UGS Reports Continued Quarterly And Year-Over-Year Growth

Performance marks ninth consecutive quarter of year-over-year total revenue growth for product lifecycle management (PLM) industry leader

PLANO, Texas, Nov. 14 /PRNewswire/ -- UGS Corp., a leading global provider of product lifecycle management (PLM) software and services, today announced financial results for the third quarter ended September 30, 2005. In the third quarter, UGS marked its ninth consecutive quarter of year-over-year total revenue growth and expanded its market leadership position in the high-growth collaborative Product Development Management (cPDM) space with a year-over-year 73.8 percent revenue increase including acquisitions, or 45.9 percent without acquisitions.

UGS' performance was driven by continued growth in its two key product segments (cPDM and CAx) and growth in each of its geographic regions.

    Third quarter financial highlights include:
    -- Total revenue increased to US$290.2 million, or 23.4 percent growth
       over the same period a year earlier.  That includes US$89.8 million in
       license software revenue, or a 24.9 percent year-over-year increase.
       The acquisition of Tecnomatix Technologies Ltd. added US$20.5 million
       in overall revenue and US$7.5 million in license software revenue.  The
       company saw an increase in total revenue in each geographic region
       compared to the same period in 2004.
    -- Reported operating income was US$19.3 million, a 153.9 percent year-
       over-year increase, and includes the impact of acquisition-related
       intangible amortization costs of US$39.2 million.
    -- EBITDA (defined below) was US$63.8 million, or 23.6 percent growth over
       the same period a year earlier.  This was in line with company
       expectations and includes its decision to increase the investment in
       research and development, selling and marketing, and the increase in
       costs associated with being an independent company.
    -- In the figures presented above, the company has not made adjustments
       for the impact of deferred revenues written off in connection with the
       acquisition of the company and acquisitions by the company.  These
       write-offs had the effect of reducing third quarter 2005 revenues and
       earnings by US$2.2 million and third quarter 2004 revenues and earnings
       by US$16.5 million.

"We remain focused on growing our business through enabling global innovation networks for our customers. Following the quarter where we marked our one-year anniversary of operating independently, we continue to see a steady stream of cPDM growth and enterprise contracts," said Tony Affuso, chairman, CEO and president of UGS. "Our customer focus and our leadership position in the PLM market is driving our continued growth and fueling the customer innovation announcements that highlight our success in creating value through global innovation networks."

Customer Innovation Leadership Announcements

UGS issued two announcements today (see separate releases) highlighting key milestones from the third quarter:

    -- In a separate announcement today, UGS announced that MTU Aero Engines
       GmbH, Germany's leading aircraft engine manufacturer, standardized on
       UGS for digital product development as part of euro 1 million (US$1.2
       million) contract extension.  Under the new extension MTU Aero Engines
       will add another 85 seats of NX(TM) software, replacing the existing
       computer-aided design (CAD) software.
    -- In a separate announcement today, UGS announced that Renishaw, the
       world's leading supplier of metrology and spectroscopy products,
       selected UGS Tecnomatix(TM) solutions to streamline its new product
       introduction (NPI) processes.  The company will use Tecnomatix digital
       manufacturing software to better manage its manufacturing systems by
       shortening the design cycle, removing wasteful processes and reducing
       the number of file formats required to produce new products.

    Additional Customer Innovation Leadership Announcements

In the third quarter UGS announced major customer innovation leadership contracts (the company expects to realize revenue from the contracts highlighted below over multiple quarters) and executed key product launches. Contract announcement highlights:

    -- Announced that it extended its PLM agreement with General Motors (GM)
       and that GM will leverage the Open Manufacturing Backbone(TM) (OMB),
       UGS' globally-scalable digital manufacturing technology platform, to
       enhance collaboration at the plant floor level.
    -- Announced that Patria Vehicles Oy, part of the Patria Group,
       standardized on UGS' NX and Teamcenter PLM software.  The agreement
       reinforces UGS' position as leading PLM provider in Finland and creates
       a framework to deploy NX and Teamcenter for armored wheeled vehicles,
       Patria Vehicles' flagship product.  NX replaced Patria Vehicles'
       existing CAD solutions.
    -- Announced that Pilatus Aircraft Ltd., the world's leading manufacturer
       of single-engine turboprop aircraft, awarded UGS a $1 million expansion
       contract as the company continued its standardization on UGS'
       Teamcenter for PLM.
    -- Announced that leading Swedish contract manufacturer, Partnertech,
       signed a three-year extension for UGS(R) digital manufacturing

    Product announcement highlights:
    -- Launched Version 4 of NX, the latest release of the company's
       comprehensive software solution for digital product development.
       Building on its industry-leading ability to capture knowledge and
       simulate performance throughout the product development process, NX 4
       includes hundreds of customer-driven enhancements that improve
       manufacturers' ability to differentiate their products and to transform
       their process of innovation.  New features address product styling,
       design, simulation and manufacturing, along with data migration tools
       that benefit I-deas(R) software users transitioning to NX.
    -- Through the launch of UGS' new mid-market product portfolio -- UGS
       Velocity Series(TM) -- UGS became the first company to bring enterprise
       PLM to the mid-market.  UGS Velocity Series includes the industry's
       first comprehensive, preconfigured portfolio of digital product design,
       analysis and data management software.  New products within UGS
       Velocity Series include:
       - Teamcenter Express, a breakthrough mid-market solution for cPDM that
         applies  pre-configured industry best practices to provide ease of
         installation, setup, ease of use and support, for a lower total cost
         of ownership.  It manages the complete design process for engineering
         organizations currently experiencing a data explosion brought on by
         rapidly expanding product complexity.
         - Solid Edge(R) Version 18, which includes integrated cPDM technology
           and delivers hundreds of enhancements, including new analysis and
           data management features.
         - FEMAP(R) 9.1, the latest version of the world's most popular PC-
           based computer-aided engineering application -- a robust pre- and
                     post-processing  finite  element  modeling  application.    FEMAP  9.1
                      delivers  in-depth  finite  element  modeling  for  both  full  time
                      experts  and  occasional  users.

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