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Good morning. My name is Phyllis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 preliminary results conference call. [OPERATOR INSTRUCTIONS]. Mr. Thomas, you may begin your conference.

Thank you, Phyllis. Welcome, and thank you for joining the Moldflow Corporation conference call to discuss the preliminary results for the third quarter of our 2006 financial year. We will make a series of prepared remarks and then take questions. Before I begin with these remarks, I will ask Chris to remind all listeners about the risks and uncertainties surrounding forward-looking statements.

Thank you, Roland. Before we begin these remarks, I must remind all listeners that during the conference call today we will be making certain forward-looking statements, including statements related to our future business prospects and outlook. Pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, please note that any statements contained in this conference call that are not based on historical facts are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include those detailed from time to time in reports filed by Moldflow with the Securities and Exchange Commission, including the Company’s filing of Form 10-K for the year ended June 30, 2005 and our subsequent filings with the SEC.

Our comments today will summarize the preliminary financial results of our third fiscal quarter ended March 31, 2006. For more complete details of the preliminary financial results, please refer to the press release made last evening, which is available on the investor section of our website at www.moldflow.com and also includes a description of specific factors.

With that, I will turn this back over to Roland.

Thank you, Chris. Firstly, I realize that the timing of this call is not optimal, given the Passover and Easter holidays. However, I felt it was important to hold a conference call as close to the time of our press release as possible.

I’m here today to discuss the preliminary results for our third quarter of fiscal 2006. For the third quarter, we expect to report revenue of between $16.2 and $16.4 million, and this equates to the $17.8 million which was the low end of our guidance estimates we gave on February 2. We are anticipating that earnings will be at the-- at or below our stated guidance. Based on these results, the guidance we gave to you on February 2 regarding the results for the full 2006 year no longer represent the view of the Company.

At the end of last quarter, we expected that our year-over-year revenue growth would accelerate from the rates seen in our second quarter. That was not the case, as the third quarter revenue growth was similar to the rates we saw over our second quarter. During the third quarter, we experienced continued softness in the North American market. Further, we saw a trend similar to those we experienced in the third quarter of 2005 in our European markets.

As we have reported to you in the past, we have had difficulty forecasting the Manufacturing Solutions business cycle; and, although we have made strides in penetrating some new markets with certain of our MMS products, this business unit has not consistently met the revenue and profitability milestones we’ve set for it. Given these facts and our expected Q3 financial results, we have taken an aggressive look at our Manufacturing Solutions product and the geographic penetration strategy, with the goal of accelerating our effort to increase profitability levels as we look ahead to fiscal 2007.

To that end, we are announcing a significant worldwide restructuring of this business unit. The Company will take a related charge associated with this plan in the fourth quarter, which we are still in the process of quantifying and will discuss further on our standard Q3 earnings call scheduled for May 4, 2006.

When we acquired American MSI, we saw a strong core business with an opportunity to develop it globally. The strength of the AMSI business has been borne out in the growth of the Altanium product line and represents a strong foundation for our MMS Manufacturing Solutions business. This restructure will allow us to refocus the product development, manufacturing and sales effort of this business unit. Specifically, we’re going to focus these resources on the products that more closely align with our overall business strategy and our areas where Moldflow offers a distinct advantage and proven excellence. Although difficult in the short term, I’m committed to drive both bottom line growth, even if it comes at the expense of revenue growth. The restructure of the business unit we announced today will deliver high value solutions to our customers and increased value to our shareholders.

Today we also announced the resignation of Tim Triplett, the current Executive Vice President and General Manager of the Manufacturing Solutions business. Tim is leaving us to pursue personal interests and will be transitioning out of the business over the remainder of our fiscal 2006 year. Tim has been a valuable part of the Moldflow team since our acquisition of American MSI back in January of 2004 and was instrumental in the integration of the AMSI business into the Moldflow family. I’ll be working with the Manufacturing Solutions management team to manage this business unit through the restructuring phase.

So, in summary, as we have stated before, a key driver of our long-term strategy is to leverage the market trend towards optimization in the plastics-focused manufacturing market. We believe that our core strength lies in providing robust products that allow customers to manufacture less expensive, more reliable plastic parts. This restructuring action will allow us to focus on broadening the reach of manufacturing products that meet these goals and have clear competitive differentiating factors that set them apart and incorporate Moldflow’s deep domain knowledge and experience.

With that, I’ll be quite happy to take some questions.

[OPERATOR INSTRUCTIONS]. Your first question comes from the line of Jim Bradshaw with Bayers Capital Management.

Hi, Roland and Chris. How are you? I was wondering if you could give a little detail as to what kind of caused the weaker revenue than expected. What’s been behind that mostly?

Well, the two things that we saw-- I guess, firstly, if we look regionally, broadly speaking, the Asian region was quite reasonable, especially if you’re looking at the Korea, Taiwan, China region. But, we saw weakness in European operations across the board and continued softness in the North American market, which we’d experienced for the first time in some time last quarter and felt at that time that it was an end-of-year effect that we hadn’t anticipated. But, it’s continued on into the second quarter here.

But, I think the biggest impact was that our European market continues to find times when it struggles. This happened similarly last Q3. I guess it might be [harsh] missing the revenue number within a quarter where we’ve taken a cautious approach must contain some problems of execution, and we have to accept that. So, we already have and will continue to address these. I think more broadly, our FY’06 plan had a number of elements which, while not being the mainstay of the plan, were designed to offset these possible [inaudible] in the plan, such as what happens in Europe in Q3. On some of these, we didn’t execute or were slow to execute, so when something happened, the coverage wasn’t there. So, in some respects, we can look to the sluggishness in Europe and understand that that had an impact on the business. On the other hand, we probably knocked out as much as we could have to put in some offsetting factors.

Okay. So, is the manufacturing lines-- are those the main part of it? You said it was across the board in Europe. But, is it kind of driven mostly by manufacturing? Is that hence the restructure?

Well, no. We saw an effect in both lines in Q3. I think the focus on manufacturing right now is because we set up-- As you might expect, there’s a series-- When you’re going into an investment strategy, which we have been in the Manufacturing Solutions unit, where we have been investing in that business over a reasonable period, you set up a number of milestones that the business needs to meet to make sure that it’s going to advance properly according to that investment. We had missed a number of those milestones over a successive number of quarters. And, whilst we didn’t miss all milestones and we actually had some positive results in the unit in Q2, there was some important milestones [inaudible] that have missed. So, I’d more look at it as an accumulation over a series of quarters as opposed to a purely Q3 effect.

Okay. Do you have any details yet on the restructuring? Like, will it be done in ’06 - maybe the cost and how many employees-- or how many jobs might be affected and that kind of thing?

It’s intended to be done primarily over our Q4 in ’06. We haven’t announced the actual implications. But, we intend-- When we plan these things, we expect to be able to deliver run rate savings that are at or in excess of the expense of the restructuring. That’s a target that we work with. It’s difficult to quantify at this point while we’re compiling some of that data, but the order of magnitude of dollars is not dissimilar to Q2, although in terms of people, it’s broader than that.

Okay. Will Manufacturing end up focusing on any less geographic regions, or will they be selling a product line or anything like that?

I think that it’s as much a matter of how we roll out our sort of matrix of regions and products, expansion. It’s not that there’s a particular product which will not exist or anything like that. Really, it’s more a matter of saying that at the core of this business there is a strong business based around our Altanium product line, the ones we acquired and have subsequently grown throughout the world, which is the Altanium product from AMSI. And, then, in addition to that, we have layered on top of that a number of real-time performance management products and tried to take all products out to all parts of the market at the same time. And, really, it’s a matter of focusing some of those products in particular areas where they’ve already got traction and putting more emphasis on the Altanium product as a global product which already has traction in some of the global markets.

Okay. So, you’re happy with the product line you have; just going to refocus a little?

It’s a matter of trying to push on too many fronts. By doing that-- i.e., you end up over investing. We did that on the basis of our pipeline analysis, but I think the reality is that the conversion rate from pipeline hasn’t been at the level or the consistency that we would like to see to continue to support that kind of strategy. So, I think it’s important to reflect that reality and continue to push hard in those areas where you’ve already got traction and be more opportunistic in areas where you haven’t. It doesn’t preclude re-introducing them into different areas, but it does mean that you’re going to focus the efforts in some geographies in particular areas. For example, if you take the Chinese market-- The Chinese market, which is an evolving plastics market, and it’s growing very well and it’s moving up into the higher end manufacturing over time away from the origins that it had a number of years ago. Well, the first phase of that-- or the first interest in our product line in the Chinese market would be the Altanium hot runner process control because they introduced molds based on hot runner process control as a matter of course when you’re getting into higher end moldings. It’s a stage behind that when you introduce the need for real-time performance management systems. So, if you try and push on both product lines at the same time, you’re going to get potentially success with one and spend a lot of money on the other. It doesn’t mean you’re going to remove the product line from the face of the Earth. But, from that corner of it, you’re going to place all your-- or more of your bets on the product which is more readily being adopted by that market.

Okay. I see. And, just lastly, I know that you said that there’s no-- you don’t have a dollar figure yet, and you’re still working through it. But, do you think it will be anywhere along the lines of--? I think the one in ’02, the restructuring, was $1.3 millionish, and ’05 was $1.4. Do you think it’s somewhere along those lines, or are you thinking less?

You know, the numbers aren’t there. But, it’s order of magnitude somewhere around there. But, we really can’t quantify it much more than that.

Sure. Okay. I appreciate your time, Roland, and good luck with it.

[OPERATOR INSTRUCTIONS].

Okay. There being no further questions at this time, I’d like to thank you all for your joining me today, and I will speak with you again in May to give the full results of our third quarter. Thank you, and I’ll speak to you then.

This concludes today’s conference. You may now disconnect.