##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
      ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF
    1934
  For the
    Fiscal Year Ended: June 30, 2006
  Commission File Number:
    000-30027
      Moldflow Corporation
 (Exact name of registrant as
    specified in its charter)
  Delaware

04-3406763(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)   492 Old Connecticut Path, Suite 401 Framingham, MA
    01701
 (Address of principal executive
    offices, including zip code)
  (508) 358-5848
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
 Common Stock, $0.01 par value per share
    Preferred Stock Purchase Rights
  Securities registered pursuant to Section 12(g) of the
    Act:
    None
      o þ
  o þ
  þ o
  Regulation S-K Form 10-K, Form 10-K. o
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 



MOLDFLOW
    CORPORATION
  ANNUAL
    REPORT ON
    FORM 10-K
    FOR FISCAL YEAR ENDED JUNE 30, 2006
  TABLE OF
    CONTENTS
  
  PagePart I.Item 1.


Business


2Item 1A.


Risk
    Factors


7Item 1B.


Unresolved Staff
    Comments


13Item 2.


Properties


13Item 3.


Legal
    Proceedings


13Item 4.


Submission of
    Matters to a Vote of Security Holders


13Part II.Item 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


14Item 6.


Selected Financial
    Data


15Item 7.


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


16Item 7A.


Quantitative and
    Qualitative Disclosures about Market Risk


33Item 8.


Financial
    Statements and Supplementary Data


34Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosures


34Item 9A.


Controls and
    Procedures


34Part III.Item 10.


Directors and
    Executive Officers of the Registrant


37Item 11.


Executive
    Compensation


37Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


37Item 13.


Certain
    Relationships and Related Transactions


37Item 14.


Principal
    Accountant Fees and Services


37Part IV.Item 15.


Exhibits and
    Financial Statement Schedules


38Exhibit Index


38Signatures


41Schedule II.
    Valuation and Qualifying Accounts


42Index to
    Consolidated Financial Statements


F-1Notes to
    Consolidated Financial Statements


F-6Reports of
    Independent Registered Public Accounting Firms


F-33Ex-21.1 Subsidiaries of the RegistrantEx-23.1 Consent of Grant Thornton LLPEx-23.2 Consent of PricewaterhouseCoopers LLPEx-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



This Annual Report on
    Form 10-K
    contains forward-looking statements within the meaning of
    Section 27A of the Securities Act of 1933, as amended, and
    21E of the Securities Exchange Act of 1934, as amended. You can
    identify these statements by forward-looking words such as
    may, will, expect,
    anticipate, believe,
    estimate and continue or similar words.
    You should read statements that contain these words carefully
    because they discuss our future expectations, contain
    projections of our future results of operations or of our
    financial condition, or state other forward-looking
    information. We believe that it is important to communicate our
    future expectations to our investors. However, there may be
    events in the future that we are not able to accurately predict
    or control and that may cause our actual results to differ
    materially from the expectations we describe in our
    forward-looking statements. Investors are cautioned that all
    forward-looking statements involve risks and uncertainties, and
    actual results may differ materially from those discussed as a
    result of various factors, including those factors described in
    Risk Factors beginning on page 7. Readers
    should not place undue reliance on our forward-looking
    statements, and we assume no obligation and do not intend to
    update any forward-looking statements.
   PART I  Item 1.
    Business  Overview
    design-through-manufacture
  Segment and Geographic Information
  Available
    Information
  www.moldflow.com. Form 10-K, Form 10-Q, Form 8-K www.sec.gov . Form 10-K.
 2




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##### Table of Contents



Our
    Products
    Design
    Analysis Solutions Products
    Moldflow
    Plastics
    Advisers®
  ® tm tm .
  Moldflow
    Plastics
    Insight®
  ®
  Manufacturing
    Solutions Products
  ® ® ® tm
 3




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##### Table of Contents



Altanium
    Moldflow
    Plastics Xpert
  ® set-up
  Shotscope
    Celltrack
    Our
    Customers
    Sales and
    Marketing
     4




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##### Table of Contents



Backlog
    Customer
    Support and Other Services
  Customer
    Support and Training
    Consulting
    Services
    Material
    Testing Services
  state-of-the-art
  Competition
     5




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##### Table of Contents



Research
    and Development
      Software Development
    Costs
  Proprietary
    Rights
          Manufacturing
   6




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##### Table of Contents



Compliance
    with Environmental Provisions
    Employees
    Segment
    and Geographic Information
  Segment and Geographic Information
  Item 1A.
    Risk
    Factors    Our
    business may be disrupted by the execution of our restructuring
    plans and we may not achieve the anticipated savings associated
    with the plans.
    We
    make estimates in determining our worldwide income tax
    provision.
     7




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##### Table of Contents



Provision for Income Taxes
    Any
    future mergers, acquisitions and strategic relationships may
    result in lost revenue caused by business disruptions and missed
    opportunities caused by the distraction of our
    management.
    A
    general economic slowdown, particularly in our end markets, may
    adversely impact our results.
    Our
    quarterly operating results are subject to significant
    fluctuations and, as a result,
    period-to-period
    comparisons of our results of operations are not necessarily
    meaningful and should not be relied upon as indicators of future
    performance.
    
    seasonal slowdowns, in particular, in our first and, to a lesser
    extent, our third fiscal quarter, in many of the markets in
    which we sell our products,
    fluctuations in overall gross margins and operating income
    resulting from the actual percentage of revenue derived during
    the quarter from our MS division, whose products have a higher
    cost of revenue when compared to products sold by our DAS
    division,
    the timing and magnitude of capital expenditures, including
    costs relating to the expansion of our operations and
    infrastructure, and planned program spending required for major
    marketing initiatives or tradeshows,
    introductions of new services or enhancements by us and our
    competitors and corresponding changes in pricing policies, 8




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##### Table of Contents




    our increased use of third parties such as distributors, OEM
    partners and resellers which may lessen the control we have over
    revenue and earnings during any particular period,
    the timing and magnitude of our tax expense, resulting from the
    globally distributed nature of our selling and research and
    development operations, and certain on-going tax audits or
    investigations by various local tax authorities that may lead to
    the loss of certain planned-for tax benefits, or increased
    taxable income in certain jurisdictions that may not be offset
    by losses in other tax jurisdictions,
    fluctuations in our tax rate from quarter to quarter due to the
    impact of discrete events, including the settlement of claims,
    the management of audits and other inquiries, the acquisition of
    other companies or other events,
    the impact of expensing stock-based compensation,
    currency and exchange rate fluctuations,
    timing and integration of acquisitions,
    continuing costs of compliance with the Sarbanes-Oxley Act of
    2002, and
    restructuring charges taken during any fiscal year, including
    the restructuring charges taken in our fiscal 2006 year.    If we
    experience delays in introducing new products or if our existing
    or new products do not achieve market acceptance, we may lose
    revenue.
    
    rapid technological advances,
    evolving industry standards,
    changes in end-user requirements,
    intense competition,
    technically complex products,
    frequent new product introductions, and
    evolving offerings by product manufacturers.     9




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##### Table of Contents



If we
    determine that any of our goodwill or intangible assets are
    impaired, we would be required to take a charge to earnings,
    which could have a material adverse effect on our results of
    operations.
      Our
    net income and earnings per share have been and will continue to
    be significantly reduced as a result of the requirement that we
    record compensation expense for shares issued under our stock
    plans.
    If we
    become subject to intellectual property infringement claims, we
    could incur significant expenses and we could be prevented from
    offering specific products or services.
    We may
    lose sales if we are unable to protect important intellectual
    property.
      
    we cannot be certain that our pending United States and foreign
    patent applications will result in issued patents or that the
    claims allowed are or will be sufficiently broad to protect our
    technology, 10




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##### Table of Contents




    third parties may design around our patented technologies or
    seek to challenge or invalidate our patented technologies,
    patents of others may have an adverse effect on our ability to
    do business,
    the contractual provisions that we rely on, in part, to protect
    our trade secrets and proprietary knowledge may be breached, and
    we may not have adequate remedies for any breach and our trade
    secrets and proprietary information may be disclosed to the
    public,
    our trade secrets may become known without breach of such
    agreements or may be independently developed by competitors,
    foreign countries, including some of those in which we conduct
    business, may reduce or limit the protection of our intellectual
    property rights and software piracy, particularly in certain
    countries in Asia, may cause us to lose revenue in those
    countries or customers with worldwide operations, and
    the cost of enforcing our intellectual property rights,
    including actions currently on going, may reduce our future
    profitability.  Our
    financial condition or results of operations may be adversely
    affected by international business risks.
      
    decreased liquidity resulting from longer accounts receivable
    collection cycles typical of certain foreign countries,
    decreased revenue on foreign sales resulting from possible
    foreign currency exchange and conversion issues,
    lower productivity resulting from difficulties managing our
    sales, support, and research and development operations across
    many countries,
    decreased earnings based on changes in tax regulations in
    foreign jurisdictions or the timing of required tax payments in
    foreign jurisdictions that may not yet be offset by tax benefits
    arising from losses in other jurisdictions,
    lost revenue resulting from difficulties associated with
    enforcing agreements and collecting receivables through foreign
    legal systems,
    interruptions of our operations due to political and social
    conditions of the countries in which we do business,
    lost revenue resulting from the imposition by foreign
    governments of trade protection measures, and
    higher cost of sales resulting from import or export licensing
    requirements.  We
    have more limited financial and other resources than many of our
    competitors and potential competitors and may be unable to
    compete successfully against them.
   11




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##### Table of Contents



Disruption
    of operations at our development or manufacturing facilities
    could interfere with our product development and production
    cycles.
    Our MS
    products may lead to product liability claims against
    us.
    We are
    dependent on third parties such as resellers and distributors to
    distribute a substantial portion of our MS
    products.
    Our
    stock price is highly volatile and our stock price could
    experience substantial declines and our managements
    attention may be diverted from more productive
    tasks.
    
    revenues and operating results failing to meet the expectations
    of securities analysts or investors,
    downward revisions in securities analysts estimates or
    changes in general market conditions,
    changes in our senior management personnel,
    sale of shares of our common stock by insiders or affiliated
    persons,
    technological innovations by competitors or in competing
    technologies, 12




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##### Table of Contents




    a decrease in the demand for our common stock,
    investor perception of our industry or our prospects, and
    general technology or economic trends.    Failure
    to comply with Section 404 of Sarbanes-Oxley Act of 2002
    may have a negative impact on investor confidence.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties          Contingencies, Commitments and Guarantor Arrangements.
  Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   13




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities            2006


2005High


Low


High


LowFirst quarter

$
16.48


$
12.90


$
12.75


$
10.51Second quarter

$
15.51


$
13.51


$
15.42


$
11.77Third quarter

$
15.70


$
12.70


$
17.40


$
14.30Fourth quarter

$
15.80


$
11.60


$
16.01


$
12.21     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(2)


per Share


Plans or Programs


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


135,700


$
13.05



135,700



464,300June 1 - June 30, 2006


60,400


$
13.10



60,400



403,900196,100







196,100     (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 stock
    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.(2)
    
    Since our initial public offering, the Company has reacquired
    440,265 shares of common stock for $4.0 million, at an
    average cost of $8.98 per share under both of its
    repurchase plans. 14




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##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K page F-1. Restructuring Plans
  Year Ended June 30,2006


2005


2004


2003


2002(In thousands, except per share data)Statement of Operations
    Data:Revenue:Product

$
38,215


$
38,227


$
26,063


$
17,259


$
17,870Services


27,343



26,191



22,610



19,366



17,218Total revenue


65,558



64,418



48,673



36,625



35,088Costs and operating expenses:Cost of product revenue


10,066



8,866



5,203



2,964



2,518Cost of services revenue


6,841



6,341



4,536



1,210



1,401Research and development


9,568



7,993



6,471



5,650



6,234Selling and marketing


23,305



22,233



20,009



18,638



18,134General and administrative


12,733



12,007



8,548



7,242



6,660Restructuring charges


2,666







508



405



1,272Amortization of acquired
    intangible assets


196



289



445



605



656Total costs and operating expenses


65,375



57,729



45,720



36,714



36,875Income (loss) from operations


183



6,689



2,953



(89
)


(1,787
)Interest income, net


2,571



1,663



1,212



1,089



1,455Other income (loss), net


162



70



(15
)


(198
)


1,712Income before income taxes


2,916



8,422



4,150



802



1,380Provision for income taxes


1,915



1,665



1,522



920



600Net income (loss)

$
1,001


$
6,757


$
2,628


$
(118
)

$
780Net income (loss) per common share:Basic

$
0.09


$
0.63


$
0.26


$
(0.01
)

$
0.08Diluted

$
0.08


$
0.58


$
0.24


$
(0.01
)

$
0.08Shares used in computing net
    income (loss) per common share:Basic


11,114



10,761



10,277



10,020



10,076Diluted


11,817



11,625



10,839



10,020



10,360   15




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##### Table of Contents



As of June 30,2006


2005


2004


2003


2002(In thousands)Balance Sheet Data:Cash, cash equivalents and
    marketable securities

$
60,554


$
60,233


$
51,652


$
52,140


$
50,867Working capital


60,608



55,988



42,866



45,624



44,133Total assets


110,193



107,029



94,358



79,477



76,013Long-term obligations (excluding
    deferred revenue)


847



1,079



1,257



641



614Stockholders equity


83,957



80,149



69,579



60,649



58,640   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Forward-Looking
    Statements
  This portion of our Annual Report contains forward-looking
    statements. Investors are cautioned that all forward-looking
    statements involve risks and uncertainties, and actual results
    may differ materially from those discussed as a result of
    various factors, including those factors described in Risk
    Factors beginning on page 7. Readers should not place
    undue reliance on our forward-looking statements, and we assume
    no obligation to and do not intend to update any forward-looking
    statements.
  Corporate
    Strategy Overview
    easy-to-use
   16




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##### Table of Contents



Reporting
    Periods
    Critical
    Accounting Policies
      Summary of Significant Accounting Policies
  A.
    Revenue
    Recognition  No. 97-2, SOP No. 98-9, SOP No. 97-2
 17




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##### Table of Contents



No. 00-21,
      B.
    Asset
    Valuation Allowances        C.
    Acquisition
    Accounting    D.
    Impairment
    of Acquired Intangible Assets, Goodwill and Other Long-Lived
    Assets   18




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and/or
  E.
    Income
    Tax Accounting      F.
    Capitalization
    of Software Development Costs    G.
    Stock
    Option Accounting  Stock Option and Incentive Plans
  H.
    Restructuring     19




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##### Table of Contents



Overview
    of Fiscal 2006 Results of Operations
  Fiscal Year

As a %

Fiscal Year

As a %

Fiscal Year

As a %Ended

of

Ended

of

Ended

ofJune 30, 2006

Revenue

June 30, 2005

Revenue

June 30, 2004

Revenue($ In thousands)Revenue

$
65,558



100
%

$
64,418



100
%

$
48,673



100
%Cost of revenue


16,907



26



15,207



24



9,739



20Research and development, selling
    and marketing, and general and administrative expenses


45,606



70



42,233



66



35,028



72Restructuring charges


2,666



4











508



1Amortization of acquired
    intangible assets


196







289







445



1Income from operations

$
183




%

$
6,689



10
%

$
2,953



6
%   Notable
    Items:
  
    Total revenue was $65.6 million and represented an increase
    of 2% from the previous year.
    Services revenue, primarily comprised of revenue from annual
    maintenance and support contracts, was $27.3 million and
    represented an increase of 4% from the previous year.
    DAS revenue of $48.5 million represented 74% of total
    revenue and increased 3% over fiscal 2005.
    MS revenue of $17.1 million represented 26% of total
    revenue and was flat when compared to last year.
    Total share-based compensation costs of $2.2 million were
    recorded as a result of our adoption of SFAS 123(R),
    Shared-Based Payment. There were no such amounts
    recorded in previous fiscal years.
    Restructuring plans resulted in charges of $2.7 million,
    mostly related to severance payments.
    Stock repurchase program returned 196,100 shares to
    treasury at a cost of $2.6 million, or an average of
    $13.15 per share.
    Repatriation of $10.6 million of cash to the United States
    from Australia at a cost of $525,000 in additional tax expense. 20




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##### Table of Contents



Results
    of Operations
    Fiscal Year Ended June 30,2006


2005


2004Revenue:Product


58.3
%


59.3
%


53.5
%Services


41.7



40.7



46.5Total revenue


100.0
%


100.0
%


100.0
%Costs and operating expenses:Cost of product revenue


15.4
%


13.8
%


10.7
%Cost of services revenue


10.4



9.8



9.3Research and development


14.6



12.4



13.3Selling and marketing


35.5



34.5



41.1General and administrative


19.4



18.6



17.7Restructuring charges


4.1







1.0Amortization of acquired
    intangible assets


0.3



0.5



.9Total costs and operating expenses


99.7



89.6



94.0Income from operations


0.3



10.4



6.0Interest income, net


3.9



2.6



2.5Other income (loss), net


0.2



0.1



(0.0
)Income before income taxes


4.4



13.1



8.5Provision for income taxes


2.9



2.6



3.1Net income


1.5
%


10.5
%


5.4
%   Revenue
    
    license fees for our packaged software,
    product fees for our collaborative production management
    products, and
    services revenue derived from maintenance and support related to
    our products, consulting, implementation, training and material
    testing.    Increase(Decrease)





IncreaseCompared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)Revenue:Product

$
38,215


$
(12
)





$
38,227


$
12,164



47
%

$
26,063Services


27,343



1,152



4
%


26,191



3,581



16



22,610Total

$
65,558


$
1,140



2
%

$
64,418


$
15,745



32
%

$
48,673  21




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##### Table of Contents



Increase(Decrease)





IncreaseCompared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)Revenue:Asia/Australia

$
21,969


$
1,311



6
%

$
20,658


$
4,396



27
%

$
16,262Americas


22,326



(607
)


(3
)


22,933



7,775



51



15,158Europe


21,263



436



2



20,827



3,574



21



17,253Total

$
65,558


$
1,140



2
%

$
64,418


$
15,745



32
%

$
48,673Percentage of total revenue:Asia/Australia


34
%










32
%










33
%Americas


34











36











31Europe


32











32











36Total


100
%










100
%










100
%  22




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##### Table of Contents



Product
    revenue
    Increase





Increase(Decrease)





(Decrease)Compared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)Asia/Australia product revenue:Design Analysis Solutions

$
12,391


$
(10
)



%

$
12,401


$
3,061



33
%

$
9,340Manufacturing Solutions


557



514



1,195



43



(9
)


(17
)


52Total


12,948



504



4



12,444



3,052



32



9,392Americas product revenue:Design Analysis Solutions


3,134



(351
)


(10
)


3,485



1,368



65



2,117Manufacturing Solutions


11,186



(963
)


(8
)


12,149



5,838



93



6,311Total


14,320



(1,314
)


(8
)


15,634



7,206



86



8,428Europe product revenue:Design Analysis Solutions


8,435



492



6



7,943



1,939



32



6,004Manufacturing Solutions


2,512



306



14



2,206



(33
)


(2
)


2,239Total


10,947



798



8



10,149



1,906



23



8,243Total product revenue:Design Analysis Solutions


23,960



131



1



23,829



6,368



36



17,461Manufacturing Solutions


14,255



(143
)


(1
)


14,398



5,796



67



8,602Total

$
38,215


$
(12
)



%

$
38,227


$
12,164



47
%

$
26,063Percentage of total product
    revenue:Design Analysis Solutions


63
%










62
%










67
%Manufacturing Solutions


37











38











33Total


100
%










100
%










100
%      23




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##### Table of Contents



Design
    Analysis Solutions Product Revenue
      Manufacturing
    Solutions Product Revenue
   24




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##### Table of Contents



Services
    Revenue
    Increase





Increase(Decrease)





(Decrease)Compared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)Asia/Australia services revenue:Design Analysis Solutions

$
8,980


$
776



9
%

$
8,204


$
1,354



20
%

$
6,850Manufacturing Solutions


41



31



310



10



(10
)


(50
)


20Total


9,021



807



10



8,214



1,344



20



6,870Americas services revenue:Design Analysis Solutions


5,899



376



7



5,523



6







5,517Manufacturing Solutions


2,107



331



19



1,776



563



46



1,213Total


8,006



707



10



7,299



569



8



6,730Europe services revenue:Design Analysis Solutions


9,643



(18
)






9,661



1,579



20



8,082Manufacturing Solutions


673



(344
)


(34
)


1,017



89



10



928Total


10,316



(362
)


(3
)


10,678



1,668



19



9,010Total services revenue:Design Analysis Solutions


24,522



1,134



5



23,388



2,939



14



20,449Manufacturing Solutions


2,821



18



1



2,803



642



30



2,161Total

$
27,343


$
1,152



4
%

$
26,191


$
3,581



16
%

$
22,610Percentage of total services
    revenue:Design Analysis Solutions


90
%










89
%










90
%Manufacturing Solutions


10











11











10Total


100
%










100
%










100
%   when-and-if-available
    Cost
    and Operating Expenses
  Share-Based Payment
 25




---



##### Table of Contents



Stock Option and Incentive Plans.
  Cost
    of Product Revenue
  Increase





IncreaseCompared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)Cost of product revenue

$
10,066


$
1,200



13.5
%

$
8,866


$
3,663



70
%

$
5,203As a percentage of total revenue


15
%










14
%










11
%         Cost
    of Services Revenue
  Increase





IncreaseCompared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)Cost of services revenue

$
6,841


$
500



8
%

$
6,341


$
1,805



40
%

$
4,536As a percentage of total revenue


10
%










10
%










9
%        26




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##### Table of Contents



Research
    and Development
  Increase





IncreaseCompared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)Research and development

$
9,568


$
1,575



20
%

$
7,993


$
1,522



24
%

$
6,471As a percentage of total revenue


15
%










12
%










13
%         Selling
    and Marketing
  Increase





IncreaseCompared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)Selling and marketing

$
23,305


$
1,072



5
%

$
22,233


$
2,224



11
%

$
20,009As a percentage of total revenue


36
%










35
%










41
%      27




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##### Table of Contents



General
    and Administrative
  Increase





IncreaseCompared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)General and administrative

$
12,733


$
726



6
%

$
12,007


$
3,459



40
%

$
8,548As a percentage of total revenue


19
%










19
%










18
%         Restructuring
    Charges
  Increase





DecreaseCompared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004(In thousands)Restructuring charges

$
2,666



2,666



N/A


$



$
(508
)


(100
)%

$
508As a percentage of total revenue


4
%






















1
%       Restructuring Plans
 28




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##### Table of Contents



Amortization
    of Acquired Intangible Assets
  Decrease





DecreaseCompared





Comparedto Prior





to PriorFiscal


Fiscal Year


Fiscal


Fiscal Year


Fiscal2006


$


%


2005


$


%


2004($ In thousands)Amortization of acquired
    intangible assets

$
196


$
(93
)


(32
)%

$
289


$
(156
)


(35
)%

$
445As a percentage of total revenue


























1
%       Interest
    Income, Net
      Other
    Income (Loss), Net
      Provision
    for Income Taxes
  Summary of Significant Accounting Policies Income Taxes
     29




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##### Table of Contents



Business
    Combinations
    Liquidity
    and Capital Resources
  Fiscal Year Ended June 30,2006


2005


2004($ In thousands)Net cash provided by operating
    activities

$
1,939


$
6,338


$
6,467Net cash provided by (used in)
    investing activities


1,135



2,991



(10,827
)Net cash provided by financing
    activities


647



2,490



1,226Effect of exchange rate changes on
    cash and cash equivalents


(520
)


1,104



801Net increase (decrease) in cash
    and cash equivalents


3,201



12,923



(2,333
)Cash and cash equivalents,
    beginning of year


48,910



35,987



38,320Cash and cash equivalents, end of
    year

$
52,111


$
48,910


$
35,987Marketable securities, end of year

$
8,443


$
11,323


$
15,665Cash, cash equivalents and
    marketable securities, end of year

$
60,554


$
60,233


$
51,652  30




---



##### Table of Contents



31




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodLess








MoreThan








ThanTotal


1 Year


1-3 Years


3-5 Years


5 Years(In thousands)Operating lease obligations

$
9,111


$
1,645


$
3,673


$
2,305


$
1,488Capital lease obligations


21



4



12



5



Purchase obligations(1)


1,403



1,222



181







Total

$
10,535


$
2,871


$
3,866


$
2,310


$
1,488     (1)
    
    For the purposes of this table, contractual obligations for
    purchase of goods or services are defined as agreements that are
    enforceable and legally binding and that specify all significant
    terms, including: fixed or minimum quantities to be purchased;
    fixed, minimum or variable price provisions; and the approximate
    timing of the transaction.  Off-Balance
    Sheet Financing Arrangements
    Recent
    Accounting Pronouncements
       32




---



##### Table of Contents



Impact of
    Inflation
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Foreign
    Exchange Risk
     33




---



##### Table of Contents



Interest
    Rate Risk
        Credit
    Risk
    Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K page F-2.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosures  8-K
  Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15 15d-15
 34




---



##### Table of Contents



Changes
    in Internal Control Over Financial Reporting
    Managements
    Report on Internal Control over Financial Reporting
  Rules 13a-15(f) 15d-15(f),
          Internal Control 
    Integrated Framework.
     35




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
  criteria established
    in Internal Control  Integrated Framework issued by
    the Committee of Sponsoring Organizations of the Treadway
    Commission (COSO)
        Internal Control 
    Integrated Framework ) Internal Control 
    Integrated .
    GRANT
    THORNTON LLP
  
 36




---



##### Table of Contents



PART III  Item 10.
    Directors
    and Executive Officers of the Registrant  Directors.
  Executive Officers.
  Section 16(a) Beneficial Ownership Reporting
    Compliance.
  Code of Ethics.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters     Item 13.
    Certain
    Relationships and Related Transactions     Item 14.
    Principal
    Accountant Fees and Services   37




---



##### Table of Contents



PART IV   Item 15.
    Exhibits
    and Financial Statement Schedules  Consolidated Financial Statements
  Form 10-K page F-1.
  Financial Statement Schedule
  Form 10-K:
  Page No.Schedule II 
    Valuation and Qualifying Accounts


42     List of Exhibits
   EXHIBIT INDEX  ExhibitNo.

Title2
.2

Agreement and Plan of Merger by
    and among Moldflow Corp., MF Merger Sub I, Inc., American
    MSI Corp., the Timothy and Deborah Triplett Family Trust,
    Timothy L. Triplett and Deborah A. Triplett, dated
    January 23, 2004. (Previously filed as an exhibit to the
    Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 27, 2003 filed with
    the Securities and Exchange Commission on February 10, 2004
    and incorporated by reference thereto.)3
.1

Third Amended and Restated
    Certificate of Incorporation of the Registrant. (Previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 1, 2000 filed with the
    Securities and Exchange Commission on May 12, 2000 and
    incorporated by reference thereto.)3
.2

Second Amended and Restated
    By-laws of the Registrant. (Previously filed as an exhibit to
    the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 1, 2000 filed with the
    Securities and Exchange Commission on May 12, 2000 and
    incorporated by reference thereto.)3
.3

Certificate of Amendment of Third
    Amended and Restated Certificate of Incorporation. (Previously
    filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended June 30, 2002 filed with the
    Securities and Exchange Commission on September 19, 2002
    and incorporated by reference thereto.)3
.4

Certificate of Designations,
    Preferences and Rights of a Series of Preferred Stock of
    Moldflow Corporation classifying and designating the
    Series A Junior Participating Preferred Stock. (Previously
    filed as an exhibit to the Companys Registration Statement
    on
    Form 8-A
    filed with the Securities and Exchange Commission on
    February 3, 2003 and incorporated by reference thereto.)4
.1

Shareholder Rights Agreement,
    dated as of January 29, 2003, between Moldflow Corporation
    and EquiServe Trust Company, as Rights Agent. (Previously filed
    as an exhibit to the Companys Registration Statement on
    Form 8-A
    filed with the Securities and Exchange Commission on
    February 3, 2003 and incorporated by reference thereto.)10
.1

Form of Incentive Stock Option
    Agreement for Executive Officers under the Moldflow Corporation
    2000 Stock Option and Incentive Plan. (Previously filed as an
    exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 25, 2004 filed with
    the Securities and Exchange Commission on November 3, 2004
    and incorporated by reference thereto.)10
.2

Form of Non-Qualified Stock Option
    Agreement for Executive Officers under the Moldflow Corporation
    2000 Stock Option and Incentive Plan. (Previously filed as an
    exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 25, 2004 filed with
    the Securities and Exchange Commission on November 3, 2004
    and incorporated by reference thereto.) 38




---



##### Table of Contents



ExhibitNo.

Title10
.3

Form of Non-Qualified Stock Option
    Agreement for Non-Employee Directors under the Moldflow
    Corporation 2000 Stock Option and Incentive Plan. (Previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 25, 2004 filed with
    the Securities and Exchange Commission on November 3, 2004
    and incorporated by reference thereto.)10
.4

Third Amendment to the Moldflow
    Corporation 2000 Stock Option and Incentive Plan. (Previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 27, 2003 filed with
    the Securities and Exchange Commission on February 10, 2004
    and incorporated by reference thereto.)10
.5

Lease between Moldflow Corporation
    and 492 OCP, LLC dated as of January 28, 2005. (Previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    filed on February 2, 2005, and incorporated by reference
    thereto.)10
.6

Loan Modification Agreement dated
    as of January 31, 2005 between Moldflow Corporation and
    Silicon Valley Bank. (Previously filed as an exhibit to the
    Companys Quarterly Report on
    Form 10-Q
    filed on February 2, 2005, and incorporated by reference
    thereto.)10
.7

Moldflow Corporation 2000 Stock
    Option and Incentive Plan, as amended. (Previously filed as an
    exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 28, 2002 filed with
    the Securities and Exchange Commission on February 7, 2003
    and incorporated by reference thereto.)10
.8

Form of Incentive Stock Option
    Agreement under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.9

Form of Non-Qualified Stock Option
    Agreement for Company Employees under the Moldflow Corporation
    2000 Stock Option and Incentive Plan. (Previously filed as an
    exhibit to the Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.10

Moldflow Corporation Employee
    Stock Purchase Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.11

Moldflow Corporation 1997 Equity
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.12

Form of Director Indemnification
    Agreement to be entered into between the Registrant and Each
    Non-employee Director. ** (Previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.13

Form of Non-Qualified Stock Option
    Agreement for Non-Employee Directors under the Moldflow
    Corporation 2000 Stock Option and Incentive Plan. ** (Previously
    filed as an exhibit to the Companys Registration Statement
    on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.14

Loan Agreement as of
    November 13, 2001 between Silicon Valley Bank and Moldflow
    Corporation. (Previously filed as an exhibit to the
    Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 29, 2001 filed with
    the Securities and Exchange Commission on February 11, 2002
    and incorporated by reference thereto.)10
.15

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    Kenneth R. Welch.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed July 14, 2005 and incorporated by reference thereto.)10
.16

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    A. Roland Thomas.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005 and incorporated by reference
    thereto.)10
.17

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    Ian M. Pendlebury.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005 and incorporated by reference
    thereto.)10
.18

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    Peter K. Kennedy.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005 and incorporated by reference
    thereto.)10
.19

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    Lori M. Henderson.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005 and incorporated by reference
    thereto.) 39




---



##### Table of Contents



ExhibitNo.

Title10
.20

Amended and Restated Employment
    Agreement dated as of July 8, 2005 between Christopher L.
    Gorgone and Moldflow Corporation.** (Previously filed as an
    exhibit to the Companys Current Report on
    Form 8-K
    filed on July 14, 2005, and incorporated by reference
    thereto.)10
.21

Form of Cash Bonus Plan for
    Certain Executive Officers and Key Employees.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 29, 2005, and incorporated by reference
    thereto.)10
.22

Form of Restricted Stock Award
    Agreement for Executive Officers under the Moldflow Corporation
    2000 Stock Option and Incentive Plan, except with respect to Ian
    Pendlebury and Peter Kennedy, in which case paragraph 8 has
    been deleted.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on September 29, 2005, and incorporated by reference
    thereto.)10
.23

Amended and Restated Employment
    Agreement dated as of July 8, 2005 between the Registrant
    and Timothy Triplett.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005, and incorporated by reference
    thereto.)10
.24

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
.25

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.)16
.1

Letter Regarding Change in
    Certifying Accountant. (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on March 10, 2006, and incorporated by reference
    thereto.)21
.1

Subsidiaries of the Registrant.
    (Filed herewith.)23
.1

Consent of Grant Thornton LLP.
    (Filed herewith.)23
.2

Consent of PricewaterhouseCoopers
    LLP. (Filed herewith.)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.)     **
    
    Management contract or compensatory plan or arrangement required
    to be filed as an exhibit to this form pursuant to
    Item 15(c) of this report.(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.  Exhibits
    Other Financial Statements
 40




---



##### Table of Contents



SIGNATURES  Form 10-K
  Moldflow Corporation
  By:
    /s/  Christopher
    L. Gorgone     Executive Vice President and
  Chief Financial Officer
      Signature

Title

Date/s/  A.
    Roland
    Thomas

President, Chief Executive
    Officer and Chairman of the 
    Board of Directors 
    (Principal Executive Officer)

September 13, 2006/s/  Christopher
    L. Gorgone

Executive Vice President and
    Chief Financial Officer
    (Principal Financial Officer and Principal Accounting Officer)

September 13, 2006/s/  Roger
    E. Brooks

Director

September 13, 2006/s/  Frank
    W. Haydu
    III

Director

September 13, 2006/s/  Robert
    J. Lepofsky

Director

September 13, 2006/s/  Robert
    P.
    Schechter

Director

September 13, 2006  41




---



##### Table of Contents



SCHEDULE II  Schedule II.  Valuation
    and Qualifying Accounts
  Beginning








EndingItem

Balance


Additions


Deductions


Balance(In thousands)For the year ended June 30,
    2006:Allowance for doubtful accounts

$
155


$
126
(a)

$
(38
)(b)

$
243Deferred tax asset valuation
    allowance


1,967



661
(a)


(60
)(c)


2,568For the year ended June 30,
    2005:Allowance for doubtful accounts

$
420


$
58
(a)

$
(323
)(b)

$
155Deferred tax asset valuation
    allowance


1,514



885
(a)


(432
)(c)


1,967For the year ended June 30,
    2004:Allowance for doubtful accounts

$
347


$
139
(a)

$
(66
)(b)

$
420Deferred tax asset valuation
    allowance


789



852
(a)


(127
)(c)


1,514     (a)
    
    Additional provisions and foreign currency translation effects.(b)
    
    Specific write-offs, collections of previously reserved items
    recorded as a benefit to general and administrative expenses and
    foreign currency translation effects.(c)
    
    Utilization of net operating loss carryforwards, reductions in
    other deferred tax assets and foreign currency translation
    effects. 42




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS  Consolidated
    Balance Sheet at June 30, 2006 and 2005

F-2Consolidated
    Statement of Income for the years ended June 30, 2006, 2005
    and 2004

F-3Consolidated
    Statement of Stockholders Equity and Comprehensive Income
    for the years ended June 30, 2006, 2005 and 2004

F-4Consolidated
    Statement of Cash Flows for the years ended June 30, 2006,
    2005 and 2004

F-5Notes to
    Consolidated Financial Statements

F-6Reports of
    Independent Registered Public Accounting Firms

F-33   F-1




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  CONSOLIDATED BALANCE SHEET
  June 30,2006


2005(In thousands, except share and per sharedata)ASSETSCurrent assets:Cash and cash equivalents

$
52,111


$
48,910Marketable securities


8,443



11,323Accounts receivable, net of
    allowance for doubtful accounts of $243 and $155 at
    June 30, 2006 and 2005, respectively


12,774



13,449Inventories


1,739



1,381Prepaid expenses


6,535



3,013Other current assets


3,070



2,589Total current assets


84,672



80,665Fixed assets, net


3,129



3,336Acquired intangible assets, net


1,215



1,555Goodwill


18,654



18,622Other assets


2,523



2,851Total assets

$
110,193


$
107,029LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
2,049


$
3,764Accrued expenses


10,274



10,165Deferred revenue


11,741



10,748Total current liabilities


24,064



24,677Deferred revenue


1,325



1,124Other long-term liabilities


847



1,079Total liabilities


26,236



26,880Contingencies, commitments and
    guarantor arrangements (Note 19)Stockholders equity:Preferred stock, $0.01 par
    value; 5,000,000 shares authorized; no shares issued and
    outstanding at June 30, 2006 and 2005






Common stock, $0.01 par
    value; 40,000,000 shares authorized; 11,410,030 shares
    issued, and 11,213,930 outstanding at June 30, 2006 and
    10,930,954 shares issued and outstanding at June 30,
    2005


114



109Treasury stock, at cost;
    196,100 shares at June 30, 2006 and no shares at
    June 30, 2005


(2,579
)


Additional paid-in capital


75,335



69,626Retained earnings


6,296



5,295Accumulated other comprehensive
    income


4,791



5,119Total stockholders equity


83,957



80,149Total liabilities and
    stockholders equity

$
110,193


$
107,029    F-2




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  CONSOLIDATED STATEMENT OF INCOME
  Year Ended June 30,2006


2005


2004(In thousands, exceptper share data)Revenue:Product

$
38,215


$
38,227


$
26,063Services


27,343



26,191



22,610Total revenue


65,558



64,418



48,673Costs and operating expenses:Cost of product revenue


10,066



8,866



5,203Cost of services revenue


6,841



6,341



4,536Research and development


9,568



7,993



6,471Selling and marketing


23,305



22,233



20,009General and administrative


12,733



12,007



8,548Restructuring charges


2,666







508Amortization of acquired
    intangible assets


196



289



445Total costs and operating expenses


65,375



57,729



45,720Income from operations


183



6,689



2,953Interest income


2,582



1,665



1,248Interest expense


(11
)


(2
)


(36
)Other income (loss), net


162



70



(15
)Income before income taxes


2,916



8,422



4,150Provision for income taxes


1,915



1,665



1,522Net income

$
1,001


$
6,757


$
2,628Net income per common share:Basic

$
0.09


$
0.63


$
0.26Diluted

$
0.08


$
0.58


$
0.24Shares used in computing net
    income per common share:Basic


11,114



10,761



10,277Diluted


11,817



11,625



10,839    F-3




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  CONSOLIDATED STATEMENT OF STOCKHOLDERS
    EQUITY AND COMPREHENSIVE INCOME
  Retained


AccumulatedCommon Stock


Additional








Earnings/


Other


TotalShares


Par


Paid-In


Treasury Stock


(Accumulated


Comprehensive


Stockholders


ComprehensiveIssued


Value


Capital


Shares


Cost


Deficit)


Income


Equity


Income(In thousands, except share data)Balance at June 30, 2003


10,217,299


$
102


$
62,867



(185,417
)

$
(926
)

$
(4,090
)

$
2,696


$
60,649Issuance of common stock in
    connection with the acquisition of AMSI (Note 3)


202,424



2



3,644



146,864



745











4,391Exercise of stock options


199,709



2



963



















965Issuance of stock under employee
    stock purchase plan










80



38,553



181











261Comprehensive income:Net income






















2,628







2,628


$
2,628Change in unrealized losses on
    investments, net of taxes


























(607
)


(607
)


(607
)Change in unrealized losses on
    hedging instruments, net of taxes


























(19
)


(19
)


(19
)Foreign currency translation
    adjustment


























1,311



1,311



1,311Comprehensive income

































$
3,313Balance at June 30, 2004


10,619,432



106



67,554











(1,462
)


3,381



69,579Exercise of stock options


298,120



3



1,816



















1,819Issuance of stock under employee
    stock purchase plan


13,402







256



















256Comprehensive income:Net income






















6,757







6,757


$
6,757Change in unrealized losses on
    investments, net of taxes


























17



17



17Change in unrealized losses on
    hedging instruments, net of taxes


























(6
)


(6
)


(6
)Foreign currency translation
    adjustment


























1,727



1,727



1,727Comprehensive income

































$
8,495Balance at June 30, 2005


10,930,954



109



69,626











5,295



5,119



80,149Purchase of treasury stock














(196,100
)


(2,579
)










(2,579
)Exercise of stock options


384,476



4



2,760



















2,764Issuance of restricted stock


94,733



1



(1
)Forfeitures of restricted stock


(12,989
)Share-based compensation










2,170



















2,170Tax benefit from share-based
    compensation transactions










639



















639Issuance of stock under employee
    stock purchase plan


12,856







141



















141Comprehensive income:Net income






















1,001







1,001


$
1,001Change in unrealized losses on
    investments, net of taxes


























31



31



31Change in unrealized losses on
    hedging instruments, net of taxes


























(9
)


(9
)


(9
)Foreign currency translation
    adjustment


























(350
)


(350
)


(350
)Comprehensive income

































$
673Balance at June 30, 2006


11,410,030


$
114


$
75,335



(196,100
)

$
(2,579
)

$
6,296


$
4,791


$
83,957    F-4




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  CONSOLIDATED STATEMENT OF CASH FLOWS
  Year Ended June 30,2006


2005


2004(In thousands)Cash flows from operating
    activities:Net income

$
1,001


$
6,757


$
2,628Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation of fixed assets


1,314



1,484



1,428Amortization of acquired
    intangible assets


338



431



505Amortization of other intangible
    assets


744



720



286Provisions for doubtful accounts


83



(92
)


139Foreign exchange (gains) losses


(214
)


(83
)


1Share-based compensation


2,170







Excess tax benefits from
    share-based compensation


(254
)






Other non-cash charges


474



(99
)


13Changes in operating assets and
    liabilities, net of effects of acquisitions:Accounts receivable


759



(4,795
)


(621
)Inventories, prepaid expenses and
    other current assets


(3,769
)


(371
)


(16
)Other assets


181



151



(156
)Accounts payable


(1,720
)


481



649Accrued expenses and other
    long-term liabilities


(268
)


361



638Deferred revenue


1,100



1,393



973Net cash provided by operating
    activities


1,939



6,338



6,467Cash flows from investing
    activities:Purchases of fixed assets


(1,249
)


(1,167
)


(1,035
)Capitalization of software
    development costs


(496
)


(201
)


(856
)Purchases of marketable securities


(19,481
)


(5,096
)


(11,105
)Sales of marketable securities


22,361



9,455



9,260Acquisition of AMSI, net of cash
    acquired










(7,091
)Net cash provided by (used in)
    investing activities


1,135



2,991



(10,827
)Cash flows from financing
    activities:Proceeds from issuance of common
    stock


2,972



2,490



1,226Purchase of treasury stock


(2,579
)






Excess tax benefits from
    share-based compensation


254







Net cash provided by financing
    activities


647



2,490



1,226Effect of exchange rate changes on
    cash and cash equivalents


(520
)


1,104



801Net increase (decrease) in cash
    and cash equivalents


3,201



12,923



(2,333
)Cash and cash equivalents,
    beginning of year


48,910



35,987



38,320Cash and cash equivalents, end of
    year

$
52,111


$
48,910


$
35,987Supplemental disclosure of cash
    flow information:Cash paid during the year for
    income taxes

$
1,713


$
1,764


$
1,233    F-5




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Basis of
    Presentation and Nature of Business        2.
    Summary
    of Significant Accounting Policies  Estimates
    and Assumptions
    Principles
    of Consolidation
    Acquisition
    Accounting
    Foreign
    Currency Translation
   F-6




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Cash and
    Cash Equivalents
    Marketable
    Securities and Investment Policy
    available-for-sale
  Concentration
    of Credit Risk
    Fair
    Value of Financial Instruments
    Hedging
   F-7




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Inventories
  first-in,
  Fixed
    Assets
    Goodwill
    and Acquired Intangible Assets
       F-8




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     EstimatedUseful Life(Years)Customer base


3.5-7Developed technology


4-7Non-compete agreements


1-5Customer order backlog


0.5   Long-Lived
    Assets
    Revenue
    Recognition
    Licenses and Other Product Fees: No. 97-2, SOP No. 98-9, SOP No. 97-2
  Product Fees from Hot Runner Process
    Controllers: No. 00-21,
  Service Fees: SOP 97-2,
 F-9




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Modification or Customization:
  Evidence of an Arrangement:
  Collectibility:
  Fixed or Determinable Price:
  Customer Acceptance Criteria:
  Resellers:
  Product Return/Stock Rotation/Price
    Protection:
  Shipping and Handling Fees:
 F-10




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Software
    Development Costs
    SOP No. 98-1,
  Advertising
    Costs
    Income
    Taxes
    Stock-Based
    Compensation
      Restructuring
   F-11




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Net
    Income Per Common Share
    Comprehensive
    Income
    Recent
    Accounting Pronouncements
       F-12




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      3.
    Acquisitions  American
    MSI Corporation
     F-13




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Cash and cash equivalents

$
439Accounts receivable


1,557Inventories


867Other current assets


44Fixed assets


213Customer base


560Developed technology


1,000Non-compete agreements


200Backlog of customer orders


40Long-term deferred tax assets


656Goodwill


9,032Total assets acquired


14,608Current liabilities


(1,966
)Long-term deferred tax liabilities


(720
)$
11,922       Year EndedJune 30,2004Revenue

$
53,586Net income


2,689Net income per common share:Basic

$
0.26Diluted

$
0.24   4.
    Goodwill
    and Acquired Intangible Assets   F-14




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended June 30,2006


2005(In thousands)Beginning balance

$
18,622


$
18,625Foreign exchange impact


32



(3
)Ending balance

$
18,654


$
18,622       June 30, 2006


June 30, 2005Gross





Net


Gross





Net


Weighted-Carrying


Accumulated


Carrying


Carrying


Accumulated


Carrying


AverageAmount


Amortization


Amount


Amount


Amortization


Amount


Useful LifeAcquired intangible assets:Customer base

$
991


$
(539
)

$
452


$
987


$
(380
)

$
607



6.6 yearsDeveloped technology


1,675



(1,015
)


660



1,675



(870
)


805



5.8 yearsCustomer order backlog


40



(40
)






40



(40
)


0



0.5 yearsNon-compete agreements


1,416



(1,313
)


103



1,411



(1,268
)


143



3.5 years$
4,122


$
(2,907
)

$
1,215


$
4,113


$
(2,558
)

$
1,555       EstimatedAmortizationYear Ending June 30,

Expense(In thousands)2007

$
3142008


2982009


2462010


2232011


134$
1,215   5.
    Derivative
    Financial Instruments and Hedging Activities   F-15




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        6.
    Inventories    June 30,2006


2005(In thousands)Raw materials

$
1,395


$
991Finished goods


344



390$
1,739


$
1,381   7.
    Software
    Development Costs      June 30,2006


2005(In thousands)Gross carrying amount

$
2,824


$
2,328Less  accumulated
    amortization


(1,726
)


(1,077
)Net carrying amount

$
1,098


$
1,251  F-16




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    Fixed
    Assets    EstimatedUseful Life

June 30,(Years)

2006


2005(In thousands)Land



$
266


$
273Buildings

30


1,775



1,797Equipment

5-7


1,672



1,495Computer equipment

3-5


5,160



4,828Furniture and fixtures

7-10


704



639Computers and equipment under
    capital leases

3-7


626



640Software

3-5


401



448Leasehold improvements

varies


693



527Other

3-10


313



12411,610



10,771Less  accumulated
    depreciation and amortization




(8,481
)


(7,435
)$
3,129


$
3,336     9.
    Accrued
    Expenses    June 30,2006


2005(In thousands)Employee wages, commissions and
    other compensation

$
1,208


$
1,858Employee leave costs


2,356



2,134Employee retirement costs


807



711Professional fees


442



1,518Income and withholding taxes


4,044



2,684Restructuring costs


213



105Warranty


193



120Other


1,011



1,035$
10,274


$
10,165  F-17




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   10.
    Restructuring
    Plans  April
    2006 Plan
    EmployeeSeverance


OtherCosts


Costs


Total(In thousands)Restructuring charge

$
1,104


$
175


$
1,279Cash payments


(986
)


(119
)


(1,105
)Foreign exchange impact


(5
)


3



(2
)Balance at June 30, 2006

$
113


$
59


$
172   October
    2005 Plan
    Employee


LeaseSeverance


Termination


OtherCosts


Costs


Costs


Total(In thousands)Restructuring charge

$
1,313


$
14


$
60


$
1,387Cash payments


(1,320
)


(14
)


(61
)


(1,395
)Foreign exchange impact


7







1



8Balance at June 30, 2006

$



$



$



$
   January
    2004 Plan
   F-18




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   April
    2002 Plan
    LeaseTerminationCosts(In thousands)Balance at June 30, 2005

$
447Cash payments


(103
)Foreign exchange impact


(4
)Balance at June 30, 2006

$
340   11.
    Credit
    Facilities        12.
    Preferred
    Stock    13.
    Common
    Stock     F-19




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   14.
    Share
    Repurchase Program and Treasury Stock      15.
    Stock
    Option and Incentive Plans        Year EndedJune 30, 2006


June 30, 2005


June 30, 2004Weighted





Weighted





WeightedAverage





Average





AverageShares


Exercise Price


Shares


Exercise Price


Shares


Exercise PriceOutstanding at beginning of period


2,487,267


$
10.22



2,634,157


$
9.77



2,433,206


$
9.33Granted


185,529



15.05



337,800



12.20



557,180



10.34Exercised


(415,748
)


7.72



(349,947
)


7.72



(199,709
)


4.83Canceled


(170,497
)


13.95



(134,743
)


12.74



(156,520
)


11.25Outstanding at end of period


2,086,551


$
10.85



2,487,267


$
10.22



2,634,157


$
9.77Options exercisable at end of period


1,667,556


$
10.33



1,733,684


$
10.26



1,423,647



10.54Weighted average fair value of
    options granted in the period





$
5.99






$
7.08






$
7.09  F-20




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Options OutstandingWeighted





Options ExercisableAverage


Weighted





WeightedRemaining


Average





AverageContractual


Exercise





ExerciseRange of Exercise Prices

Shares


Life


Price


Shares


Price$0.36-$5.00


582,644



1.1 years


$
4.61



582,644


$
4.61$5.01-$10.00


352,961



2.5 years



9.09



279,444



8.92$10.01-$15.00


660,152



2.7 years



12.18



464,301



12.21$15.01-$20.00


409,244



2.8 years



16.72



259,617



17.43$20.01-$25.00


65,450



2.3 years



21.74



65,450



21.75$25.01-$30.00


16,100



2.6 years



26.24



16,100



26.242,086,551



2.2 years


$
10.85



1,667,556


$
10.33         Year EndedJune 30,2006(In thousands)Cost of product revenue

$
61Cost of services revenue


105Research and development


346Selling and marketing


525General and administrative


1,133Share-based compensation expense
    before tax


2,170Income tax benefit


(108
)Net compensation expense

$
2,062      F-21




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year EndedJune 30,2006Dividend yield


0
%Expected volatility factor(1)


38.48%-49.16
%Risk-free interest rate(2)


3.92%-5.00
%Expected term (in years)(3)


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.    Year Ended


Year EndedJune 30,


June 30,2005


2004(In thousands,


(In thousands,except per


except pershare data)


share data)Net income as reported

$
6,757


$
2,628Less:Total share-based compensation
    expense determined under fair value based method for all awards,
    net of related tax effects


(3,414
)


(4,438
)Pro forma net income (loss)

$
3,343


$
(1,810
)Net income (loss) per share:Basic  as reported

$
0.63


$
0.26Basic  pro forma

$
0.33


$
(0.18
)Diluted  as reported

$
0.58


$
0.24Diluted  pro forma

$
0.30


$
(0.18
)  F-22




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended


Year EndedJune 30,


June 30,2005


2004Dividend yield


0
%


0
%Volatility


83.5
%


88.8
%Risk-free interest rate


3.5
%


3.1
%Expected term (in years)


4.4



4.7     WeightedAverageNumber of


Grant DateShares


Fair ValueNonvested at June 30, 2005






Granted


94,733


$
15.39Vested






Forfeited


(12,989
)


(15.39
)Nonvested at June 30, 2006


81,744


$
15.39     Employee
    Stock Purchase Plan
      Shares


ShareEnd of Offering Period:

Issued


PriceDecember 2002


21,373


$
6.38June 2003


21,978


$
6.19December 2003


16,575


$
7.51June 2004


12,839


$
9.21December 2004


15,201


$
9.09June 2005


12,856


$
11.02  F-23




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Shareholder
    Rights Plan
    Common
    Stock Reserved for Issuance under its Plans
    16.
    Net
    Income per Common Share    Year Ended June 30,2006


2005


2004(In thousands,except per share data)Net income

$
1,001


$
6,757


$
2,628Weighted average shares used in
    computing net income per common share  basic


11,114



10,761



10,277Effect of dilutive securities:Stock options and restricted stock


703



864



562Weighted average shares used in
    computing net income per common share  diluted


11,817



11,625



10,839Net income per common
    share  basic

$
0.09


$
0.63


$
0.26Net income per common
    share  diluted

$
0.08


$
0.58


$
0.24    F-24




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   17.
    Income
    Taxes    Year Ended June 30,2006


2005


2004(In thousands)Domestic loss

$
(2,507
)

$
(1,048
)

$
(1,642
)Foreign income


5,423



9,470



5,792Income before income taxes

$
2,916


$
8,422


$
4,150     Year Ended June 30,2006


2005


2004(In thousands)Current:Federal

$
498


$



$
118State


11



10



156Foreign


1,027



1,915



998Total current tax expense


1,536



1,925



1,272Deferred:Federal


19



19



75State


3



3



15Foreign


357



(282
)


160Total deferred tax expense


379



(260
)


250Provision for income taxes

$
1,915


$
1,665


$
1,522     Year Ended June 30,2006


2005


2004(In thousands)Income taxes computed at the
    statutory federal rate of 34%

$
992


$
2,863


$
1,411State income taxes, net of federal
    benefit


11



10



156Repatriation of foreign earnings


525







Nondeductible stock option expense


268







Other permanent items


240



604



(9
)Change in valuation allowance


486



(434
)


372Foreign tax rate differential


(634
)


(1,484
)


(404
)Other


27



106



(4
)Provision for income taxes

$
1,915


$
1,665


$
1,522   Repatriation
    of International Earnings
   F-25




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Provision
    for Income Tax
    Undistributed
    Earnings of Foreign Subsidiaries
      June 30,2006


2005(In thousands)Deferred tax assets:Net operating loss carryforwards

$
1,195


$
1,252Foreign tax and other credit
    carryforwards


822



840Accrued expenses not yet
    deductible for tax purposes


1,227



973Other


169



112Gross deferred tax assets


3,413



3,177Valuation allowance on deferred
    tax assets


(2,568
)


(1,967
)Total deferred tax assets


845



1,210Deferred tax liabilities


(798
)


(786
)Net deferred tax asset

$
47


$
424   Net
    Operating Loss and Other Carryforwards
   F-26




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Valuation
    Allowance
    Tax
    Audit
            18.
    Benefit
    Plans  401(k)
    Savings Plan
  U.S.-based
 F-27




---



##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Superannuation
    Plan
    19.
    Contingencies,
    Commitments and Guarantor Arrangements      Year Ended June 30,2006


2005


2004(In thousands)Beginning balance

$
120


$
254


$
42Additional accruals


104



69



72Liabilities assumed in acquisition
    of AMSI (Note 3)










189Settlements made and other
    adjustments


(31
)


(203
)


(49
)Ending balance

$
193


$
120


$
254  F-28




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Lease
    Commitments
    Operating


CapitalYear Ending June 30,

Leases


Leases(In thousands)


(In thousands)2006

$
1,645


$
42007


2,046



62008


1,627



62009


1,208



52010


1,097



Thereafter


1,488



$
9,111


$
21       Purchase
    Commitments
    PurchaseYear Ending June 30,

Commitments(In thousands)2006

$
1,2222007


1192008


62$
1,403   20.
    Segment
    and Geographic Information  Segment
    Information
   F-29




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           Year Ended June 30,2006


2005


2004(In thousands)Revenue:Product revenue:Design Analysis Solutions

$
23,960


$
23,829


$
17,461Manufacturing Solutions


14,255



14,398



8,602Total product revenue


38,215



38,227



26,063Services revenue:Design Analysis Solutions


24,522



23,388



20,449Manufacturing Solutions


2,821



2,803



2,161Total services revenue


27,343



26,191



22,610Total revenue:Design Analysis Solutions


48,482



47,217



37,910Manufacturing Solutions


17,076



17,201



10,763Total revenue

$
65,558


$
64,418


$
48,673Costs and operating
    expenses:Design Analysis Solutions

$
24,085


$
21,057


$
20,177Manufacturing Solutions


20,625



17,850



13,740Unallocated


20,665



18,822



11,803Total costs and operating expenses

$
65,375


$
57,729


$
45,720Segment income (loss) from
    operations:Design Analysis Solutions

$
24,397


$
26,160


$
17,733Manufacturing Solutions


(3,549
)


(649
)


(2,977
)Unallocated


(20,665
)


(18,822
)


(11,803
)Total income from operations

$
183


$
6,689


$
2,953  F-30




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Geographic
    Information
    Fiscal Year Ended June 30,2006


2005


2004(In thousands)Revenue from unaffiliated
    customers:Asia/Australia:Design Analysis Solutions products

$
12,391


$
12,401


$
9,340Manufacturing Solutions products


557



43



52Design Analysis Solutions services


8,980



8,204



6,850Manufacturing Solutions services


41



10



20Total Asia/Australia


21,969



20,658



16,262Americas:Design Analysis Solutions products


3,134



3,485



2,117Manufacturing Solutions products


11,186



12,149



6,311Design Analysis Solutions services


5,899



5,523



5,517Manufacturing Solutions services


2,107



1,776



1,213Total Americas


22,326



22,933



15,158Europe:Design Analysis Solutions products


8,435



7,943



6,004Manufacturing Solutions products


2,512



2,206



2,239Design Analysis Solutions services


9,643



9,661



8,082Manufacturing Solutions services


673



1,017



928Total Europe


21,263



20,827



17,253Consolidated:Design Analysis Solutions products


23,960



23,829



17,461Manufacturing Solutions products


14,255



14,398



8,602Design Analysis Solutions services


24,522



23,388



20,449Manufacturing Solutions services


2,821



2,803



2,161Total consolidated

$
65,558


$
64,418


$
48,673     June 30,2006


2005(In thousands)Fixed assets, net:Asia/Australia

$
1,794


$
1,881Americas


779



953Europe


556



502Total consolidated

$
3,129


$
3,336    F-31




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##### Table of Contents



MOLDFLOW
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   21.
    Selected
    Quarterly Results of Operations (Unaudited)      Quarter EndedJune 30,


Mar. 31,


Dec. 31,


Sep. 30,


June 30,


Mar. 26,


Dec. 25,


Sep. 25,2006


2006


2005


2005


2005


2005


2004


2004(In thousands)Revenue:Product

$
9,896


$
9,503


$
10,082


$
8,734


$
11,251


$
9,487


$
9,562


$
7,927Services


7,231



6,754



6,812



6,546



7,031



6,410



6,695



6,055Total revenue


17,127



16,257



16,894



15,280



18,282



15,897



16,257



13,982Costs and operating expenses:Cost of product revenue


2,526



2,528



2,442



2,570



3,062



2,088



1,875



1,841Cost of services revenue


1,739



1,784



1,705



1,613



1,753



1,642



1,650



1,295Research and development


2,433



2,459



2,195



2,481



2,148



2,160



2,040



1,645Selling and marketing


6,002



5,786



5,867



5,650



6,277



5,650



5,611



4,695General and administrative


2,971



2,684



3,494



3,584



3,562



2,869



3,066



2,510Restructuring charges


1,279







1,387



















Amortization of acquired intangible
    assets


49



49



49



49



65



73



73



79Total costs and operating expenses


16,999



15,290



17,139



15,947



16,867



14,482



14,315



12,065Income from operations (loss)


128



967



(245
)


(667
)


1,415



1,415



1,942



1,917Interest income, net


715



663



631



562



528



405



384



346Other income (loss), net


66



62



53



(19
)


26



86



16



(58
)Income (loss) before income taxes


909



1,692



439



(124
)


1,969



1,906



2,342



2,205Provision for (benefit from) income
    taxes (1)


1,349



172



548



(154
)


611



(139
)


733



460Net income (loss)

$
(440
)

$
1,520


$
(109
)

$
30


$
1,358


$
2,045


$
1,609


$
1,745Net income (loss) per common share:Basic

$
(0.04
)

$
0.14


$
(0.01
)

$



$
0.12


$
0.19


$
0.15


$
0.16Diluted

$
(0.04
)

$
0.13


$
(0.01
)

$



$
0.12


$
0.17


$
0.14


$
0.15     (1)
    
    Our tax provision in our fourth
    quarter of fiscal 2006 was $1.3 million on profit before
    tax of $909,000, which included $525,000 of tax expense to
    repatriate $10.6 million from Australia and $463,000 of tax
    expense related to the use of net operating losses related to
    previous stock option exercises.  22.  Subsequent
    Events (Unaudited)
   F-32




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM               Internal Control 
    Integrated Framework
      F-33




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
           F-34




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.

Title2
.2

Agreement and Plan of Merger by
    and among Moldflow Corp., MF Merger Sub I, Inc., American
    MSI Corp., the Timothy and Deborah Triplett Family Trust,
    Timothy L. Triplett and Deborah A. Triplett, dated
    January 23, 2004. (Previously filed as an exhibit to the
    Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 27, 2003 filed with
    the Securities and Exchange Commission on February 10, 2004
    and incorporated by reference thereto.)3
.1

Third Amended and Restated
    Certificate of Incorporation of the Registrant. (Previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 1, 2000 filed with the
    Securities and Exchange Commission on May 12, 2000 and
    incorporated by reference thereto.)3
.2

Second Amended and Restated
    By-laws of the Registrant. (Previously filed as an exhibit to
    the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 1, 2000 filed with the
    Securities and Exchange Commission on May 12, 2000 and
    incorporated by reference thereto.)3
.3

Certificate of Amendment of Third
    Amended and Restated Certificate of Incorporation. (Previously
    filed as an exhibit to the Companys Annual Report on
    Form 10-K
    for the fiscal year ended June 30, 2002 filed with the
    Securities and Exchange Commission on September 19, 2002
    and incorporated by reference thereto.)3
.4

Certificate of Designations,
    Preferences and Rights of a Series of Preferred Stock of
    Moldflow Corporation classifying and designating the
    Series A Junior Participating Preferred Stock. (Previously
    filed as an exhibit to the Companys Registration Statement
    on
    Form 8-A
    filed with the Securities and Exchange Commission on
    February 3, 2003 and incorporated by reference thereto.)4
.1

Shareholder Rights Agreement,
    dated as of January 29, 2003, between Moldflow Corporation
    and EquiServe Trust Company, as Rights Agent. (Previously filed
    as an exhibit to the Companys Registration Statement on
    Form 8-A
    filed with the Securities and Exchange Commission on
    February 3, 2003 and incorporated by reference thereto.)10
.1

Form of Incentive Stock Option
    Agreement for Executive Officers under the Moldflow Corporation
    2000 Stock Option and Incentive Plan. (Previously filed as an
    exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 25, 2004 filed with
    the Securities and Exchange Commission on November 3, 2004
    and incorporated by reference thereto.)10
.2

Form of Non-Qualified Stock Option
    Agreement for Executive Officers under the Moldflow Corporation
    2000 Stock Option and Incentive Plan. (Previously filed as an
    exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 25, 2004 filed with
    the Securities and Exchange Commission on November 3, 2004
    and incorporated by reference thereto.)10
.3

Form of Non-Qualified Stock Option
    Agreement for Non-Employee Directors under the Moldflow
    Corporation 2000 Stock Option and Incentive Plan. (Previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 25, 2004 filed with
    the Securities and Exchange Commission on November 3, 2004
    and incorporated by reference thereto.)10
.4

Third Amendment to the Moldflow
    Corporation 2000 Stock Option and Incentive Plan. (Previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 27, 2003 filed with
    the Securities and Exchange Commission on February 10, 2004
    and incorporated by reference thereto.)10
.5

Lease between Moldflow Corporation
    and 492 OCP, LLC dated as of January 28, 2005. (Previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q
    filed on February 2, 2005, and incorporated by reference
    thereto.)10
.6

Loan Modification Agreement dated
    as of January 31, 2005 between Moldflow Corporation and
    Silicon Valley Bank. (Previously filed as an exhibit to the
    Companys Quarterly Report on
    Form 10-Q
    filed on February 2, 2005, and incorporated by reference
    thereto.)10
.7

Moldflow Corporation 2000 Stock
    Option and Incentive Plan, as amended. (Previously filed as an
    exhibit to the Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 28, 2002 filed with
    the Securities and Exchange Commission on February 7, 2003
    and incorporated by reference thereto.)10
.8

Form of Incentive Stock Option
    Agreement under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)




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##### Table of Contents



ExhibitNo.

Title10
.9

Form of Non-Qualified Stock Option
    Agreement for Company Employees under the Moldflow Corporation
    2000 Stock Option and Incentive Plan. (Previously filed as an
    exhibit to the Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.10

Moldflow Corporation Employee
    Stock Purchase Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.11

Moldflow Corporation 1997 Equity
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.12

Form of Director Indemnification
    Agreement to be entered into between the Registrant and Each
    Non-employee Director. ** (Previously filed as an exhibit to the
    Companys Registration Statement on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.13

Form of Non-Qualified Stock Option
    Agreement for Non-Employee Directors under the Moldflow
    Corporation 2000 Stock Option and Incentive Plan. ** (Previously
    filed as an exhibit to the Companys Registration Statement
    on
    Form S-1
    (File
    No. 333-95289)
    and incorporated by reference thereto.)10
.14

Loan Agreement as of
    November 13, 2001 between Silicon Valley Bank and Moldflow
    Corporation. (Previously filed as an exhibit to the
    Companys Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended December 29, 2001 filed with
    the Securities and Exchange Commission on February 11, 2002
    and incorporated by reference thereto.)10
.15

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    Kenneth R. Welch.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed July 14, 2005 and incorporated by reference thereto.)10
.16

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    A. Roland Thomas.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005 and incorporated by reference
    thereto.)10
.17

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    Ian M. Pendlebury.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005 and incorporated by reference
    thereto.)10
.18

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    Peter K. Kennedy.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005 and incorporated by reference
    thereto.)10
.19

Amended and Restated Employment
    Agreement, dated July 8, 2005, between the Registrant and
    Lori M. Henderson.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005 and incorporated by reference
    thereto.)10
.20

Amended and Restated Employment
    Agreement dated as of July 8, 2005 between Christopher L.
    Gorgone and Moldflow Corporation.** (Previously filed as an
    exhibit to the Companys Current Report on
    Form 8-K
    filed on July 14, 2005, and incorporated by reference
    thereto.)10
.21

Form of Cash Bonus Plan for
    Certain Executive Officers and Key Employees.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K
    filed on September 29, 2005, and incorporated by reference
    thereto.)10
.22

Form of Restricted Stock Award
    Agreement for Executive Officers under the Moldflow Corporation
    2000 Stock Option and Incentive Plan, except with respect to Ian
    Pendlebury and Peter Kennedy, in which case paragraph 8 has
    been deleted.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on September 29, 2005, and incorporated by reference
    thereto.)10
.23

Amended and Restated Employment
    Agreement dated as of July 8, 2005 between the Registrant
    and Timothy Triplett.** (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on July 14, 2005, and incorporated by reference
    thereto.)10
.24

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
.25

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.)16
.1

Letter Regarding Change in
    Certifying Accountant. (Previously filed as an exhibit to the
    Companys Current Report on
    Form 8-K
    filed on March 10, 2006, and incorporated by reference
    thereto.)




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##### Table of Contents



ExhibitNo.

Title21
.1

Subsidiaries of the Registrant.
    (Filed herewith.)23
.1

Consent of Grant Thornton LLP.
    (Filed herewith.)23
.2

Consent of PricewaterhouseCoopers
    LLP. (Filed herewith.)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.)     **
    
    Management contract or compensatory plan or arrangement required
    to be filed as an exhibit to this form pursuant to
    Item 15(c) of this report.(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.