SANTA ANA, Calif. -- MSC.Software Corp., the leading global provider of simulation software, services and systems used in Virtual Product Development environments, today announced financial results for the fourth quarter and fiscal year ended December 31, 2002. Fourth quarter highlights include: -- Revenues of $101.6 million, an increase of 27% over the fourth quarter last year; -- Net income of $2.3 million or $0.08 per share, slightly above Company guidance for the quarter. Fiscal year 2002 highlights include: -- Revenues of $344.2 million, up 46% over last year; -- Operating income of $6.6 million, excluding restructuring and other impairment charges; -- Key balance sheet items include $35 million in cash and investments, $67 million in deferred revenue and $242 million in shareholders' equity. "Our revenue growth in the fourth quarter was supported by the fact that we were able to close many of the transactions that had been pushed from the third quarter," said Frank Perna, Jr., chairman and CEO, MSC.Software Corp. "Even without the impact of the third quarter transactions, our systems business was particularly strong, as we saw expanded penetration into our core software and other manufacturing accounts. "Virtual Product Development and the increasing use of simulation technologies are helping our customers save time and money with their Product Lifecycle Management implementations. Customers are finding significant value in our integrated software, services and systems approach to product delivery. Significant business wins at BMW and a major first tier automotive supplier in the Americas support this fact," continued Mr. Perna. "We solidified our position in the Desktop and CAD-embedded markets with a number of key product releases including Generative Nonlinear for CATIA V5, and new releases of MSC.visualNastran 4D and MSC.Dynamic Designer. The 2003 release of MSC.Patran began shipping and features numerous enhancements to interoperability among MSC products. "Although current economic conditions continue to be challenging, the right sizing moves that were executed in FY 2002 will allow us to grow profitably now, and we are well positioned for accelerated revenue growth and improving margins when the economy recovers," concluded Mr. Perna. For the fourth quarter ended December 31, 2002, MSC.Software reported revenue of $101.6 million, an increase of 27% over reported revenue of $80.1 million for the fourth quarter last year. The reported net income for the fourth quarter was $2.3 million compared with $6.3 million in the fourth quarter last year. Earnings per diluted share were $0.08 compared with $0.21 per diluted share in the fourth quarter last year. For the fiscal year ended December 31, 2002, MSC.Software reported revenue of $344.2 million compared to $236.1 million of reported revenue in fiscal 2001, an increase of 46%. The pro forma net loss, excluding restructuring and other non cash impairment charges, write off of acquired R&D and cumulative change in accounting principle, for the fiscal year 2002 was ($1.3) million or ($0.05) per diluted share. The reported net loss, including restructuring and other impairment charges, write-off of acquired R&D and cumulative change in accounting principle, was ($51.3) million or ($1.75) per diluted share in fiscal 2002, compared with net income of $10.3 million or $0.47 per diluted share in fiscal 2001. Americas In the Americas, revenue increased 18% to $49.8 million in the fourth quarter versus the fourth quarter last year. Revenue increased 55% to $180.5 million for the fiscal year ended December 31, 2002. In the Americas, 75 transactions over $100,000 were signed in the fourth quarter, and the total number of new accounts increased by 240 new names. Key software business completed in the quarter included United Technologies, Delphi, Kodak and Guidant. Key services engagements were completed or are ongoing with customers including Cooper Tire and Ford. Key enterprise systems were delivered to Harley Davidson, Orbitz and Pegasus. Europe In spite of very tough economic markets in Europe, MSC.Software's European revenue increased by 8% to $23.5 million in the fourth quarter versus the fourth quarter last year, and increased 24% to $78.9 million in fiscal 2002. Total number of new accounts increased by 57 and the number of transactions over $100,000 totaled 14 in the fourth quarter. Key services engagements were ongoing with BMW, Renault Formula 1 and Jaguar. Major software deals were signed with Eurocopter Germany, British Aerospace and MTU AeroEngines. A total solution including software, services and systems was sold to Ernst- Mach-Institute, a subsidiary of Fraunhofer Gesellschaft, which will use the computing environment for research in the field of high-speed dynamics, including stochastic simulation techniques. Asia-Pacific The Asia-Pacific region reported significant revenue growth for MSC.Software, with revenue increasing 75% to $28.3 million in the fourth quarter, and increasing 50% to $84.8 million in fiscal 2002. The total number of new customer accounts increased by 52 new account names. In total 32 transactions over $100,000 were signed in the region in the fourth quarter. Key software contracts were signed with Mitsubishi Motor in Japan and Kwanjin in Korea. Service and system engagements moved forward with Samsung Heavy Industries, Japan Automotive Research and James Hardie Research in Australia. Outlook Based on current visibility, the Company expects first quarter revenue and earnings to be within current consensus estimates. In addition the Company is comfortable with the consensus estimates for revenue and earnings for FY 2003.