##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to   Commission file number:
    000-30027
  Moldflow Corporation
 (Exact name of registrant as
    specified in its charter)
  Delaware

04-3406763(State or other jurisdiction
    of

(I.R.S. Employerincorporation or
    organization)

Identification
    No.)   492 OLD CONNECTICUT PATH, SUITE 401 FRAMINGHAM, MA
    01701
 (Address of principal executive
    offices) (Zip Code)
  508-358-5848
 (Registrants telephone
    number, including area code)
  [None]
 (Former name, former address and
    former fiscal year, if changed since last report)
  þ o
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
    Outstanding atNovember 2,Class

2006Common Stock, $0.01 par value
    per share

11,318,805




---



##### 



MOLDFLOW
    CORPORATION
  FORM 10-Q
 For the Quarter Ended September 30, 2006
  TABLE OF
    CONTENTS
  
  Page NumberPART I.
    FINANCIAL INFORMATIONItem 1.


Unaudited Financial
    Statements:Condensed
    Consolidated Balance Sheet as of September 30, 2006 and
    June 30, 2006


2Condensed
    Consolidated Statement of Income for the three months ended
    September 30, 2006 and September 30, 2005


3Condensed
    Consolidated Statement of Cash Flows for the three months ended
    September 30, 2006 and September 30, 2005


4Notes to Unaudited
    Condensed Consolidated Financial Statements


5Item 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


17Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


29Item 4.


Controls and
    Procedures


29PART II.
    OTHER INFORMATIONItem 1.


Legal
    Proceedings


30Item 1A.


Risk
    Factors


30Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


30Item 3.


Defaults Upon
    Senior Securities


30Item 4.


Submission of
    Matters to Vote of Security Holders


30Item 5.


Other
    Information


30Item 6.


Exhibits


31Signatures


32EX-31.1 Section 302 CEO CertificationEX-31.2 Section 302 CFO CertificationEX-32.1 Section 906 CEO CertificationEX-32.2 Section 906 CFO Certification   1




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##### Table of Contents



PART I.
    FINANCIAL INFORMATION  Item 1.
    Unaudited
    Financial Statements  MOLDFLOW
    CORPORATION
 CONDENSED
    CONSOLIDATED BALANCE SHEET  September 30,


June 30,2006


2006(In thousands)(Unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
52,520


$
52,111Marketable securities


8,113



8,443Accounts receivable, net


10,853



12,774Inventories


1,814



1,739Prepaid expenses


6,588



6,535Other current assets


2,209



3,070Total current assets


82,097



84,672Fixed assets, net


3,098



3,129Acquired intangible assets, net


1,135



1,215Goodwill


18,652



18,654Other assets


2,426



2,523Total assets

$
107,408


$
110,193LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,377


$
2,049Accrued expenses


8,616



10,274Deferred revenue


9,748



11,741Total current liabilities


19,741



24,064Deferred revenue


1,600



1,325Other long-term liabilities


822



847Total liabilities


22,163



26,236Contingencies, commitments and
    guarantor arrangements (Note 12)Stockholders equity:Common stock


114



114Treasury stock, at cost


(3,966
)


(2,579
)Additional paid-in capital


76,165



75,335Retained earnings


7,979



6,296Accumulated other comprehensive
    income


4,953



4,791Total stockholders equity


85,245



83,957Total liabilities and
    stockholders equity

$
107,408


$
110,193    2




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##### Table of Contents



MOLDFLOW
    CORPORATION
 CONDENSED
    CONSOLIDATED STATEMENT OF INCOME  Three Months EndedSeptember 30,


September 30,2006


2005(In thousands, exceptper share data)(Unaudited)Revenue:Product

$
7,990


$
8,734Services


7,325



6,546Total revenue


15,315



15,280Costs and operating expenses:Cost of product revenue


2,015



2,570Cost of services revenue


1,296



1,613Research and development


2,115



2,481Selling and marketing


5,295



5,650General and administrative


3,814



3,584Amortization of acquired
    intangible assets


44



49Total costs and operating expenses


14,579



15,947Income (loss) from operations


736



(667
)Interest income, net


786



562Other income (loss), net


3



(19
)Income (loss) before income taxes


1,525



(124
)Benefit from income taxes


(158
)


(154
)Net income

$
1,683


$
30Net income per common share:Basic

$
0.15


$
Diluted

$
0.14


$
Shares used in computing net
    income per common share:Basic


11,164



11,003Diluted


11,613



11,821    3




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##### Table of Contents



MOLDFLOW
    CORPORATION
 CONDENSED
    CONSOLIDATED STATEMENT OF CASH FLOWS  Three Months EndedSeptember 30,


September 30,2006


2005(In thousands)(Unaudited)Cash flows from operating
    activities:Net income

$
1,683


$
30Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation of fixed assets


285



304Amortization of acquired
    intangible assets


80



85Amortization of other intangible
    assets


264



173Provisions for doubtful accounts


31



27Share-based compensation


398



570Excess tax benefits from
    shared-based compensation


(10
)


Other non-cash charges or expenses


(5
)


6Changes in operating assets and
    liabilities:Accounts receivable


1,814



3,248Inventories, prepaid expenses, and
    other current assets


655



(27
)Other assets


(51
)


(22
)Accounts payable


(673
)


(1,390
)Accrued expenses and other
    liabilities


(1,660
)


(762
)Deferred revenue


(1,579
)


(773
)Net cash provided by operating
    activities


1,232



1,469Cash flows from investing
    activities:Purchases of fixed assets


(259
)


(456
)Capitalization of software
    development costs


(52
)


(40
)Purchases of marketable securities


(5,413
)


(3,835
)Sales and maturities of marketable
    securities


5,743



4,650Net cash provided by investing
    activities


19



319Cash flows from financing
    activities:Proceeds from issuance of common
    stock


432



1,280Purchase of treasury stock


(1,387
)


Excess tax benefits from
    share-based compensation


10



Net cash (used in) provided by
    financing activities


(945
)


1,280Effect of exchange rate changes on
    cash and cash equivalents


103



139Net increase in cash and cash
    equivalents


409



3,207Cash and cash equivalents,
    beginning of period


52,111



48,910Cash and cash equivalents, end of
    period

$
52,520


$
52,117    4




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS
  1.
    Basis of
    Presentation and Nature of Business    Form 10-K.
  2.
    Stock
    Plans and Share-Based Compensation  Share-Based
    Compensation
      Three Months


Three MonthsEnded


EndedSeptember 30,


September 30,2006


2005(In thousands)Cost of product revenue

$
8


$
15Cost of services revenue


13



31Research and development


77



76Selling and marketing


90



134General and administrative


210



314Share-based compensation expense
    before tax


398



570Income tax benefit






(31
)Net share-based compensation
    expense

$
398


$
539  5




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Three Months


Three MonthsEnded


EndedSeptember 30,


September 30,2006


2005Dividend yield


0
%


0
%Expected volatility factor(1)


41.1
%


45.5
%Risk-free interest rate(2)


4.9
%


3.9%-4.1
%Expected term (in years)(3)


3.5-5.0



3.5     (1)
    
    Measured using a weighted average of historical daily price
    changes of the Companys stock over the most recent period
    that matches the expected term of the option.(2)
    
    The risk-free interest rate for periods equal to the expected
    term of the share option is based on the U.S. Treasury
    yield in effect at the time of grant.(3)
    
    The expected term is the number of years that the Company
    estimates, based primarily on historical experience, that the
    options will be outstanding prior to exercise. The Company has
    elected to use the simplified method for estimating the expected
    term for its stock options, which qualify as
    plain-vanilla options.  Stock
    Plans
     6




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Three Months EndedSeptember 30, 2006


September 30, 2005Weighted Average





Weighted AverageShares


Exercise Price


Shares


Exercise PriceOutstanding at beginning of period


2,086,551


$
10.85



2,487,267


$
10.22Granted


239,207



12.03



107,383



15.23Exercised


(88,482
)


4.88



(136,106
)


8.36Canceled


(210,690
)


13.23



(41,982
)


15.00Outstanding at end of period


2,026,586


$
10.98



2,416,562


$
10.47Options exercisable at end of
    period


1,517,885


$
10.33



1,861,055


$
9.90Weighted average fair value of
    options granted in the period





$
5.18






$
5.76     Options Outstanding


Options ExercisableWeightedAverage

Weighted





WeightedRemaining

Average





AverageContractual

Exercise





ExerciseRange of Exercise Prices

Shares


Life

Price


Shares


Price$0.36-$5.00


499,541


0.9 years

$
4.62



499,541


$
4.62$5.01-$10.00


347,608


2.2 years


9.11



346,608



9.11$10.01-$15.00


709,343


4.9 years


11.95



319,338



11.68$15.01-$20.00


390,294


2.7 years


16.65



272,598



17.15$20.01-$25.00


63,700


2.2 years


21.76



63,700



21.76$25.01-$30.00


16,100


2.3 years


26.24



16,100



26.242,026,586


2.9 years

$
10.98



1,517,885


$
10.33      7




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Three Months EndedSeptember 30, 2006


September 30, 2005Weighted





WeightedAverage





AverageNumber


Grant Date


Number


Grant Dateof Shares


Fair Value


of Shares


Fair ValueNonvested at beginning of period


81,744


$
15.39






$
Granted


126,069



12.05



69,000



15.35Vested


(19,699
)


15.35







Nonvested at end of period


188,114


$
13.16



69,000


$
15.35     3.
    Net
    Income Per Common Share    Three Months EndedSeptember 30,


September 30,2006


2005(In thousands, exceptper share data)Net income

$
1,683


$
30Weighted average shares used in
    computing net income per common share  basic


11,164



11,003Effect of dilutive securities:Stock options and unvested
    restricted stock


449



818Weighted average shares used in
    computing net income per common share  diluted


11,613



11,821Net income per common
    share  basic

$
0.15


$
Net income per common
    share  diluted

$
0.14


$
     4.
    Derivative
    Financial Instruments and Hedging Activities   8




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        5.
    Acquired
    Intangible Assets      September 30, 2006


June 30, 2006Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


Amount(In thousands)Acquired intangible assets:Customer base

$
991


$
(573
)

$
418


$
991


$
(539
)

$
452Developed technology


1,675



(1,051
)


624



1,675



(1,015
)


660Customer order backlog


40



(40
)






40



(40
)


Non-compete agreements


1,416



(1,323
)


93



1,416



(1,313
)


103Total

$
4,122


$
(2,987
)

$
1,135


$
4,122


$
(2,907
)

$
1,215  9




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year

Amortization Expense(In thousands)2007 (Remainder)

$
2352008


2982009


2462010


2232011


133Total future amortization expense

$
1,135     6.
    Inventories    September 30,


June 30,2006


2006(In thousands)Raw materials

$
1,558


$
1,395Finished goods


256



344Total

$
1,814


$
1,739   7.
    Software
    Development Costs      September 30,


June 30,2006


2006(In thousands)Gross carrying amount

$
2,876


$
2,824Less  accumulated
    amortization


(1,912
)


(1,726
)Net carrying amount

$
964


$
1,098  10




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    Comprehensive
    Income      Three Months EndedSeptember 30,


September 30,2006


2005(In thousands)Net income

$
1,683


$
30Other comprehensive income:Change in fair value of marketable
    securities, net of related tax effects


6



11Change in value of financial
    instruments designated as hedges, net of related tax effects


58



39Foreign currency translation
    adjustment


98



76Other comprehensive income


162



126Comprehensive income

$
1,845


$
156   9.
    Restructuring
    Plans  April
    2006 Plan
    Employee SeveranceCosts


Other Costs


Total(In thousands)Balance at June 30, 2006

$
113


$
59


$
172Cash payments Cash Payments


(113
)


(59
)


(172
)Balance at September 30, 2006

$



$



$
   October
    2005 Plan
   11




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  April
    2002 Plan
    Lease TerminationCosts(In thousands)Balance at June 30, 2006

$
340Cash payments


(27
)Foreign exchange impact


7Balance at September 30, 2006

$
320   10.
    Segment
    Information  Segment
    Information
       12




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Three Months EndedSeptember 30,


September 30,2006


2005(In thousands)Design Analysis Solutions
    divisionRevenue:Product

$
4,962


$
5,502Services


6,645



5,824Total revenue


11,607



11,326Cost of revenue:Cost of product revenue


357



366Cost of service revenue


1,027



1,010Total cost of revenue


1,384



1,376Gross profit


10,223



9,950Operating expenses:Research and development


1,742



1,947Selling and marketing


4,097



4,157General and administrative


3,655



3,377Amortization of acquired
    intangible assets






Total operating expenses


9,494



9,481Income from
    operations

$
729


$
469Manufacturing Solutions
    divisionRevenue:Product

$
3,028


$
3,232Services


680



722Total revenue


3,708



3,954Cost of revenue:Cost of product revenue


1,658



2,204Cost of service revenue


269



603Total cost of revenue


1,927



2,807Gross profit


1,781



1,147Operating expenses:Research and development


373



534Selling and marketing


1,198



1,493General and administrative


159



207Amortization of acquired
    intangible assets


44



49Total operating expenses


1,774



2,283Income (loss) from
    operations

$
7


$
(1,136
)Consolidated income (loss) from
    operations

$
736


$
(667
)  13




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Income
    Taxes              12.
    Contingencies,
    Commitments and Guarantor Arrangements   14




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Three Months EndedSeptember 30,


June 30,2006


2006(In thousands)Balance at beginning of period

$
193


$
120Additions


5



104Settlements


(9
)


(31
)Balance at end of period

$
189


$
193   13.
    Treasury
    stock      14.
    Recent
    Accounting Pronouncements       15




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##### Table of Contents





MOLDFLOW
    CORPORATION




NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)


























16



---



##### Table of Contents



|        |                                                                                              
|------- | ---------------------------------------------------------------------------------------------
|Item 2. | Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations







Forward-Looking
    Statements




Form 10-Q




Form 10-K,




Corporate
    Strategy Overview








easy-to-use






17



---



##### Table of Contents



















Design
    Analysis Solutions








Manufacturing
    Solutions




set-up








Critical
    Accounting Policies and Significant Judgments and
    Estimates






18



---



##### Table of Contents



Form 10-K




Overview
    of Results of Operations for the Three Months Ended
    September 30, 2006:




|                              |  |                                            |        |  |         |  |     |               |  |   |         |   |  |  |     |   
|----------------------------- |  | ------------------------------------------ | ------ |  | ------- |  | --- | ------------- |  | - | ------- | - |  |  | --- | --
|                              |  | Three Months                               |        |  |         |  |     | Three Months  |  |   |         |  
|                              |  | Ended                                      |        |  | As a    |  |     | Ended         |  |   | As a    |  
|                              |  | September 30,                              |        |  | % of    |  |     | September 30, |  |   | % of    |  
|                              |  | 2006                                       |        |  | Revenue |  |     | 2005          |  |   | Revenue |  
|                              |  | (In thousands, except for percentage data) |       
|                             
|Revenue                       |  | $                                          | 15,315 |  |         |  | 100 | %             |  | $ | 15,280  |   |  |  | 100 | % 
|Cost of revenue               |  |                                            | 3,311  |  |         |  | 22  |               |  |   | 4,183   |   |  |  | 27  |   
|Operating expenses            |  |                                            | 11,268 |  |         |  | 73  |               |  |   | 11,764  |   |  |  | 77  |   
|                              |  |                                            |        |  |         |  |     |               |  |   |         |   |  |  |     |   
|Income (loss) from operations |  | $                                          | 736    |  |         |  | 5   | %             |  | $ | (667    | ) |  |  | (4  | )%
|                              |  |                                            |        |  |         |  |     |               |  |   |         |   |  |  |     |   





| |   |                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Revenue of $15.3 million for the three-month period ended
    September 30, 2006 results in $736,000 of income from
    operations, compared to a $667,000 loss from operations from the
    same level of revenue in the prior year, primarily reflecting
    savings realized as a result of our fiscal 2006 organizational
    restructurings.
|
| |  | DAS revenue of $11.6 million for the three-month period
    ended September 30, 2006 compared to DAS revenue of
    $11.3 million in the same period of the previous year.                                                                                                                                                                       
|
| |  | MS revenue of $3.7 million for the three-month period ended
    September 30, 2006 compared to MS revenue of
    $4.0 million in the same period of the previous year.                                                                                                                                                                           
|
| |  | Total share-based compensation costs of $398,000 for the
    three-month period ended September 30, 2006 compared to
    $570,000 in the same period of the previous year.                                                                                                                                                                       
|
| |  | Operations generated $1.2 million of cash for the
    three-month period ended September 30, 2006 and
    $1.5 million for the three-month period ended
    September 30, 2005.                                                                                                                                                                  
|
| |  | Stock repurchase program returned 114,500 shares to
    treasury at a cost of $1.4 million.                                                                                                                                                                                                                                                      



Results
    of Operations




Segment Information


19



---



##### Table of Contents



Three Months EndedSeptember 30,


September 30,2006


2005Revenue:Product


52
%


57
%Services


48



43Total revenue


100
%


100
%Costs and operating expenses:Cost of product revenue


13
%


17
%Cost of services revenue


8



11Research and development


14



16Selling and marketing


35



37General and administrative


25



23Amortization of acquired
    intangible assets






Total costs and operating expenses


95



104Income (loss) from operations


5



(4
)Interest income, net


5



3Other income, net






Income before income taxes


10



(1
)Benefit from income taxes


(1
)


(1
)Net income


11
%



%   Revenue
  Three Months EndedSeptember 30,


September 30,2006


2005(In thousands)Revenue:Product

$
7,990


$
8,734Services


7,325



6,546Total

$
15,315


$
15,280     when-and-if-available
 20




---



##### Table of Contents



IncreaseThree Months


(Decrease)


Three MonthsEnded


Compared to


EndedSeptember 30,


Prior Year


September 30,2006


$


%


2005Asia/Australia:DAS products

$
2,802


$
(8
)



%

$
2,810MS products


213



85



66



128DAS services


2,542



437



21



2,105MS services


8



(3
)


(27
)


11Total Asia/Australia

$
5,565


$
511



10
%

$
5,054% of total revenue


36
%










33
%Americas:DAS products

$
980


$
28



3
%

$
952MS products


2,315



(423
)


(15
)


2,738DAS services


1,573



234



17



1,339MS services


488



(18
)


(4
)


506Total Americas

$
5,356


$
(178
)


(3
)%

$
5,535% of total revenue


35
%










36
%Europe:DAS products

$
1,180


$
(560
)


(32
)%

$
1,740MS products


500



134



37



366DAS services


2,530



150



6



2,380MS services


184



(21
)


(10
)


205Total Europe

$
4,394


$
(297
)


(6
)%

$
4,691% of total revenue


29
%










31
%Consolidated:DAS products

$
4,962


$
(540
)


(10
)%

$
5,502MS products


3,028



(204
)


(6
)


3,232DAS services


6,645



821



14



5,824MS services


680



(42
)


(6
)


722Total

$
15,315


$
35




%

$
15,280% of total revenue


100
%










100
%     Design
    Analysis Solutions Division
   21




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##### Table of Contents



Manufacturing
    Solutions Division
      Cost
    of Product Revenue
  DecreaseThree Months


Compared to


Three MonthsEnded


Prior


EndedSeptember 30,


Fiscal Year


September 30,2006


$


%


2005(In thousands, except for percentage data)Cost of revenue:Product

$
2,015


$
(555
)


(21
)%

$
2,570As a percentage of total revenue


13
%










17
%         Cost
    of Services Revenue
  DecreaseThree Months

Compared to

Three MonthsEnded

Prior

EndedSeptember 30,

Fiscal Year

September 30,2006

$

%

2005(In thousands, except for percentage data)Cost of services revenue

$
1,296


$
(317
)


(20
)%

$
1,613As a percentage of total revenue


8
%










11
%    22




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##### Table of Contents



Research
    and Development
  Three Months

Decrease

Three MonthsEnded

Compared to Prior

EndedSeptember 30,

Fiscal Year

September 30,2006

$

%

2005(In thousands, except for percentage data)Research and development

$
2,115


$
(366
)


(15
)%

$
2,481As a percentage of total revenue


14
%










16
%       Selling
    and Marketing
  DecreaseThree Months

Compared to

Three MonthsEnded

Prior

EndedSeptember 30,

Fiscal Year

September 30,2006

$

%

2005(In thousands, except for percentage data)Selling and marketing

$
5,295


$
(355
)


(6
)%

$
5,650As a percentage of total revenue


35
%










37
%      23




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##### Table of Contents



General
    and Administrative
  IncreaseThree Months

Compared to

Three MonthsEnded

Prior

EndedSeptember 30,

Fiscal Year

September 30,2006

$

%

2005(In thousands, except for percentage data)General and administrative

$
3,814


$
230



6
%

$
3,584As a percentage of total revenue


25
%










23
%         Amortization
    of Acquired Intangible Assets
  DecreaseThree Months

Compared to

Three MonthsEnded

Prior

EndedSeptember 30,

Fiscal Year

September 30,2006

$

%

2005(In thousands, except for percentage data)Amortization of acquired
    intangible assets

$
44


$
(5
)


(10
)%

$
49As a percentage of total revenue



%











%     Interest
    Income, Net
   24




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##### Table of Contents



Other
    Income, Net
    Income
    Taxes
               25




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##### Table of Contents



Liquidity
    and Capital Resources
  Three Months


Three MonthsEnded


EndedSeptember 30,


September 30,2006


2005(In thousands)Net cash provided by operating
    activities

$
1,232


$
1,469Net cash provided by investing
    activities


19



319Net cash (used in) provided by
    financing activities


(945
)


1,280Effect of exchange rate changes on
    cash and cash equivalents


103



139Net increase in cash and cash
    equivalents


409



3,207Cash and cash equivalents,
    beginning of period


52,111



48,910Cash and cash equivalents, end of
    period

$
52,520


$
52,117Marketable securities, end of
    period

$
8,113


$
10,508Cash, cash equivalents and
    marketable securities, end of period

$
60,633


$
62,625          26




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##### Table of Contents



Off-Balance
    Sheet Financing Arrangements
    Recent
    Accounting Pronouncements
       27




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##### Table of Contents



Impact of
    Inflation
   28




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##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk  10-K
  Foreign
    Exchange and Interest Rate Risk
    yield-to-maturity
  Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15 15d-15
  Changes
    in Internal Control Over Financial Reporting
   29




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##### Table of Contents



PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    Factors  Form 10-K,
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Maximum Number ofTotal Number of Shares


Shares that MayTotal Number


Average


Purchased as Part of


Yet be Purchasedof Shares


Price Paid


Publicly Announced


Under the PlansPeriod

Purchased


per Share


Plans or Programs


or Programs(1)July 1 - July 31, 2006














403,900August 1 - August 31, 2006


64,500


$
12.17



64,500



339,400September 1 - September 30,
    2006


50,000


$
12.05



50,000



289,400114,500







114,500     (1)
    
    On September 19, 2001, the Companys Board of
    Directors authorized a repurchase of up to 500,000 shares
    of the Companys outstanding common stock. On May 17,
    2006, the Board of Directors cancelled the September
    2001 share repurchase plan and simultaneously authorized a
    revised share repurchase plan allowing the repurchase of up to
    600,000 shares of common stock. The shares may be purchased
    either through the open market or privately negotiated
    transactions, in a manner consistent with applicable securities
    laws and regulations. The share repurchase plan continues
    indefinitely from the authorization date.  Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Securities Holders    Item 5.
    Other
    Information   30




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##### Table of Contents



Item 6.
    Exhibits  Exhibits:
  ExhibitNo.10
.1
*

Form of Restricted Stock Unit
    Award Agreement for Non-employee Directors. (Previously filed as
    an exhibit to the Companys current report on
    Form 8-K
    filed on September 12, 2006, and incorporated by reference
    thereto.)10
.2
*

Moldflow Corporation 2000 Stock
    Option and Incentive Plan, as amended. (Previously filed as an
    exhibit to the Companys current report on
    Form 8-K
    filed on September 12, 2006, and incorporated by reference
    thereto.)31
.1


Rule 13a-14(a)/15d-14(a)
    Certification of Chief Executive Officer. (Filed herewith.)31
.2


Rule 13a-14(a)/15d-14(a)
    Certification of Chief Financial Officer. (Filed herewith.)32
.1


Section 1350 Certification of
    Chief Executive Officer.(1) (Filed herewith.)32
.2


Section 1350 Certification of
    Chief Financial Officer.(1) (Filed herewith.)     (1)
    
    This certification shall not be deemed filed for
    purposes of Section 18 of the Securities Exchange Act of
    1934, or otherwise subject to the liability of that section, nor
    shall it be deemed incorporated by reference into any filing
    under the Securities Act of 1933 or the Securities Exchange Act
    of 1934.*
    
    Indicates a management contract or compensatory plan or
    arrangement required to be filed as an exhibit to this Quarterly
    Report on
    Form 10-Q. 31




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##### Table of Contents



SIGNATURES    Moldflow Corporation
  By:
    /s/  A.
    ROLAND THOMAS   President and Chief Executive Officer
  Moldflow Corporation
  By:
    /s/  CHRISTOPHER
    L. GORGONE   Executive Vice President of Finance,
 Chief Financial Officer and Treasurer
 (Principal Financial Officer)
   32