Q2 2003 MatrixOne Inc. Earnings Conference Call - Final - Part 1.

(From Fair Disclosure Wire)

OPERATOR: Good evening, ladies and gentlemen, and welcome to the MatrixOne second quarter earnings release conference call.

At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. During the Q&A portion of today's call, we ask participants to limit themselves to one question and one follow-up question. If anyone should require assistance during the call, please press zero, then star on your touchtone phone.

As a reminder, today's call is being recorded.

I would now like to introduce Brian Norris, Director of Investor Relations for MatrixOne. Please go ahead. BRIAN NORRIS, DIRECTOR OF INVESTOR RELATIONS, MATRIXONE: Good evening, everyone, and thank you for joining us today.

With me on the call this evening are Mark O'Connell, the company's President and Chief Executive Officer, and Mo Castonguay, the company's Senior Vice President and Chief Financial Officer.

Earlier today, MatrixOne issued a press release which outlined the company's second quarter results. In a moment I will turn the call over to Mo who will review these results and make forward-looking comments on Q3 of FY 2003, and then Mark who will share his thoughts on the business.

I will now present the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. Forward-looking statements made during this call are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. We caution you not to place undue reliance upon any such forward-looking statements which speak only as of the date made. Such statements may relate, among other, to our plans, objectives, and expected financial operating results, and any comments we may make regarding analysts' expectations for our future results. Forward-looking statements will also include, without limitation, any statement relating to future events, conditions or circumstances, and using words, such as: will, believe, anticipate, expect, could, may, estimate, project, plan, predict or intend.

The risks and uncertainties that may affect forward-looking statements include, among others, we may not achieve or maintain profitability; weak worldwide economic conditions may result in decreased revenues increased customer credit risk and higher net losses; our sales cycle is lengthy and variable; the market may accept our products; we may be unable to develop new products and services that keep pace with technology; we may be unable to develop and maintain successful relationships with system integrators and complimentary technology vendors; our international operations are subject to additional risks; and increased competition may have an adverse effect on pricing, revenue, gross margins, and our customer base.

For a more detailed discussion of the risks and uncertainties of our business, please refer to our periodic reports filed with the Securities and Exchange Commission, including our annual report on form 10-K for the fiscal year ended June 29, 2002, and our quarterly report on form 10-Q for the fiscal year ended -- for the fiscal quarter ended September 28, 2002.

A replay of today's call will be available by dialing 1-800-475-6701, and using pass code 670975. International callers may access the replay by dialing 320-365-3844, and using the same pass code. A web cast replay will also be available on our website, which is www.matrixone.com.

At this time, I'd like to turn the call over to Mo. MAURICE CASTONGUAY, CHIEF FINANCIAL OFFICER, SENIOR VICE PRESIDENT OF FINANCE AND ADMINISTRATION AND TREASURER, MATRIXONE: Thank you, Brian, and good evening, everyone.

Overall, our revenues were in line with analyst expectations, and our pro forma loss per share was one cent better than analyst consensus estimate.

Now, starting with the top line, total revenues for our second quarter were 28 million, in line with the guidance we provided on our last conference call on October 23rd. Software license revenues for the…