). Excluding exchange rate effects, new licenses and maintenance revenues were in line with Q301. Services revenues decreased by 49 percent (42 percent excluding exchange rate effects) compared to the same quarter 2001. This is due to a restructuring of the company's professional services business during the last year, which reduced the total number of consultants companywide. Including restructuring charges of US$2.1 million (SEK 19.8 million) overall costs fell 39 percent compared to the same quarter 2001 and 2 percent compared to the previous quarter. Excluding goodwill amortization and costs for restructuring, earnings totaled US$0.12 million (SEK 1.1 million. The cash flow for the first nine months of the year is positive and amounts to US$3.1 million (SEK 28.8 million). Liquid funds totaled US$16.1 million (SEK 150.3 million) at quarter end. "During this quarter Telelogic's strategy of focusing on specific market segments in addition to telecom has been validated," said Anders Lidbeck, president and CEO of Telelogic. "Sales to the defense/aerospace, automotive and finance industries continued to improve and partially compensated for the on-going weakness in telecom. With a strong focus on adjusting costs, we once again can deliver substantially improved earnings compared to the same quarter last year and we reiterate our goal of achieving a positive operating income for 2002, excluding goodwill amortization and restructuring costs." The U.S. operations have stabilized with revenues and margins in line with the previous quarter. This is partially attributed to a reduced dependancy on telecom related business and increased sales from the defense/aerospace and automotive segments. For the fourth consecutive quarter, the U.S. operations delivered high margins. Margins have increased for operations in Europe, except in the Nordic region. The weakness in the Nordic region continued due to the high reliance on professional services business and the telecom sector. The number of consultants in this region has gradually decreased over the year and it is estimated that further restructuring measures will be necessary. In Asia, operations in Japan continue to develop well with stable revenues and high margins. Sales in other parts of Asia showed less strength, but margins were attractive. "While market conditions remain challenging, Telelogic has continued to move forward aggressively to ensure a leadership position. After the end of the quarter we launched two new advanced visual development tools as part of our new Tau Generation2 product family. These tools have generated great interest during the beta test programs and were in fact ordered by customers prior to their official launch on October 7. In September, our market leading requirements management tool, Telelogic DOORS®, was enhanced with electronic signature capability. This opens up many new markets, such as medical technology and drug industries," continued Lidbeck. "I am confident that the continuing enhancements to our product portfolio will further strenghten our competitive position going forward." 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. About Telelogic Founded in 1983, Telelogic® is the leading global provider of solutions for advanced systems and software development. The company's integrated best-in-class software tools and professional services enable companies to automate their entire development lifecycle, resulting in improved predictability and overall costs. To ensure interoperability with other leading third-party tools, Telelogic's products are built on an open architecture and standardized languages. As an industry leader and technology visionary, Telelogic is actively involved in shaping the future of advanced systems and software development by participating in industry organizations like 3GPP, INCOSE, ITU-T, IEEE, MOST, OMG and others. Headquartered in Malmö, Sweden, with U.S. headquarters in Irvine, California, Telelogic has more than 900 employees worldwide. Customers include Alcatel, BAE Systems, BMW, Boeing, DaimlerChrysler, Deutsche Bank, Ericsson, General Motors, Lockheed Martin, Motorola, NEC, Nokia, Philips, Siemens, and Thales. For more information, please visit www.telelogic.com. 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 Telelogic, Telelogic DOORS, Telelogic DocExpress and Telelogic Tau are the registered trademarks of Telelogic AB. Telelogic Synergy and ActiveCM are trademarks of Telelogic AB. All other trademarks are the properties of respective holders. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/10/17/20021017BIT00040/wkr0001.doc The Full Report http://www.waymaker.net/bitonline/2002/10/17/20021017BIT00040/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.