Paris : LSS

July 28, 2011 13:34 ET

CORRECTION: Lectra : First-half 2011

PARIS--(Marketwire - Jul 28, 2011) -

This is a correction of the announcement from 17:50 28.07.2011 CEST. Reason for the correction: erreur de date sous le tableau Q2 2011 au lieu de Q2 2010

First-Half 2011: Sharp Increase in Orders and Earnings

-- Orders: EUR43.1 million (+24%)(*)(**)

-- Revenues: EUR102.1 million (+13%)(*)

-- Income from operations: EUR12.9 million (+71%)(*)

-- Net income: EUR8.8 million (+102%)

-- Free cash flow: EUR8.4 million

-- Net cash positive again: EUR2.8 million

(*) like-for-like

(*) new software licenses and CAD/CAM equipment

In millions of euros        April 1 - June 30(3)      January 1 - June 30
                            --------------------       -----------------
                              2011      2010             2011     2010
                            -------- -----------       -------- --------

Revenues                        52,4        48,9          102,1     91,8

    Change like-for-like         +12%                       +13%

Income from operations           7,4         5,4           12,9      8,3

    Change like-for-like         +68%                       +71%

Operating margin (in % of       14,2%       11,0%           12,6%    9,1%

Net income                       5,1         2,7             8,8     4,4

Free cash flow                   5,2        13,8             8,4    18,8

Shareholders' equity(2)                                     47,9    42,0

Net cash(2)                                                  2,8    (2,4)

(1) Like-for-like: 2011 figures restated at 2010 exchange rates

(2) At June 30, 2011 and December 31, 2010

(3) Isolated data for Q2 2011 and Q2 2010 have not been reviewed by the Statutory Auditors

Paris, July 28, 2011. Today, Lectra's Board of Directors, chaired by André Harari, reviewed the consolidated financial statements for the first half of 2011, after a limited review by the Statutory Auditors.

(Unless stated otherwise, detailed comparisons between 2011 and 2010 are like- for-like.)

Q2 2011:

Continuation of the Strong Sales Dynamics

At a total of EUR21.2 million, orders for new software licenses and CAD/CAM equipment were up 24% compared to Q2 2010.

Sales of spare parts and consumables, up 13% at EUR11 million, registered new, strong gains, resulting from the combined effect of the increasing number of installed CAD/CAM systems and the continuing recovery in customers' production volumes.

Further Increase in Operating Margin

Revenues totaled EUR52.4 million, up 12% relative to Q2 2010-up 7% at actual exchange rates. Revenues from new systems sales (EUR25.5 million) were up 23%. Recurring revenues (EUR26.8 million) rose by 3%.

Income from operations amounted to EUR7.4 million, up EUR3.6 million (+68%) and the operating margin (14.2%) increased by 5.4 percentage points. At actual exchange rates, income from operations increased by EUR2.1 million (+39%), and the operating margin by 3.2 percentage points.

Net income was EUR5.1 million, an increase of EUR2.4 million (+88%), at actual exchange rates, compared to Q2 2010.

Free cash flow before non-recurring items was EUR5.2 million.

Lectra Obtains the Recognition in Spain of the October 2009 Award Rendered by the International Arbitral Tribunal Against Induyco

In a decision of exequatur issued on June 27, 2011, the Madrid Court of First Instance recognized the arbitral award rendered against Induyco in October 2009 by an International Arbitral Tribunal seated in London, which had awarded Lectra EUR25.9 million (see June 30, 2011 press release).

Confirming the validity and enforceability of the award, the decision that the Madrid Court of First Instance has just rendered represents a major milestone in the settlement of this dispute. Induyco having appealed this judgment, this decision does not modify the recognition of the award in the company's financial statements: the company has only recorded the EUR15.1 million received in 2010. The balance (EUR10.8 million) still due by Induyco will only be recorded upon its receipt.

First-Half 2011

Strong Growth in Orders

First-half 2011 orders and earnings confirm that the sales dynamics are ongoing and that the operating and financial ratios-which had already significantly strengthened in 2010-are continuing to improve.

Orders for new software licenses and CAD/CAM equipment (EUR43.1 million) are up 24% relative to first-half 2010.

The growth in automotive sector orders was 85% and 10% in the fashion sector. These two markets respectively represented 36% and 50% of total orders. Furniture sector orders were down 7%, and the other industries 16%.

Orders booked in the Americas jumped 28%, in the Asia-Pacific region and Europe they rose 27%; they dropped 12% overall in the rest of the world (Northern Africa, South Africa, Turkey, the Middle East, etc.). Orders in emerging countries (51% of total orders) advanced 38%, while they were up 12% in the developed countries (49% of total orders).

These variations cannot, of course, allow for an extrapolation of trends for the coming quarters.

First-half 2011 revenues totaled EUR102.1million, up 13% relative to Q1 2010, like-for-like (up 11% at actual exchange rates). Revenues from new systems sales (EUR49 million) increased 26% and represented 48% of total revenues (compared to 44% in first-half 2010). This 4-percentage point increase in their relative share of total revenues reflects the continuing return to dynamic sales activity, begun in 2010. Recurring revenues (EUR53.1 million) increased EUR1.7 million (+3%).

Given that orders for new software licenses and CAD/CAM equipment for first-half 2011 are equivalent to revenues, the order backlog (EUR17.6 million) is therefore unchanged, like-for-like. However, it was down by EUR0.9 million at actual exchange rates. It comprised EUR16.2 million for shipment in the second half of 2011, and EUR1.4 million in 2012. Further Strengthening of Operating Ratios and Balance Sheet-Net Income Doubles

Like-for-like, gross profit margins for each product line have increased, again demonstrating their strength in the face of heavy pressure from competitors, which has been exacerbated by the crisis.

The overall gross profit margin worked out to 70.4%. Like-for-like, it came to 70.8%, down 1.2 percentage point relative to the first-half 2010 figure. This variation stems from changes in the product mix, with a rise in the share of revenues from CAD/CAM equipment and spare parts and consumables in total revenues, where margins are lower than for the other revenue components.

Income from operations was EUR12.9 million and the operating margin was 12.6%, an increase of EUR6 million (+71%) and 4.6 percentage points respectively. At actual exchange rates, the increase was EUR4.5 million (+54%) and 3.5 percentage points.

Net income was EUR8.8 million, the double of first-half 2010 figure at actual exchange rates.

Net earnings per share on basic capital (EUR0.31) increased by 94% and diluted capital (EUR0.30) by 88% at actual exchange rates.

Net Cash Positive Again

Free cash flow amounted to EUR9.3 million before non-recurring items. Assuming that the (French) research tax credit (EUR2.7 million) was received, free cash flow would amount to EUR12 million, exceeding net income by EUR3.2 million. First-half 2010 free cash flow (EUR19.3 million) included EUR6.2 million arising from early repayment of the 2009 research tax credit, this measure having been rescinded with effect from 2011.

At June 30, 2011, the net cash position is positive at EUR2.8 million, after payment of EUR5.2 million dividend paid in respect of fiscal 2010, versus net financial debt of EUR2.4 million at December 31, 2010, and EUR29.4 million at June 30, 2010. The improvement therefore represents EUR5.2 million for the first-half and EUR32.2 million for the last twelve-month period.

Business Trends and Outlook

The company discussed in detail its expectations regarding its activities and the outlook for the future in its Management Discussion of February 10, 2011, and in its 2010 Annual Report, both of which serve as a reference.

While the macroeconomic environment has confirmed its progressive improvement since the start of 2011, it has still not reverted to pre-crisis levels yet. Global economic conditions were marked by the consequences of the tragic disasters in Japan and the geopolitical crises in certain North African and Middle Eastern countries on the one hand, and by the rising concern over sovereign debt in the United States and certain European countries.

The recovery remains fragile, therefore, risks and uncertainties have increased, and a further deterioration in the economic and monetary situation remains possible, demanding continuing caution and vigilance.

Sales activity and earnings for first-half 2011 are generally in line with company expectations, confirming the strengthening of its operating ratios and its balance sheet. The order backlog is still strong. However, the situation remains disparate across the different regions and market sectors, and the combined activity of all Lectra customers has yet to recover its 2007 level.

On February 10, 2011, the company adopted as its central scenario for 2011, assuming that the economic recovery continued at its pace of the preceding months, revenues of around EUR207 million, and income from operations before non- recurring items of approximately EUR28.5 million, thus generating an operating margin before non-recurring items of close to 14% and a net income of close to EUR18 million.

These figures were based on an average parity of $1.35/EUR1.

Assuming that the average parity for second-half 2011 is $1.45 / EUR1, the currency effect alone would, for the full fiscal year, mechanically reduce revenues by EUR 4 million, income from operations by EUR2.3 million, and the operating margin by 1 percentage point, bringing these respectively to around EUR203 million, EUR26 million, and 13%. Like-for-like increases relative to 2010, of 10%, 30% and 2 percentage points, respectively, would remain unchanged. Net income would be reduced by EUR1.5 million and close to EUR16.5 million (+ 16% at actual exchange rates relative to the 2010 figure restated for non- recurring items). Finally, free cash flow would work out to around EUR14 million.

As of the date of publication, the February 10 central scenario, as updated by the sole impact of exchange rates fluctuations, remains the most likely.

Under this updated hypothesis, therefore, revenues would still lag behind the 2007 figure by EUR14 million (-6%), but income from operations, on the other hand, would be multiplied by 2.3, testifying to the improvement in the company's key operating ratios in the midst of the crisis.

Bolstered by its results, the company is confident in the strength of its business model and its growth prospects for the medium term.

Q3 2011 earnings will be published on October 27, 2011.

The Management Discussion and Analysis of Financial Condition and Results of Operations and the financial statements for the first-half 2011 are available on lectra.com.

With 1,350 employees worldwide, Lectra is the world leader in software, CAD/CAM equipment and related services specially created for large-scale users of textiles, leathers, and industrial fabrics. Lectra serves a broad array of major global markets including the fashion (apparel, accessories, and footwear), automotive (car seats and interiors, airbags), and furniture industries, as well as a wide variety of other sectors, such as the aeronautical and marine industries, wind energy, etc.

Lectra (code ISIN FR0000065484) is listed on NYSE Euronext (compartment C).


Lectra - World Headquarters & siège social : 16-18, rue Chalgrin · 75016 Paris · France

Tél. +33 (0)1 53 64 42 00 - Fax +33 (0)1 53 64 43 00 - www.lectra.com

Société anonyme au capital de EUR 27 640 648 · RCS Paris B 300 702 305

Lectra: First-half 2011: http://hugin.info/143494/R/1534622/467761.pdf

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Source: LECTRA via Thomson Reuters ONE


Contact Information

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