Third quarter financial highlights include: -- EBITDA (defined below) was US$69.1 million, or an 8.3 percent growth over the same period a year earlier. Net income (loss) for the third quarter was US$(7.4) million. -- Operating income was US$15.9 million and includes the impact of acquisition-related intangible amortization costs of US$38.5 million. Operating income in the same period a year earlier was US$19.3 million and included acquisition-related amortization costs of US$39.2 million. -- Total revenue increased to US$295.5 million, 1.8 percent growth over the same period a year earlier. -- Software revenue increased to US$223.1 million (including license and maintenance revenues), or 1.6 percent growth as compared to the third quarter 2005. -- Revenue amounts are not adjusted for the impact of deferred revenues written off in connection with acquisitions. These write-offs had the effect of reducing third quarter 2006 revenues by US$0.3 million and 2005 revenues by US$2.2 million. Year-to-date highlights include: -- EBITDA (defined below) was US$186.5 million, or a 25.3 percent growth over the same period a year earlier. Net income (loss) for the first nine months of the year was US$(33.0) million. -- Operating income was US$20.6 million and includes the impact of acquisition-related intangible amortization costs of US$116.8 million. Operating income in the same period a year earlier was US$36.3 million and included acquisition-related amortization costs of US$111.6 million. -- Total revenue increased to US$866.0 million, 4.6 percent growth over the same period a year earlier. -- Software revenue increased to US$649.4 million (including license and maintenance revenues), or 5.7 percent growth as compared to the same period a year earlier. -- Revenue amounts are not adjusted for the impact of deferred revenues written off in connection with acquisitions. These write-offs had the effect of reducing year-to-date 2006 revenues by US$0.7 million and 2005 revenues for the same nine month period by US$10.2 million. Other financial highlights: -- Net cash from operating activities was US$111.6 million for the first nine months of the year. -- Long term debt as of Sept. 30, 2006, was US$1,155.3 million compared to a balance of US$1,212.0 million as of Dec. 31, 2005. This includes a debt pay-down of US$62.3 million.
"We've continued to be successful at working our strategic plan while still focusing on expanding our EBITDA and cash flow, and retooling our sales engine. Our continued product excellence and focus on customer success earned us contracts or additional business in the quarter with such companies as Boeing, DaimlerChrysler, Unilever, Visteon, Bosch Siemens, Northrop Grumman Ship Systems, Bayer Healthcare and the Jet Propulsion Lab," said Tony Affuso, chairman, CEO and president of UGS. "These contracts reflect the confidence we are receiving across the board from the market, as highlighted most notably by our ranking in the leaders quadrant of the new Gartner Magic Quadrant.
"As always, we continue to focus on customer success, and as a result our retention rate is higher than ever and our maintenance revenue continues to grow solidly."
Business Highlights -- UGS signed a new reseller agreement with Microsoft that extends the strategic alliance the two companies announced earlier this year. Under the new agreement, UGS becomes the first PLM company authorized to sell SQL Server 2005, Microsoft's flagship database software, directly to companies looking for a comprehensive PLM solution fully supported on the Microsoft(R) platform. (see separate release) -- PRTM, internationally recognized as the leading management consulting firm to technology-driven companies, joined the UGS Partner Program as a UGS Consulting and Systems Integration Alliance Partner. (see separate release) -- In the mid-market and channel space, UGS recorded a 35 percent increase in its indirect channel license revenue year-over-year and met its year-end channel capacity goal to increase the channel by 50 percent. (see separate release) -- Ford Motor Company expanded its global deployment of Teamcenter to include Tecnomatix as the global manufacturing data management and manufacturing process planning system to support process driven product design. This solution will enable the reduction of overall vehicle development cycle time by promoting concurrent engineering and globally distributing relevant data. -- An example of UGS' success in I-deas to NX migration was captured in a third quarter win with Larsen & Toubro Limited, India's largest technology-driven engineering and construction company. Through the migration, Larsen & Toubro consolidated multiple CAD systems and expanded into PLM. -- Wanfeng Auto Holding Group, a leader in China's auto industry and the largest aluminum alloy wheel producer in Asia, selected UGS' Teamcenter(R) Express software for its first collaborative product data management (cPDM) system. (see separate release)
The company expects to realize revenue from the contracts highlighted above over multiple quarters.
UGS will host its third quarter 2006 earnings call with securities analysts live on the Internet at 10:30 a.m. Central time, Monday, Nov. 13, 2006. Presentation slides will be posted on www.ugs.com at 8:30 a.m. Central time. See below for webcast/teleconference access information.
AUDIO ACCESS INFORMATION - WEB STREAMING URL: https://e-meetings.mci.com CONFERENCE NUMBER: 2024606 PASSCODE: UGS Note: Pop-up blockers must be disabled. To join: -- Go to the URL listed above -- Select Join an Event from the Events tab -- Enter all requested registration information and follow instructions to proceed AUDIO ACCESS INFORMATION - DIAL-IN NUMBER: +1-517-268-4880 PASSCODE: UGS NET CONFERENCE ACCESS INFORMATION URL: https://e-meetings.mci.com/nc/join/ CONFERENCE NUMBER: PA2024606 PASSCODE: UGS Audience members can join the event directly at: chttps://e-meetings.mci.com/nc/join.php?i=PA2024606&p=UGS&t=r NET REPLAY ACCESS INFORMATION To access the Net replays of this call, go to: https://e-meetings.mci.com/nc/join.php?i=PA2024606&p=UGS&t=r The replay will be available for 30 days, ending Dec. 13, 2006. About UGS
UGS is a leading global provider of product lifecycle management (PLM) software and services with nearly 4 million licensed seats and 46,000 customers worldwide. Headquartered in Plano, Texas, UGS' vision is to enable a world where organizations and their partners collaborate through global innovation networks to deliver world-class products and services while leveraging UGS' open enterprise solutions, fulfilling the mission of enabling them to transform their process of innovation. For more information on UGS products and services, visit