Moldflow Reports Results For Q1 2007

FRAMINGHAM, Mass.—(BUSINESS WIRE)—November 6, 2006— Moldflow Corporation (NASDAQ: MFLO) today announced the results for its first quarter of the 2007 fiscal year.

-- Non-GAAP net income of $2.1 million, or $0.18 per diluted share, was up 266% from our first fiscal quarter of 2006 and 16% sequentially; and net income as reported in accordance with GAAP was $1.7 million, or $0.14 per share. Net income includes a tax benefit of $562,000 related to a change in the tax position of one of the Company's foreign subsidiaries.

-- Revenue of $15.3 million was flat from the corresponding quarter of fiscal 2006 and represented an 11% sequential decrease, consistent with usual seasonal trends.

-- Total product revenue of $8.0 million represented a decrease of 9% over the same period of the prior year and 19% sequentially.

-- Total services revenue of $7.3 million represented an increase of 12% over the same period of the prior year and 1% sequentially.

-- Revenue from Design Analysis Solutions totaled $11.6 million or 76% of total revenue and represented a 2% increase when compared to the same period last year and a 9% sequential decrease.

-- Revenue from Manufacturing Solutions totaled $3.7 million or 24% of total revenue, and represented a 6% decrease when compared to the same period last year and a 14% sequential decrease.

-- Regionally, revenue in our Asia/Pacific region represented 36% of total revenue, while the Americas represented 35% and the European region represented 29% of total revenue, respectively.

-- Share repurchase program returned 114,500 shares to treasury at an average net price of $12.12 per share equating to approximately $1.4 million in total cash payments.

-- Operations generated $1.2 million of cash.

Commenting on the first fiscal quarter, Roland Thomas, Moldflow Corporation's president and CEO said, "We are pleased to report that both of our business divisions are operating in-line with our expectations. Overall, we demonstrated increased operational leverage and corresponding improvements in net income and earnings per share in our first fiscal quarter. Revenue for the first quarter in our Design Analysis Solutions division showed slight growth year-over-year, which is consistent with our expectations. We continued to hire new direct sales representatives and establish new distributors to further our geographic expansion objectives. Our Manufacturing Solutions division produced expanded gross margins and operating profit despite lower year-over-year revenues."

Business Outlook

The current business outlook is based on information as of November 6, 2006 and is current as of that day only. We continue to expect revenue for our full fiscal 2007 year to grow in the range of 5% to 7% when compared to fiscal 2006 and non-GAAP net income per diluted share for full fiscal year 2007 to increase between 35% and 50% as compared to fiscal 2006, resulting in non-GAAP net income per diluted share of approximately $0.68 to $0.75. Non-GAAP net income per diluted share excludes charges for share-based compensation expenses throughout the full fiscal year which are expected to be approximately $1.9 million, net of related tax effects. GAAP net income per diluted share is therefore expected to be between $0.53 and $0.60.

The Company has provided its fiscal 2007 net income and net income per diluted share guidance above. This guidance is provided on a non-GAAP basis. Non-GAAP net income and non-GAAP net income per diluted share exclude estimated charges for share-based compensation costs. Because there are significant limitations in estimating the impact of share-based compensation costs, including but not limited to, the number of incentive shares that will be exercised and/or cancelled during the period, the fair market value of the Company's share price on the exercise dates, and the number and type of issuances that may be awarded in any year, the estimated charges and tax benefits associated with share-based issuances are unpredictable. For these reasons, the actual impact of share-based compensation on GAAP net income and GAAP net income per diluted share may differ materially from the estimated amounts included in the guidance above.

Use of Other Non-GAAP Financial Measures

Net income and net income per diluted share, excluding, as applicable, share-based compensation expenses and restructuring charges are supplemental non-GAAP financial measures. Moldflow is presenting these measures because management uses this information in evaluating the results of the Company's operations and for internal planning and forecasting purposes and believes that this information provides additional insight into our operating results, as well as enables comparison of these results to prior periods. These measures should not be considered an alternative to measurements required by GAAP, such as net income and net income per diluted share, and should not be considered a measure of our liquidity. In addition, these non-GAAP financial measures may not be comparable to similar measures reported by other companies. With respect to the non-GAAP financial measures for the first quarter, the GAAP financial measures most directly comparable to each non-GAAP financial measure used or discussed in this press release and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure are included in this press release and can be found on the Investors page of the Moldflow Web site at

Financial Results

The unaudited condensed consolidated financial statements for the first quarter of fiscal 2007 follow.

Information Dissemination

Moldflow will host a conference call to discuss the first quarter of fiscal 2007 results as well as future outlook at 11:00 a.m. US Eastern time, Monday, November 6, 2006. The conference call dial-in number is 877-314-4022, Conference ID #9602966. The call will be recorded with replay (dial-in # 800-642-1687, PIN# 9602966) which will be available until November 13, 2006. In addition, a live Webcast of the conference call, together with this press release and supplemental financial information, can be accessed through the Company's Website at in the Investors section. The call, press release and supplemental information will be archived and can be accessed through the same link.

About Moldflow Corporation

Moldflow (NASDAQ: MFLO) is the leading global provider of design through manufacturing solutions for the plastics injection molding industry. Moldflow's products and services allow companies to address part and mold design issues at the earliest stage and maximize productivity and profitability on the manufacturing floor. Visit for more information.

Note to editors: Moldflow is a registered trademark of Moldflow Corporation or its subsidiaries worldwide. All other trademarks are properties of their respective holders.

Cautionary Statement Regarding Forward-Looking Information

Pursuant to the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, the Company notes that any statements contained in this press release that are not historical facts are forward-looking statements. Such forward-looking statements include, but are not limited to, statements by Moldflow's President and CEO, statements under Business Outlook and those regarding Moldflow's or management's intentions, hopes, beliefs, expectations, projections, plans for the future, estimates and statements regarding any potential operating leverage and cost savings during the 2007 fiscal year and the expected performance of our Design Analysis Solutions and Manufacturing Solutions divisions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include the risks that a weak world economy will slow capital spending by the Company's prospective customers, that the Company may not be able to recognize the revenue derived from orders received, that the sales cycle may lengthen, that our restructuring activities, particularly with respect to our Manufacturing Solutions business, will result in the disruption of our sales cycles and research and development activities, that foreign currency fluctuations may adversely affect our financial results, that our distribution partners will not achieve their revenue objectives, that the overall mix of revenue differs materially from that projected, that share-based compensation expense will continue to have a negative impact on our GAAP operating profit, net income and earnings per share calculations, that changes in US or foreign tax legislation, or on-going tax inquiries and the on-going tax audits of our subsidiary companies, including Australia, may result in a higher level of income tax expense than that projected, that our hiring plans may not be fully executed and as a result we may not be able to meet sales demand and with respect to the potential operating leverage and cost savings during the 2007 fiscal year, the risk that the Company will not realize the anticipated cost savings from our restructuring plans during the expected time frame, or, even if the anticipated cost savings are achieved, that the Manufacturing Solutions business unit may remain unprofitable and its business may suffer. Other risks and uncertainties are detailed from time to time in reports filed by Moldflow with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended June 30, 2006 as well as its subsequent quarterly and annual filings. Revenue and net income guidance offered by senior management today represents a point-in-time estimate and is based on information as of the date of this press release. Senior management has made numerous assumptions in providing this guidance which, while believed to be reasonable, may not prove to be accurate. In addition, as noted above, there are numerous factors that may cause actual results to differ materially from the guidance provided. The Company expressly disclaims any current intention or obligation to update the guidance provided or any other forward-looking statement in this press release to reflect future events or changes in facts assumed for purposes of providing this guidance or otherwise affecting the forward-looking statements contained in this press release.

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