Mechanical Dynamics Reports 29% Growth in Revenue for Q1 2001; Earnings Jump 100% to $0.08 Per Share

Apr 24, 2001, 01:00 ET from Mechanical Dynamics, Inc.

    ANN ARBOR, Mich., April 24 /PRNewswire Interactive News Release/ --
 Mechanical Dynamics, Inc. (Nasdaq:   MDII), the leading worldwide supplier of
 virtual prototyping software and services, today reported revenue for the
 first quarter ended March 31, 2001 of $13.8 million, versus $10.7 million for
 the corresponding period in 2000.  First quarter net income was $491,000, or
 $0.08 diluted earnings per share, as compared to net income of $241,000, or
 $0.04 diluted earnings per share, reported in Q1 2000.
     Michael E. Korybalski, chairman and chief executive officer of Mechanical
 Dynamics, said, "We have gotten off to an extremely strong start in 2001.  In
 the first quarter, we delivered to expectations, generating 29% growth in
 revenue, 125% growth in operating profit, and 100% growth in EPS.  We realized
 immediate benefits from our acquisition of ESTECH in December 2000.  Our
 balance sheet remained very strong, as we closed March with more than $4.35 in
 net book value per share.  And, we enter Q2 with better revenue visibility
 than we've had in some time.  Our deferred revenue balance at the end of Q1
 grew by 38% over the balance one year ago."
     During the first quarter, Mechanical Dynamics received cumulative orders
 valued at more than $100,000 from each of 26 different companies, including
 Audi, Bosch, Bridgestone, Daihatsu, Fiat, Ford, General Motors, Honda R&D,
 Jasper Motorsports, Kozo Keikaku Engineering, Magneti Marelli, Mazda,
 Mitsubishi Electric, MTS Systems, Nissan, Peugeot, Toyota, Visteon,
 Volkswagen, and Yusoki Kogyo Co., among others.  Significant orders of less
 than $100,000 each came from a number of customers, including ADtranz, Boeing,
 Delphi Diesel Systems, Elasis, Ferrari Auto, Hyundai, Johns Hopkins
 University, Lockheed Martin, National Renewable Energy Laboratory, Nevada
 Automotive Test Center, Paccar Technical Center, Square D, Steyr-Daimler-Puch,
 Subaru Research Center, and United Technologies Corporation, among others.
     Korybalski added, "Our success has been driven by our continuing product
 line expansion, ongoing investments to extend our global sales and service
 infrastructure, and overall strong execution to plan.  Looking ahead, we are
 extremely well-positioned to take advantage of the trend toward widespread
 adoption of system-level virtual prototyping, as manufacturers worldwide
 strive to replace costly and time-consuming physical prototypes."
     Mechanical Dynamics pioneered the field of mechanical system simulation
 with its market-leading ADAMS(R) software, and has remained committed to
 extending the capabilities of this technology to benefit manufacturers in
 every industry worldwide.  Engineering teams use ADAMS to build and test
 functional virtual prototypes of their complex mechanical system designs.
 Mechanical Dynamics also offers a full range of implementation services,
 including consulting and training.  In this way, the company partners with its
 customers to help reduce the time, costs, and risks of the product development
 process and meet the "Smarter to Market(TM)" challenge.
     Except for historical information contained herein, some matters discussed
 in this news release constitute forward-looking statements which involve risks
 and uncertainties that could cause actual results to differ materially from
 those projected.  These include possible delays in developing, completing, or
 shipping new or enhanced products, as well as other risks or uncertainties
 that are detailed from time to time in reports filed by Mechanical Dynamics,
 Inc. with the Securities and Exchange Commission, including Mechanical
 Dynamics, Inc.'s registration statement on Form S-1 and related prospectus
 dated May 14, 1996 and the "Risk Factors" described therein.
     Additional information about Mechanical Dynamics can be obtained by
 writing to the company at 2300 Traverwood Drive, Ann Arbor, Michigan 48105.
 Phone: 734-994-3800.  Fax: 734-994-6418.
 E-mail: info@adams.com .  Online: www.adams.com .
     ADAMS and the Mechanical Dynamics logo are registered trademarks of
 Mechanical Dynamics, Inc.  All other company, brand, or product names are or
 may be trademarks of their respective holders.
 
                   Mechanical Dynamics, Inc. and Subsidiaries
                     Condensed Consolidated Balance Sheets
 
                                                     March 31,    December 31,
     in thousands                                      2001            2000
 
     Assets:                                        (Unaudited)
     Current assets:
      Cash and cash equivalents                        $15,060        $17,961
      Accounts receivable, net                          13,215         11,442
      Prepaid and deferred expenses                      2,908          3,255
        Total current assets                            31,183         32,658
     Property and equipment, net                         4,324          4,462
     Goodwill, net                                       6,684          6,768
     Other assets                                        1,760          1,981
     Total assets                                      $43,951        $45,869
     Liabilities and Shareholders' Equity:
     Current liabilities:
      Borrowings under lines of credit                     $82            $49
      Current portion of capital leases                    406            406
      Accounts payable                                   1,470          2,466
      Accrued expenses                                   5,375          7,152
      Deferred revenue                                   8,372          6,936
        Total current liabilities                       15,705         17,009
     Capital lease obligation, less current portion        497            658
     Minority interest                                     600            539
     Shareholders' equity:
      Common stock                                      21,818         21,998
      Preferred stock                                        0              0
      Retained earnings                                  6,040          5,819
      Accumulated other comprehensive income              (709)          (154)
        Total shareholders' equity                      27,149         27,663
     Total liabilities and shareholders' equity        $43,951        $45,869
 
 
                   Mechanical Dynamics, Inc. and Subsidiaries
                  Condensed Consolidated Statements of Income
 
                                                         Three Months Ended
                                                              March 31,
     in thousands except share and per share data        2001           2000
                                                             (Unaudited)
     Revenue:
      Software licenses                                 $6,191         $6,036
      Software maintenance services                      3,013          2,253
      Professional services and other                    4,637          2,450
        Total revenue                                   13,841         10,739
     Cost of revenue:
      Software licenses                                    977          1,099
      Services                                           4,068          2,554
        Total cost of revenue                            5,045          3,653
     Gross profit                                        8,796          7,086
     Operating expenses:
      Sales and marketing                                4,935          4,203
      Research and development                           1,698          1,446
      General and administrative                         1,317          1,026
      Goodwill amortization                                178            114
        Total operating expenses                         8,128          6,789
     Operating income                                      668            297
     Other income, net                                     119             85
     Income before income taxes and minority interest      787            382
     Provision for income taxes                            235            114
     Net income before minority interest                   552            268
     Minority interest in net income of subsidiary          61             27
     Net income                                           $491           $241
     Basic net income per common share                   $0.08          $0.04
     Weighted average common shares                  6,088,056      6,286,725
     Diluted net income per common share                 $0.08          $0.04
     Weighted average common and
      common equivalent shares                       6,220,446      6,287,077
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X96911570
 
 

SOURCE Mechanical Dynamics, Inc.
    ANN ARBOR, Mich., April 24 /PRNewswire Interactive News Release/ --
 Mechanical Dynamics, Inc. (Nasdaq:   MDII), the leading worldwide supplier of
 virtual prototyping software and services, today reported revenue for the
 first quarter ended March 31, 2001 of $13.8 million, versus $10.7 million for
 the corresponding period in 2000.  First quarter net income was $491,000, or
 $0.08 diluted earnings per share, as compared to net income of $241,000, or
 $0.04 diluted earnings per share, reported in Q1 2000.
     Michael E. Korybalski, chairman and chief executive officer of Mechanical
 Dynamics, said, "We have gotten off to an extremely strong start in 2001.  In
 the first quarter, we delivered to expectations, generating 29% growth in
 revenue, 125% growth in operating profit, and 100% growth in EPS.  We realized
 immediate benefits from our acquisition of ESTECH in December 2000.  Our
 balance sheet remained very strong, as we closed March with more than $4.35 in
 net book value per share.  And, we enter Q2 with better revenue visibility
 than we've had in some time.  Our deferred revenue balance at the end of Q1
 grew by 38% over the balance one year ago."
     During the first quarter, Mechanical Dynamics received cumulative orders
 valued at more than $100,000 from each of 26 different companies, including
 Audi, Bosch, Bridgestone, Daihatsu, Fiat, Ford, General Motors, Honda R&D,
 Jasper Motorsports, Kozo Keikaku Engineering, Magneti Marelli, Mazda,
 Mitsubishi Electric, MTS Systems, Nissan, Peugeot, Toyota, Visteon,
 Volkswagen, and Yusoki Kogyo Co., among others.  Significant orders of less
 than $100,000 each came from a number of customers, including ADtranz, Boeing,
 Delphi Diesel Systems, Elasis, Ferrari Auto, Hyundai, Johns Hopkins
 University, Lockheed Martin, National Renewable Energy Laboratory, Nevada
 Automotive Test Center, Paccar Technical Center, Square D, Steyr-Daimler-Puch,
 Subaru Research Center, and United Technologies Corporation, among others.
     Korybalski added, "Our success has been driven by our continuing product
 line expansion, ongoing investments to extend our global sales and service
 infrastructure, and overall strong execution to plan.  Looking ahead, we are
 extremely well-positioned to take advantage of the trend toward widespread
 adoption of system-level virtual prototyping, as manufacturers worldwide
 strive to replace costly and time-consuming physical prototypes."
     Mechanical Dynamics pioneered the field of mechanical system simulation
 with its market-leading ADAMS(R) software, and has remained committed to
 extending the capabilities of this technology to benefit manufacturers in
 every industry worldwide.  Engineering teams use ADAMS to build and test
 functional virtual prototypes of their complex mechanical system designs.
 Mechanical Dynamics also offers a full range of implementation services,
 including consulting and training.  In this way, the company partners with its
 customers to help reduce the time, costs, and risks of the product development
 process and meet the "Smarter to Market(TM)" challenge.
     Except for historical information contained herein, some matters discussed
 in this news release constitute forward-looking statements which involve risks
 and uncertainties that could cause actual results to differ materially from
 those projected.  These include possible delays in developing, completing, or
 shipping new or enhanced products, as well as other risks or uncertainties
 that are detailed from time to time in reports filed by Mechanical Dynamics,
 Inc. with the Securities and Exchange Commission, including Mechanical
 Dynamics, Inc.'s registration statement on Form S-1 and related prospectus
 dated May 14, 1996 and the "Risk Factors" described therein.
     Additional information about Mechanical Dynamics can be obtained by
 writing to the company at 2300 Traverwood Drive, Ann Arbor, Michigan 48105.
 Phone: 734-994-3800.  Fax: 734-994-6418.
 E-mail: info@adams.com .  Online: www.adams.com .
     ADAMS and the Mechanical Dynamics logo are registered trademarks of
 Mechanical Dynamics, Inc.  All other company, brand, or product names are or
 may be trademarks of their respective holders.
 
                   Mechanical Dynamics, Inc. and Subsidiaries
                     Condensed Consolidated Balance Sheets
 
                                                     March 31,    December 31,
     in thousands                                      2001            2000
 
     Assets:                                        (Unaudited)
     Current assets:
      Cash and cash equivalents                        $15,060        $17,961
      Accounts receivable, net                          13,215         11,442
      Prepaid and deferred expenses                      2,908          3,255
        Total current assets                            31,183         32,658
     Property and equipment, net                         4,324          4,462
     Goodwill, net                                       6,684          6,768
     Other assets                                        1,760          1,981
     Total assets                                      $43,951        $45,869
     Liabilities and Shareholders' Equity:
     Current liabilities:
      Borrowings under lines of credit                     $82            $49
      Current portion of capital leases                    406            406
      Accounts payable                                   1,470          2,466
      Accrued expenses                                   5,375          7,152
      Deferred revenue                                   8,372          6,936
        Total current liabilities                       15,705         17,009
     Capital lease obligation, less current portion        497            658
     Minority interest                                     600            539
     Shareholders' equity:
      Common stock                                      21,818         21,998
      Preferred stock                                        0              0
      Retained earnings                                  6,040          5,819
      Accumulated other comprehensive income              (709)          (154)
        Total shareholders' equity                      27,149         27,663
     Total liabilities and shareholders' equity        $43,951        $45,869
 
 
                   Mechanical Dynamics, Inc. and Subsidiaries
                  Condensed Consolidated Statements of Income
 
                                                         Three Months Ended
                                                              March 31,
     in thousands except share and per share data        2001           2000
                                                             (Unaudited)
     Revenue:
      Software licenses                                 $6,191         $6,036
      Software maintenance services                      3,013          2,253
      Professional services and other                    4,637          2,450
        Total revenue                                   13,841         10,739
     Cost of revenue:
      Software licenses                                    977          1,099
      Services                                           4,068          2,554
        Total cost of revenue                            5,045          3,653
     Gross profit                                        8,796          7,086
     Operating expenses:
      Sales and marketing                                4,935          4,203
      Research and development                           1,698          1,446
      General and administrative                         1,317          1,026
      Goodwill amortization                                178            114
        Total operating expenses                         8,128          6,789
     Operating income                                      668            297
     Other income, net                                     119             85
     Income before income taxes and minority interest      787            382
     Provision for income taxes                            235            114
     Net income before minority interest                   552            268
     Minority interest in net income of subsidiary          61             27
     Net income                                           $491           $241
     Basic net income per common share                   $0.08          $0.04
     Weighted average common shares                  6,088,056      6,286,725
     Diluted net income per common share                 $0.08          $0.04
     Weighted average common and
      common equivalent shares                       6,220,446      6,287,077
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X96911570
 
 SOURCE  Mechanical Dynamics, Inc.

RELATED LINKS

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