##### 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 December 31, 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 atFebruary 2,Class

2007Common Stock, $0.01 par value
    per share

11,415,330




---



##### 



MOLDFLOW
    CORPORATION
  FORM 10-Q
 For the Quarter Ended December 31, 2006
  TABLE OF
    CONTENTS
  
  Page NumberPART I.
    FINANCIAL INFORMATIONItem 1.


Unaudited Financial
    Statements:Condensed
    Consolidated Balance Sheet as of December 31, 2006 and
    June 30, 2006


2Condensed
    Consolidated Statement of Operations for the three- and
    six-month periods ended December 31, 2006 and
    December 31, 2005


3Condensed
    Consolidated Statement of Cash Flows for the six-month periods
    ended December 31, 2006 and December 31,
    2005


4Notes to Unaudited
    Condensed Consolidated Financial Statements


5Item 2.


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


18Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


33Item 4.


Controls and
    Procedures


33PART II.
    OTHER INFORMATIONItem 1.


Legal
    Proceedings


35Item 1A.


Risk
    Factors


35Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


35Item 3.


Defaults Upon
    Senior Securities


35Item 4.


Submission of
    Matters to a Vote of Security Holders


35Item 5.


Other
    Information


35Item 6.


Exhibits


36Signatures


37Ex-31.1 Section 302 Certification of the C.E.O.Ex-31.2 Section 302 Certification of the C.F.O.Ex-32.1 Section 906 Certification of the C.E.O.Ex-32.2 Section 906 Certification of the C.F.O.   1




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##### Table of Contents



PART I.
    FINANCIAL INFORMATION  Item 1.
    Unaudited
    Financial Statements  MOLDFLOW
    CORPORATION
 CONDENSED
    CONSOLIDATED BALANCE SHEET  December 31,


June 30,2006


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

$
48,603


$
52,111Marketable securities


12,052



8,443Accounts receivable, net


13,241



12,774Inventories


1,986



1,739Prepaid expenses


6,810



6,535Other current assets


2,840



3,070Total current assets


85,532



84,672Fixed assets, net


3,293



3,129Acquired intangible assets, net


1,057



1,215Goodwill


18,676



18,654Other assets


2,243



2,523Total assets

$
110,801


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

$
1,136


$
2,049Accrued expenses


10,209



10,274Deferred revenue


9,205



11,741Total current liabilities


20,550



24,064Deferred revenue


1,335



1,325Other long-term liabilities


795



847Total liabilities


22,680



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


115



114Treasury stock, at cost


(4,486
)


(2,579
)Additional paid-in capital


77,179



75,335Retained earnings


9,757



6,296Accumulated other comprehensive
    income


5,556



4,791Total stockholders equity


88,121



83,957Total liabilities and
    stockholders equity

$
110,801


$
110,193    2




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##### Table of Contents



MOLDFLOW
    CORPORATION
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS  Three Months Ended


Six Months EndedDecember 31,


December 31,


December 31,


December 31,2006


2005


2006


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

$
10,417


$
10,082


$
18,407


$
18,816Services


7,234



6,812



14,559



13,358Total revenue


17,651



16,894



32,966



32,174Costs and operating expenses:Cost of product revenue


1,941



2,442



3,956



5,012Cost of services revenue


1,526



1,705



2,822



3,318Research and development


2,510



2,195



4,625



4,676Selling and marketing


6,520



5,867



11,815



11,517General and administrative


3,492



3,494



7,306



7,078Restructuring charges






1,387







1,387Amortization of acquired
    intangible assets


42



49



86



98Total costs and operating expenses


16,031



17,139



30,610



33,086Income (loss) from operations


1,620



(245
)


2,356



(912
)Interest income, net


784



631



1,570



1,193Other income, net


17



53



20



34Income before income taxes


2,421



439



3,946



315Provision for income taxes


643



548



485



394Net income (loss)

$
1,778


$
(109
)

$
3,461


$
(79
)Net income (loss) per common share:Basic

$
0.16


$
(0.01
)

$
0.31


$
(0.01
)Diluted

$
0.15


$
(0.01
)

$
0.30


$
(0.01
)Shares used in computing net
    income (loss) per common share:Basic


11,166



11,085



11,161



11,044Diluted


11,657



11,085



11,625



11,044    3




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##### Table of Contents



MOLDFLOW
    CORPORATION
  CONDENSED CONSOLIDATED STATEMENT OF CASH
    FLOWS
  Six Months EndedDecember 31,


December 31,2006


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

$
3,461


$
(79
)Adjustments to reconcile net
    income (loss) to net cash provided by (used in) operating
    activities:Depreciation of fixed assets


598



605Amortization of acquired
    intangible assets


157



170Amortization of other intangible
    assets


511



344Provisions for doubtful accounts


81



34Share-based compensation


917



1,192Excess tax benefits from
    shared-based compensation


(69
)


Other non-cash charges or expenses


(15
)


(124
)Changes in operating assets and
    liabilities:Accounts receivable


(456
)


1,404Inventories, prepaid expenses, and
    other current assets


(84
)


(1,636
)Other assets


(13
)


13Accounts payable


(930
)


(1,997
)Accrued expenses and other
    liabilities


(295
)


1,522Deferred revenue


(2,484
)


(1,984
)Net cash provided by (used in)
    operating activities


1,379



(536
)Cash flows from investing
    activities:Purchases of fixed assets


(655
)


(756
)Capitalization of software
    development costs


(83
)


(410
)Purchases of marketable securities


(14,178
)


(7,225
)Sales and maturities of marketable
    securities


10,569



10,336Net cash (used in) provided by
    investing activities


(4,347
)


1,945Cash flows from financing
    activities:Proceeds from issuance of common
    stock


1,008



1,357Tax withholding payments
    reimbursed by restricted stock


(80
)


Purchase of treasury stock


(1,907
)


Excess tax benefits from
    share-based compensation


69



Net cash (used in) provided by
    financing activities


(910
)


1,357Effect of exchange rate changes on
    cash and cash equivalents


370



(457
)Net (decrease) increase in cash
    and cash equivalents


(3,508
)


2,309Cash and cash equivalents,
    beginning of period


52,111



48,910Cash and cash equivalents, end of
    period

$
48,603


$
51,219    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 Months


Six Months


Six MonthsEnded


Ended


Ended


EndedDecember 31,


December 31,


December 31,


December 31,2006


2005


2006


2005(In thousands)Cost of product revenue

$
9


$
19


$
17


$
34Cost of services revenue


13



26



26



57Research and development


108



96



185



173Selling and marketing


131



141



221



274General and administrative


257



340



467



654Share-based compensation expense
    before related tax effects


518



622



916



1,192Income tax benefit


(67
)


(43
)


(67
)


(74
)Net share-based compensation
    expense

$
451


$
579


$
849


$
1,118  5




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##### Table of Contents



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


Three Months


Six Months


Six MonthsEnded


Ended


Ended


EndedDecember 31,


December 31,


December 31,


December 31,2006(4)


2005


2006


2005Dividend yield


n/a



0
%


0
%


0
%Expected volatility factor(1)


n/a



43.3%-49.2
%


41.1
%


43.3%-49.2
%Risk-free interest rate(2)


n/a



4.1%-4.3
%


4.9
%


3.9%-4.3
%Expected term (in years)(3)


n/a



3.5-5.8



3.5-5.0



3.5-5.8     (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.(4)
    
    No option grants occurred during the three months ended
    December 31, 2006.  Stock
    Plans
     6




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Options:
     Six Months EndedDecember 31, 2006


December 31, 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



176,029



15.15Exercised


(179,277
)


5.62



(146,062
)


8.32Canceled


(225,892
)


13.26



(49,347
)


14.88Outstanding at end of period


1,920,589


$
11.18



2,467,887


$
10.59Options exercisable at end of
    period


1,475,796


$
10.71



1,900,942


$
9.95Weighted average fair value of
    options granted in the period





$
5.18






$
5.74     Options Outstanding


Options ExercisableWeightedAverage


Weighted





WeightedRemaining


Average





AverageContractual


Exercise





ExerciseRange of Exercise Prices

Shares


Life


Price


Shares


Price$0.36-$5.00


434,373



0.6 years


$
4.62



434,373


$
4.62$5.01-$10.00


336,333



2.0 years



9.11



335,333



9.11$10.01-$15.00


683,539



4.8 years



11.95



334,893



11.88$15.01-$20.00


388,744



2.5 years



16.65



293,597



17.02$20.01-$25.00


61,500



1.9 years



21.78



61,500



21.78$25.01-$30.00


16,100



2.1 years



26.24



16,100



26.241,920,589



2.8 years


$
11.18



1,475,796


$
10.71    7




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Restricted
    Stock:
    Six Months EndedDecember 31, 2006


December 31, 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



94,733



15.39Vested


(19,699
)


15.35







Nonvested at end of period


188,114


$
13.16



94,733


$
15.39   non-vested
  net-share net-share
  Restricted
    Stock Units:
  three-year
 8




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.
    Net
    Income (Loss) Per Common Share    Three Months Ended


Six Months EndedDecember 31,


December 31,


December 31,


December 31,2006


2005


2006


2005(In thousands, except per share data)Net income (loss)

$
1,778


$
(109
)

$
3,461


$
(79
)Weighted average shares used in
    computing net income (loss) per common share  basic


11,166



11,085



11,161



11,044Effect of dilutive securities:Stock options and unvested
    restricted stock


491







464



Weighted average shares used in
    computing net income (loss) per common share  diluted


11,657



11,085



11,625



11,044Net income (loss) per common
    share  basic

$
0.16


$
(0.01
)

$
0.31


$
(0.01
)Net income (loss) per common
    share  diluted

$
0.15


$
(0.01
)

$
0.30


$
(0.01
)       4.
    Derivative
    Financial Instruments and Hedging Activities         9




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Acquired
    Intangible Assets      December 31, 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


$
(605
)

$
386


$
991


$
(539
)

$
452Developed technology


1,675



(1,087
)


588



1,675



(1,015
)


660Customer order backlog


40



(40
)






40



(40
)


Non-compete agreements


1,416



(1,333
)


83



1,416



(1,313
)


103Total

$
4,122


$
(3,065
)

$
1,057


$
4,122


$
(2,907
)

$
1,215     Fiscal Year

Amortization Expense(In thousands)2007 (Remainder)

$
1572008


2982009


2462010


2232011


133Total future amortization expense

$
1,057    10




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Inventories    December 31,


June 30,2006


2006(In thousands)Raw materials

$
1,677


$
1,395Finished goods


309



344Total

$
1,986


$
1,739   7.
    Software
    Development Costs      December 31,


June 30,2006


2006(In thousands)Gross carrying amount

$
2,907


$
2,824Less  accumulated
    amortization


(2,085
)


(1,726
)Net carrying amount

$
822


$
1,098   8.
    Comprehensive
    Income (Loss)   11




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##### Table of Contents



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


Six Months EndedDecember 31,


December 31,


December 31,


December 31,2006


2005


2006


2005(In thousands)Net income (loss)

$
1,778


$
(109
)

$
3,461


$
(79
)Other comprehensive income (loss):Increase (decrease) in fair value
    of marketable securities, net of related tax effects


(3
)


9



3



20Increase in value of financial
    instruments designated as hedges, net of related tax effects


51



29



109



68Foreign currency translation
    adjustment


555



(613
)


653



(537
)Other comprehensive income (loss)


603



(575
)


765



(449
)Comprehensive income (loss)

$
2,381


$
(684
)

$
4,226


$
(528
)   9.
    Restructuring
    Plans  April
    2006 Plan
    October
    2005 Plan
    10.
    Segment
    Information  Segment
    Information
     12




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     13




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##### Table of Contents



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


Six Months EndedDecember 31,


December 31,


December 31,


December 31,2006


2005


2006


2005(In thousands)Design Analysis Solutions
    divisionRevenue:Product

$
7,328


$
6,583


$
12,290


$
12,085Services


6,685



6,120



13,330



11,945Total revenue


14,013



12,703



25,620



24,030Cost of revenue:Cost of product revenue


370



332



727



698Cost of services revenue


1,210



1,019



2,237



2,032Total cost of revenue


1,580



1,351



2,964



2,730Gross profit


12,433



11,352



22,656



21,300Operating expenses:Research and development


1,943



1,554



3,685



3,500Selling and marketing


5,195



4,313



9,292



8,470General and administrative


3,332



3,296



6,987



6,673Restructuring charges






1,247







1,247Total operating expenses


10,470



10,410



19,964



19,890Income from
    operations

$
1,963


$
942


$
2,692


$
1,410Manufacturing Solutions
    divisionRevenue:Product

$
3,089


$
3,499


$
6,117


$
6,731Services


549



692



1,229



1,413Total revenue


3,638



4,191



7,346



8,144Cost of revenue:Cost of product revenue


1,571



2,110



3,229



4,314Cost of services revenue


316



686



585



1,286Total cost of revenue


1,887



2,796



3,814



5,600Gross profit


1,751



1,395



3,532



2,544Operating expenses:Research and development


567



641



940



1,176Selling and marketing


1,325



1,554



2,523



3,047General and administrative


160



198



319



405Restructuring charges






140







140Amortization of acquired
    intangible assets


42



49



86



98Total operating expenses


2,094



2,582



3,868



4,866Loss from operations

$
(343
)

$
(1,187
)

$
(336
)

$
(2,322
)Consolidated income (loss) from
    operations

$
1,620


$
(245
)

$
2,356


$
(912
)  14




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Income
    Taxes             15




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    Contingencies,
    Commitments and Guarantor Arrangements      Three Months Ended


Six Months EndedDecember 31,


December 31,


December 31,


December 31,2006


2006


2006


2006(In thousands)Balance at beginning of period

$
189


$
155


$
193


$
120Additions


2



11



7



46Settlements


(9
)


(9
)


(18
)


(9
)Balance at end of period

$
182


$
157


$
182


$
157   13.
    Treasury
    Stock    Total Number ofShares


Total Cost of


Average PurchaseRepurchased


Repurchase


Price per Share(In thousands, except share and per share data)As of June 30, 2006


196,100


$
2,579


$
13.15Three months ended
    September 30, 2006


114,500


$
1,387


$
12.12Three months ended
    December 31, 2006


40,000


$
520


$
13.00As of December 31, 2006


350,600


$
4,486


$
12.80   14.
    Recent
    Accounting Pronouncements   16




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           17




---



##### 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
   18




---



##### Table of Contents



Design
    Analysis Solutions
    Manufacturing
    Solutions
  set-up
    Critical
    Accounting Policies and Significant Judgments and
    Estimates
   19




---



##### Table of Contents



Form 10-K
  Overview
    of Results of Operations for the Three Months and Six Months
    Ended December 31, 2006:
  Three Months





Three MonthsEnded


As a


Ended


As aDecember 31,


% of


December 31,


% of2006


Revenue


2005


Revenue(In thousands, except for percentage data)Revenue

$
17,651



100
%

$
16,894



100
%Cost of revenue


3,467



20



4,147



25Operating expenses


12,564



71



12,992



77Income (loss) from operations

$
1,620



9
%

$
(245
)


(2
)%   Six Months





Six MonthsEnded


As a


Ended


As a %December 31,


% of


December 31,


of2006


Revenue


2005


Revenue(In thousands, except for percentage data)Revenue

$
32,966



100
%

$
32,174



100
%Cost of revenue


6,778



21



8,330



26Operating expenses


23,832



72



24,756



77Income (loss) from operations

$
2,356



7
%

$
(912
)


(3
)%   
    Revenue growth of 4% and 2% in the three- and six-month periods
    ended December 31, 2006, respectively, resulted in more
    significant growth in income from operations reflecting savings
    realized as a result of our fiscal 2006 organizational
    restructurings.
    DAS revenue of $14.0 million for the three-month period
    ended December 31, 2006 compared to revenue of
    $12.7 million in the same period of the previous year. DAS
    revenue of $25.6 million for the six-month period ended
    December 31, 2006 compared to revenue of $24.0 million
    in the same period of the previous year.
    MS revenue of $3.6 million for the three-month period ended
    December 31, 2006 compared to revenue of $4.2 million
    in the same period of the previous year. MS revenue of
    $7.3 million for the six-month period ended
    December 31, 2006 compared to revenue of $8.1 million
    in the same period of the previous year.
    Total share-based compensation costs of $518,000 for the
    three-month period ended December 31, 2006 compared to
    $622,000 in the same period of the previous year. Total
    share-based compensation costs of $916,000 for the six-month
    period ended December 31, 2006 compared to
    $1.2 million in the same period of the previous year.
    Operations generated $1.4 million of cash in the six-month
    period ended December 31, 2006 and consumed $536,000 of
    cash in the six-month period ended December 31, 2005.
    Stock repurchase program returned 40,000 and 154,500 shares
    to treasury at a cost of $520,000 and $1.9 million for the
    three- and six-month periods ended December 31, 2006,
    respectively. 20




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##### Table of Contents



Results
    of Operations
  Segment Information
    Three Months Ended


Six Months EndedDecember 31,


December 31,


December 31,


December 31,2006


2005


2006


2005Revenue:Product


59
%


60
%


56
%


59
%Services


41



40



44



41Total revenue


100
%


100
%


100
%


100
%Costs and operating expenses:Cost of product revenue


11
%


15
%


12
%


16
%Cost of services revenue


9



10



9



10Research and development


14



13



14



15Selling and marketing


37



35



36



36General and administrative


20



21



22



22Restructuring charges






8







4Amortization of acquired
    intangible assets














Total costs and operating expenses


91



102



93



103Income (loss) from operations


9



(2
)


7



(3
)Interest income, net


5



4



5



3Other income, net














Income before income taxes


14



2



12



Provision for income taxes


4



3



1



1Net income (loss)


10
%


(1
)%


11
%


(1
)%  21




---



##### Table of Contents



Revenue
  Three Months Ended


Six Months EndedDecember 31,


December 31,


December 31,


December 31,2006


2005


2006


2005(In thousands)Revenue:Product

$
10,417


$
10,082


$
18,407


$
18,816Services


7,234



6,812



14,559



13,358Total

$
17,651


$
16,894


$
32,966


$
32,174     when-and-if-available
 22




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##### Table of Contents



IncreaseThree Months


(Decrease)


Three MonthsEnded


Compared to


EndedDecember 31,


Prior Year


December 31,2006


$


%


2005Asia/Australia:DAS products

$
3,726


$
498



15
%

$
3,228MS products


431



403



1,439



28DAS services


2,472



254



11



2,218MS services


96



93



3,100



3Total Asia/Australia

$
6,725


$
1,248



23
%

$
5,477% of total revenue


38
%










33
%Americas:DAS products

$
841


$
305



57
%

$
536MS products


2,106



(446
)


(17
)


2,552DAS services


1,534



26



2



1,508MS services


288



(216
)


(43
)


504Total Americas

$
4,769


$
(331
)


(6
)%

$
5,100% of total revenue


27
%










30
%Europe:DAS products

$
2,761


$
(58
)


(2
)%

$
2,819MS products


552



(367
)


(40
)


919DAS services


2,679



285



12



2,394MS services


165



(20
)


(11
)


185Total Europe

$
6,157


$
(160
)


(3
)%

$
6,317% of total revenue


35
%










37
%Consolidated:DAS products

$
7,328


$
745



11
%

$
6,583MS products


3,089



(410
)


(12
)


3,499DAS services


6,685



565



9



6,120MS services


549



(143
)


(21
)


692Total

$
17,651


$
757



4
%

$
16,894% of total revenue


100
%










100
%  23




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##### Table of Contents



Six Months








Six MonthsEnded








EndedDecember 31,


Increase (Decrease) Compared to Prior Year


December 31,2006


$


%


2005Asia/Australia:DAS products

$
6,528


$
490



8
%

$
6,038MS products


644



488



313



156DAS services


5,014



690



16



4,324MS services


104



89



593



15Total Asia/Australia

$
12,290


$
1,757



17
%

$
10,533% of total revenue


37
%










33
%Americas:DAS products

$
1,821


$
333



22
%

$
1,488MS products


4,421



(868
)


(16
)


5,289DAS services


3,107



260



9



2,847MS services


777



(233
)


(23
)


1,010Total Americas

$
10,126


$
(508
)


(5
)%

$
10,634% of total revenue


31
%










33
%Europe:DAS products

$
3,941


$
(618
)


(14
)%

$
4,559MS products


1,052



(234
)


(18
)


1,286DAS services


5,209



435



9



4,774MS services


348



(40
)


(10
)


388Total Europe

$
10,550


$
(457
)


(4
)%

$
11,007% of total revenue


32
%










34
%Consolidated:DAS products

$
12,290


$
205



2
%

$
12,085MS products


6,117



(614
)


(9
)


6,731DAS services


13,330



1,385



12



11,945MS services


1,229



(184
)


(13
)


1,413Total

$
32,966


$
792



2
%

$
32,174% of total revenue


100
%










100
%      24




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##### Table of Contents



Design
    Analysis Solutions Division
      Manufacturing
    Solutions Division
      Cost
    of Product Revenue
  Three Months








Three MonthsEnded








EndedDecember 31,


Decrease Compared to Fiscal Year


December 31,2006


$


%


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

$
1,941


$
(501
)


(21
)%

$
2,442As a percentage of total revenue


11
%










14
%   Six Months








Six MonthsEnded








EndedDecember 31,


Decrease Compared to Prior Fiscal Year


December 31,2006


$


%


2006(In thousands, except for percentage data)Cost of revenue:Product

$
3,956


$
(1,056
)


(21
)%

$
5,012As a percentage of total revenue


12
%










16
%      25




---



##### Table of Contents



Cost
    of Services Revenue
  Three Months








Three MonthsEnded








EndedDecember 31,


Decrease Compared to Prior Fiscal Year


December 31,2006


$


%


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

$
1,526


$
(179
)


(11
)%

$
1,705As a percentage of total revenue


9
%










10
%   Six Months








Six MonthsEnded








EndedDecember 31,


Decrease Compared to Prior Fiscal Year


December 31,2006


$


%


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

$
2,822


$
(496
)


(15
)%

$
3,318As a percentage of total revenue


9
%










10
%         Selling
    and Marketing
  Three Months


Increase


Three MonthsEnded


Compared to Prior


EndedDecember 31,


Fiscal Year


December 31,2006


$


%


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

$
6,520


$
653



11
%

$
5,867As a percentage of total revenue


37
%










35
%  26




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##### Table of Contents



Six Months


Increase


Six MonthsEnded


Compared to Prior


EndedDecember 31,


Fiscal Year


December 31,2006


$


%


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

$
11,815


$
298



3
%

$
11,517As a percentage of total revenue


36
%










36
%         Research
    and Development
  Three Months








Three MonthsEnded








EndedDecember 31,


Increase Compared to Prior Fiscal Year


December 31,2006


$


%


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

$
2,510


$
315



14
%

$
2,195As a percentage of total revenue


14
%










13
%   Six Months








Six MonthsEnded


Decrease Compared to


EndedDecember 31,


Prior Fiscal Year


December 31,2006


$


%


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

$
4,625


$
(51
)


(1
)%

$
4,676As a percentage of total revenue


14
%










15
%      27




---



##### Table of Contents



General
    and Administrative
  Three Months








Three MonthsEnded








EndedDecember 31,


Decrease Compared to Prior Fiscal Year


December 31,2006


$


%


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

$
3,492


$
(2
)



%

$
3,494As a percentage of total revenue


20
%










21
%   Six Months








Six MonthsEnded








EndedDecember 30,


Increase Compared to Prior Fiscal Year


December 30,2006


$


%


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

$
7,306


$
228



3
%

$
7,078As a percentage of total revenue


22
%










22
%           Restructuring
    Charges
   28




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##### Table of Contents



Amortization
    of Acquired Intangible Assets
  Three Months








Three MonthsEnded








EndedDecember 31,


Decrease Compared to Prior Fiscal Year


December 31,2006


$


%


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

$
42


$
(7
)


(14
)%

$
49As a percentage of total revenue



%











%   Six Months








Six MonthsEnded








EndedDecember 31,


Decrease Compared to Prior Fiscal Year


December 31,2006


$


%


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

$
86


$
(12
)


(12
)%

$
98As a percentage of total revenue



%











%     Interest
    Income, Net
      Other
    Income, Net
      Income
    Taxes
   29




---



##### Table of Contents



30




---



##### Table of Contents



Liquidity
    and Capital Resources
  Six Months


Six MonthsEnded


EndedDecember 31,


December 31,2006


2005(In thousands)Net cash provided by operating
    (used in) activities

$
1,379


$
(536
)Net cash (used in) provided by in
    investing activities


(4,347
)


1,945Net cash (used in) provided by
    financing activities


(910
)


1,357Effect of exchange rate changes on
    cash and cash equivalents


370



(457
)Net (decrease) increase in cash
    and cash equivalents


(3,508
)


2,309Cash and cash equivalents,
    beginning of period


52,111



48,910Cash and cash equivalents, end of
    period

$
48,603


$
51,219Marketable securities, end of
    period

$
12,052


$
8,212Cash, cash equivalents and
    marketable securities, end of period

$
60,655


$
59,431          31




---



##### Table of Contents



Off-Balance
    Sheet Financing Arrangements
    Recent
    Accounting Pronouncements
     32




---



##### Table of Contents



Impact of
    Inflation
    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
 33




---



##### Table of Contents



Changes
    in Internal Control Over Financial Reporting
   34




---



##### 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)October 1 - October 31,
    2006














289,400November 1 - November 30, 2006


40,000


$
13.00



40,000



249,400December 1 -
    December 31, 2006














249,40040,000







40,000     (1)
    
    On May 17, 2006, the Board of Directors 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    Name of Director

For


WithheldA. Roland Thomas


10,038,278



476,670Robert P. Schechter


7,737,056



2,777,892     Item 5.
    Other
    Information   35




---



##### Table of Contents



Item 6.
    Exhibits  Exhibits:
  ExhibitNo.10
.1

Loan Modification Agreement dated
    as of February 2, 2007 between Moldflow Corporation and
    Silicon Valley Bank. (Previously filed as an exhibit to the
    Companys current report on Form 8-K filed on
    February 6, 2007 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. 36




---



##### 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)
   37