Innoveda Divests of System-Level Design Software Business -- Reports First Quarter 2002 Results

MARLBORO, Mass.--(BUSINESS WIRE)--April 23, 2002--Innoveda, Inc. (Nasdaq: INOV - news), a leading electronic design automation company, announced today the divestiture of its system-level design (SLD) software unit to Divestiture Growth Capital (DivestCap).

The SLD business unit will begin operations immediately as a separate company, under the name Summit Design, Inc., headquartered in Westlinn, Oregon. This new company will be managed by Larry Gerhard, chief executive officer, and Guy Moshe, former vice president and general manager of the SLD business unit at Innoveda. Financial terms were not disclosed.

"System-level design is an emerging market with new methodologies that require intense focus and commitment of resources, particularly in sales and engineering," said William J. Herman, chairman and chief executive officer, Innoveda. "It was in the best interest of our respective customers to complete this transaction and allow the two companies to concentrate on their core strengths. Innoveda is focused on PCB systems design with its proven, industry-leading solutions and the emerging automotive solutions segment."

"We are excited about the opportunities ahead of us and we are moving forward immediately to execute against our business plan," said Larry Gerhard, chief executive officer, Summit Design. "Because the products, infrastructure and resources already are in place, we can provide a seamless transition for customers and begin engaging new prospects."

With more than 30 years of senior management experience, Gerhard has been president, CEO and director of major electronics corporations including Enterprise Communications & Computing, Inc., Ventura Software and Decision Data, Inc. as well as vice president of engineering at Raytheon Data Systems.

Prior to joining Innoveda, Guy Moshe was a founder and director of marketing and sales at Israeli-based SEE Technologies. He also held positions at Daisy, worked as a design engineer in computerized vehicles at Aniam Maracoht Ltd., and managed the computerized process of all the Kibbutzim in Drom Hasharon in Israel.

"Divestiture Growth Capital's investment will catalyze growth opportunities and further differentiate Summit as a leading player in its market," said Charles Hale, Partner, Divestiture Growth Capital. "This transaction will be beneficial to both Summit's and Innoveda's customers and employees. We are extremely excited about our investment."

Innoveda Reports First Quarter Results

Innoveda reported its financial results for the first quarter, ended March 30, 2002. For the first quarter 2002, revenue was $15.7 million with an operating loss, before amortization, of $2.2 million. The net loss for the quarter was $3.1 million, or $0.08 per share. The economic climate and the company's restructuring in August 2001 contributed to a decline in year-over-year results. For the same period last year, Innoveda reported revenue of $27.3 million, operating income, before amortization, of $1.8 million and a net loss of $2.1 million, or $0.05 per share.

About Innoveda

Innoveda, Inc. (Nasdaq "INOV") is a worldwide leader in electronic design automation (EDA) technology, software and services for businesses in the consumer electronics, computer, telecommunications, automotive and aerospace industries. The company's innovative solutions are intended to empower people for mission-critical areas of the design process. Headquartered in Marlboro, Mass., Innoveda has sales offices and research centers worldwide. Additional information can be found at: http://www.innoveda.com/

About Divestiture Growth Capital

DivestCap is a technology investment fund dedicated to buying, financing, and growing information technology divestitures. For the divestiture, DivestCap builds value by providing the active financial and operating expertise each investment needs to realize its potential. For the selling company, DivestCap creates shareholder value by structuring transactions quickly, fairly, and flexibly.

Forward-Looking Statements

This press release includes forward-looking statements that are subject to a number of risks and uncertainties. All statements, other than statements of historical facts, included in this press release including, without limitation, statements regarding Innoveda's financial projections for any period, strategy, future operations, financial position, prospects, plans, goals and objectives of management are forward-looking statements. When used in this press release, the words "will", "believe", "anticipate", "intend", "estimate", "expect", "project", "plan" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We cannot guarantee future results, levels of activity, performance or achievements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future transactions or strategic alliances. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including the availability of financial resources, management's efforts to reduce expenses in specific business areas or across the company, recent economic uncertainty, weakness in the business of our customers, Innoveda's ability to develop new products and market acceptance of those products, the effects of business combinations and dispositions and any related financial charges, Innoveda's ability to successfully integrate its business combinations, the cyclical nature of the electronics industry, the failure of Innoveda's quarterly results to meet market expectations, the intense competition Innoveda faces, and the other risks described in Innoveda's annual report on Form 10-K for the fiscal year ended December 29, 2001 as filed with the Securities and Exchange Commission on March 29, 2002, and the other public filings made by Innoveda with the SEC, which factors are incorporated herein by reference.

-0-

                                INNOVEDA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)


                                           First Quarter Ended
                                  March 30, 2002       March 31, 2001
                                  --------------       --------------
Revenue:
 Software                            $5,730                 $15,381
 Maintenance                          8,454                  10,352
 Services                             1,523                   1,525
                                    -------------          -----------
  Total revenue                      15,707                  27,258

Cost and expenses:
 Cost of software                     1,226                   1,759
 Cost of maintenance                  1,051                   1,025
 Cost of services                     1,329                   1,579
 Sales and marketing                  7,991                  11,288
 Research and development             4,920                   7,652
 General and administrative           1,359                   2,166
 Amortization of intangibles(1)       1,890                                      4,702
  Amortization  of  stock  compensation(1)    147                                          146
                                                                          ---------------              -----------
    Total  operating  expenses                      19,913                                    30,317

    Operating  loss                                          (4,206)                                  (3,059)

    Other  expense                                                (295)                                        (18)
                                                                          ---------------              -----------
Loss  before  income  tax  benefit                (4,501)                                (3,077)

Income  tax  benefit                                        (1,440)                                    (970)
                                                                          ----------------              ----------
Net  loss                                                          $(3,061)                                $(2,107)
                                                                          ================              ==========

Net  loss  per  share:
  Basic  and  diluted                                        $(0.08)                                  $(0.05)
                                                                          ================                =========

Weighted  average  shares  outstanding:
  Basic  and  diluted                                          40,035                                      39,036
                                                                          ================                =========
                                                                          ================                =========

(1)Operating  income  (loss)
    excluding  amortization                              $(2,169)                                  $1,789
                                                                          ================                  ========
                                                                          ================                  ========


                                                    INNOVEDA,  INC.
                                        CONSOLIDATED  BALANCE  SHEETS
                                                    (in  thousands)


                                                                March  30,  2002              December  29,  2001
                                                                --------------              -----------------

ASSETS

Current  assets:
  Cash  and  cash  equivalents                    $8,597                                    $7,704
  Accounts  receivable,  net                      16,087                                    21,876
  Prepaid  expenses  and  other                    2,347                                      3,744
  Deferred  income  taxes                              3,962                                      3,960
                                                              -----------------                    ------------
    Total  current  assets                            30,993                                    37,284

Equipment  and  furniture,  net                  4,264                                      4,850
Capitalized  software  costs,  net            2,415                                      2,342
Purchased  technology  and  other
  intangibles,  net                                      23,528                                    25,404
Goodwill  and  other                                      1,968                                      2,412
                                                              -------------------                  -----------
  Total  assets                                            $63,168                                  $72,292
                                                              ===================                  ===========
                                                              ===================                  ===========

LIABILITIES

Current  liabilities:
  Long-term  debt,  current  portion      $4,875                                      $4,000
  Capital  lease  obligations,  current
    portion                                                          158                                            270
  Accounts  payable                                      2,572                                        3,648
  Accrued  liabilities                              14,960                                      18,122
  Deferred  revenue                                    20,160                                      20,776
                                                              -----------------              ---------------
                                                                      42,725                                      46,816

Long-term  debt                                                    -                                        1,750
Other  long-term  liabilities                  1,338                                        1,322
Deferred  income  taxes                              9,299                                      10,013
                                                              ------------------            ---------------
                                                              ------------------            ---------------
  Total  liabilities                                  53,362                                      59,901

STOCKHOLDERS'  EQUITY
Common  stock                                                    406                                            403
Treasury  stock                                          (1,663)                                    (1,663)
Additional  paid-in  capital                117,663                                    117,440
Notes  due  from  stockholders                    (932)                                        (932)
Deferred  compensation                                (379)                                        (526)
Accumulated  deficit                            (104,711)                                (101,650)
Accumulated  other  comprehensive
  loss                                                                (578)                                        (681)
                                                                --------------------      ---------------
                                                                --------------------      ---------------
Total  stockholders'  equity                    9,806                                        12,391


Total  liabilities  and
  stockholders'  equity                          $63,168                                      $72,292
                                                                ==================          ===============

 


Contact:
           Innoveda
          Investor  Contact:  Kevin  O'Brien
          Vice  President
          Finance  and  Chief  Financial  Officer
          (508)  303-5253
                            OR
          Innoveda  Investor  Relations
          (508)  303-5507
                            OR
          Press  Contact:  Len  Harmon
          508-303-5346
          
  Email  Contact  



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