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MSC.Software Corporation reported results for the second quarter ended June 30, 2007. Total revenue for the second quarter was $60.7 million compared to $67.9 million for the second quarter last year. This represents sequential growth of 5% over total revenue in the first quarter of 2007. Software revenue for the second quarter totaled $23.0 million compared to $31.4 million for the second quarter last year. For the second quarter ended June 30, 2007, maintenance revenue totaled $31.9 million and services revenue totaled $5.9 million, compared to $29.2 million of maintenance revenue and $7.3 million of services revenue for the second quarter last year. Total revenue for the six months ended June 30, 2007 was $118.4 million compared to $135.3 million for the six month period last year. Software revenue for the six months totaled $46.0 million compared to $60.7 million for the six month period last year. For the six months ended June 30, 2007 maintenance revenue totaled $60.6 million and services revenue totaled $11.8 million, compared to $56.8 million of maintenance revenue and $17.9 million of services revenue for the six month period last year. "We are pleased that the cost reduction program and operational improvement initiatives we implemented over the past several quarters have resulted in a decrease in our operating expenses in the second quarter," said Bill Weyand, CEO and Chairman of MSC.Software. "These improvements and efficiencies in infrastructure have resulted in SG&A decreasing by about $6 million sequentially from the first quarter." "However, our revenue results continue to be impacted by our product evolution from engineering tools to enterprise solution. Our experience to date shows that selling enterprise solutions results in lengthening our sales cycle and leads to delays in the licensing of our products," continued Mr. Weyand. "We are seeing positive signs with our new Enterprise Simulation products and had a number of key wins in the quarter with customers including Northrop Grumman and TRW in the US, Mitsubishi Motors and Denso in Asia Pacific, and Alenia, Audi and Fincantieri in Europe. With the major wins at Mitsubishi Motors and Audi we now have six of the top automotive OEM's implementing our MD solutions." REVENUE BY GEOGRAPHY Total revenue in the Americas for the three and six months ended June 30, 2007 was $17.2 million and $35.7 million respectively, compared to $18.4 million and $41.0 million for the same periods last year. Total revenue in EMEA for the three and six months ended June 30, 2007 was $24.8 million and $44.4 million, respectively, compared to $28.5 million and $51.7 million for the same periods last year. Changes in the Euro dollar increased EMEA revenue during the three and six months of 2007 by $1.7 million and $3.3 million, respectively. In the Asia Pacific region, revenue for the three and six months of 2007 totaled $18.8 million and $38.3 million respectively, compared to $21.0 million and $42.6 million for the same periods in 2006. Changes in the Japanese Yen decreased Asia Pacific revenue during the three and six months of 2007 by $1.0 million and $1.5 million, respectively. The decreases in total revenue in all world geographies generally reflect decreases in software revenue from the impacts of the transition to selling enterprise solutions to our major customers in certain key industries including automotive, aerospace and manufacturing industries, partially offset by growth in maintenance revenue. RESULTS OF OPERATIONS AND EPS Total operating expenses for the three and six months ended June 30, 2007 were $45.9 million and $105.3 million, respectively, compared to $50.4 million and $93.6 million for the same periods last year. Operating income for the three months ended June 30, 2007 was $3.8 million and for the six month period was a loss of $9.6 million, compared to operating income of $2.3 million and $7.9 million for the same periods in 2006. The operating loss for the six months ended June 30, 2007 included restructuring and impairment charges totaling $7.8 million. For the three months ended June 30, 2007, income from continuing operations totaled $1.5 million or $0.03 per diluted share, compared to income from continuing operations of $0.8 million or $0.02 per diluted share for the second quarter last year. For the six months ended June 30, 2007, loss from continuing operations totaled $4.9 million or ($0.11) per diluted share, compared to income from continuing operations of $3.9 million or $0.10 per diluted share for the six month period last year. GUIDANCE At this time the Company will not issue guidance. The Company will evaluate its decision to provide guidance in the future, as it continues to move through this transition period and visibility improves.