Last week had a slew of earnings news, some of which was good and some, not so great. We learned a bit more about how Cimatron’s revenue stacks up, and heard about SGI’s plans for reinvention (again). Read on …

Cimatron’s growth driven by GibbsCAM

Cimatron announced that second quarter 2012 revenue was $10.6 million, up 6% as reported and up 11% in constant currencies. CEO Danny Haran, said that he was “pleased with the strong second quarter, the strong growth of 16% (year/year) in constant currencies in new licenses and the sustained growth in maintenance. We saw solid growth for both product lines and in our geographies. We hope to maintain momentum despite high levels of uncertainty in the global economy.”

CFO Elon Erez gave a revenue breakdown: license revenue was $4.8 million, up 11% y/y; maintenance was $5.1 million, up 4%, and services revenue was $750,000, down 1%. By geography, revenue from Europe was $4.8 million, down 3%; from North America, $3.6 million, up 17%; from Asia, $1.7 million,up 13%; and from the rest of the world, $500,000, up slightly. [Note that Cimatron gives percentages rather than dollar amounts, so this could be slightly off. — Ed.] Mr. Haran said that he sees a discrepancy between Cimatron’s performance and what he’s reading about the global economy — he’s concerned about what might happen the rest of the year, but assured investors that the company hasn’t seen a slowdown yet.

Cimatron doesn’t typically give product information, but a questioner on this earnings call was able to elicit the fact that revenue breaks down 30% GibbsCAM/70% CimatronE for the first six months of the year. GibbsCAM is “growing very nicely”, “a little bit faster than CimatronE”. Mr. Erez said that the brand is growing both in the US and in Europe.

SGI works on getting its house in order

SGI’s fiscal year ended in June, and it ended badly. Fourth quarter revenue declined by 8% to $180 million, leading to a $16 million loss from operations. Both products and services fell in FQ4, with product revenue down 6% year/year and down 10% sequentially to $135 million. Services was down nearly 14% y/y to just under $45m.

CEO Jorge Titinger told analysts that “markets for our products are large and growing, our reputation as a leading provider of advanced solutions is solid, and our customers continue to turn to us to help solve our most complex technical challenges”. Even so, SGI must improve its financial discipline and carefully select the opportunities it opts to pursue. Mr. Titinger laid out a three-step plan that is “focused on aligning our expertise and resources with attractive target markets where we can truly differentiate our offerings, working with key application partners to deliver more complete solutions, and improving our operational performance.”

CFO Bob Nikl said that SGI’s backlog of low-margin deals (done to increase sales in previous quarters) that are weighing down profitability. These deals should be out of the pipeline in early fiscal 2013, so the second half of the fiscal year should see a more profitable mix of business.

Revenue for the full year was $753 million, up nearly 20%, with half of the increase coming from the company’s acquisition of  SGI Japan, a former partner that the company acquired in March 2011.

Mr. Nikl gave guidance for the September quarter of revenue between $180 million and $195 million and a net loss of $0.42 to $0.34 per share.

Investors probably didn’t like how Q4 turned out but are happy with the direction SGI is taking to get its financial house in order and build profitable backlog for fiscal 2013. The share price was up over 25% after the announcement.

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