July 26, 2004
UGS Reports Revenue Growth And Other Good News
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UGS Reports Revenue Growth And Other Good News
UGS announced financial results for the second quarter ended June 30, 2004. Financial highlights from the second quarter include:
"UGS continues to provide strong value to our world-class client base, which is enabling us to excel by exceeding market growth rates in a growing market," said Tony Affuso, chairman, CEO and president of UGS. "In the second quarter, we continued to leverage our strategy and leadership position in the PLM market globally by winning key contracts, developing and introducing new products, further integrating our product line and driving major initiatives to fruition. We're off to a strong start in our new world."
In addition, for the last six months ending June 30, 2004, UGS reported revenue of US$470.9 million, or 13 percent growth as compared to the same period a year earlier; and EBITDA of US$109.3 million, or 18 percent growth as compared to the same period a year earlier.
The company said its performance reflects continuing strong demand for its software, including Teamcenter digital product data management and collaboration software and NX knowledge-driven digital product development software.
UGS announced on May 27 the closing of its acquisition by a group of private equity firms, Bain Capital, Silver Lake Partners and Warburg Pincus. The firms acquired UGS from EDS for US$2.05 billion in cash. The transaction represents the largest private equity investment ever made in a technology company.
Among other business highlights from the second quarter, UGS:
"The second quarter was a landmark quarter for UGS in several ways, most notably with our launch as an independent software business in partnership with our new sponsors, and one of significant strategic achievement across the board," Affuso said. "We are extremely enthusiastic about our prospects for continued long-term growth as more leading organizations realize the value of PLM as a true enterprise strategy."
The global market for PLM software and services is expected to grow by a compound annual growth rate of 8 percent through 2007 to more than US$9.2 billion, according to Daratech. Through 2007, Daratech expects the product data management and collaboration segment of the PLM market, which UGS leads on the strength of its Teamcenter portfolio, to grow 16 percent, compounded annually.
Surprise PDM Revenue Growth Leader Forecast For 2004
According to a report by technology market research firm, Daratech, think3 is expected to lead its industry in PDM revenue growth by a wide margin next year. In a report released July 8, 2004, Daratech projects the product data management (PDM) market will grow 15 percent by 2008, but think3's expected 60 percent revenue growth in 2004 with its thinkteam product ranked above several other PDM providers, including Dassault's ENOVIA and SMARTEAM, MatrixOne's Matrix platform and CoCreate's OneSpace.net.
Daratech believes that vendors emphasizing the ability of PDM tools to reduce risk, cost, schedule, rework and product failures will play a key role in the market's future. PDM users, specifically small and medium sized businesses, are currently looking for short-term returns and less expensive implementations causing providers to create "lighter" versions of their traditional PDM systems.
"Rather than just scaling down a more expensive and cumbersome product, think3 creates solutions to specifically meet the needs of SMB organizations," said Dan Meyer, Vice President of Worldwide Marketing at think3. "Our thinkteam product provides customers with better data management and collaboration capabilities but without the hefty expense and lengthy installation of traditional PDM, helping to break down barriers to product lifecycle management (PLM) adoption."
thinkteam is think3's ready-to-use PDM system, which provides a "CAD neutral" platform for successfully implementing a PLM solution to manage product information regardless of the authoring system used to produce it, should it be AutoCAD, PRO/Engineer, MS Office, or thinkdesign (think3's flagship MCAD product).
thinkteam reduces time and cost from the product development process, freeing engineers to focus on what they do best -- design new products. think3's product provides the right foundation for an integrated product development environment and delivers a powerful platform for product innovations, enabling companies to bring better products to market faster.
application). On the PDM side, thinkteam has a broader market appeal, because it is quite neutral in the data that it is capable of managing - whether it originates from AutoCAD, Pro/E, or Microsoft Office. The products combined, along with some relatively recent and ongoing management changes seem to be pointing the company in a positive direction toward the future.
Jeffrey Rowe is the editor and publisher of MCADCafé and MCAD Weekly Review. He can be reached at
Email Contact or 408.850.9230.
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-- Jeff Rowe, MCADCafe.com Contributing Editor.
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