John Arnold Ansoft Corporation TEL: 412.261.3200 FAX: 412.471.9427 EMAIL:arnold@ansoft.com
ANSOFT CORPORATION THIRD QUARTER EARNINGS INCREASE 115%
PITTSBURGH, PA – Feb. 16, 2005 – Ansoft Corporation (NASDAQ: ANST) today announced financial results for its third quarter of fiscal 2005 ended January 31, 2005.
Net income for the third quarter was $3.0 million, or $0.23 per diluted share, representing a 115% increase when compared to net income of $1.4 million, or $0.11 per diluted share in the previous fiscal year’s third quarter. On a generally accepted accounting principles (GAAP) basis, net income for the third quarter was $2.8 million, or $0.21 per diluted share, compared to GAAP net income of $941,000, or $0.07 per diluted share in the previous fiscal year’s third quarter.
Revenue for the third quarter totaled $17.4 million, an increase of 24% compared to $14 million reported in the previous fiscal year’s third quarter.
“We are pleased to report that our earnings for the third quarter have more than doubled on continued revenue growth in our domestic and international markets,” said Nicholas Csendes, Ansoft’s President and CEO. “For the fourth quarter, we anticipate record revenue and earnings.”
Pro forma results represent non-GAAP financial measures and exclude the impact of amortization of intangible assets. A reconciliation of these amounts to the appropriate GAAP amounts, for the three and nine months ended January 31 is included with this press release.
Ansoft is a leading developer of high-performance electronic design automation (EDA) software. Engineers use Ansoft software to design state-of-the-art electronic products, such as cellular phones, Internet-access devices, broadband networking components and systems, integrated circuits (ICs), printed circuit boards (PCBs), automotive electronic systems and power electronics. Ansoft markets its products worldwide through its own direct sales force and has comprehensive customer-support and training offices throughout North America, Asia and Europe.
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially, including, but not necessarily limited to, management’s ability to forecast revenues and control expenses and the size, timing and structure of significant licenses.
For further information regarding risks and uncertainties associated with Ansoft’s business, please refer to the “Management’s Discussion and analysis of Financial Condition and Results of Operations” section of Ansoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained at Ansoft’s website atwww.ansoft.com/about/investor/index.cfm.
All information in this release is as of February 16, 2005. Ansoft undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.
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Ansoft – Page 2
ANSOFT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (unaudited)
Three months ended January 31,
Nine months ended January 31,
2005
2004
2005
2004
Revenue
License
$
10,182
$
8,024
$
25,012
$
20,258
Service and other
7,198
5,958
20,992
16,633
Total revenue
17,380
13,982
46,004
36,891
Costs of revenue
License
141
171
363
477
Service and other
355
285
1,015
805
Total cost of revenue
496
456
1,378
1,282
Gross profit
16,884
13,526
44,626
35,609
Operating Expenses
Sales and marketing
7,424
6,803
22,522
19,462
Research and development
4,204
3,806
12,230
11,402
General and administrative
1,199
1,148
3,592
3,445
Amortization
415
761
1,208
2,379
Total operating expenses
13,242
12,518
39,552
36,688
Income (loss) from operations
3,642
1,008
5,074
(1,079
)
Net realized gain on sale of securities
-
-
732
-
Other income, net
374
247
975
715
Income (loss) before income taxes
4,016
1,255
6,781
(364
)
Income tax expense (benefit)
1,232
314
2,076
(90
)
Net income (loss)
$
2,784
$
941
$
4,705
$
(274
)
Net income (loss) per share
Basic
$
0.24
$
0.08
$
0.41
$
(0.02
)
Diluted
$
0.21
$
0.07
$
0.35
$
(0.02
)
Weighted average shares used in calculation
Basic
11,490
11,640
11,574
11,650
Diluted
13,390
13,306
13,342
11,650
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Ansoft – Page 3
ANSOFT CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited)
January 31,
April 30,
2005
2004
Assets
Current assets
Cash and cash equivalents
$
7,357
$
15,218
Accounts receivable, net
12,087
10,179
Deferred income taxes
657
343
Prepaid expenses and other assets
1,115
675
Total current assets
21,216
26,415
Equipment and furniture
3,186
3,598
Marketable securities
25,888
25,502
Other assets
151
383
Deferred income taxes
5,085
5,158
Goodwill
1,239
1,239
Intangible assets
4,211
5,341
Total assets
$
60,976
$
67,636
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses
$
3,298
$
4,015
Short term line of credit
2,000
—
Deferred revenue
15,410
11,935
Total current liabilities
20,708
15,950
Long term line of credit
—
10,000
Total liabilities
20,708
25,950
Stockholders’ equity
Preferred stock
—
—
Common stock
135
129
Additional paid-in capital
64,223
58,562
Treasury stock
(20,533
)
(9,090
)
Accumulated other comprehensive income
344
691
Accumulated deficit
(3,901
)
(8,606
)
Total stockholders’ equity
40,268
41,686
Total liabilities and stockholders’ equity
$
60,976
$
67,636
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Ansoft – Page 4
ANSOFT CORPORATION RECONCILIATION OF GAAP NET INCOME (LOSS) TO PRO FORMA NET INCOME (In thousands, except per share amounts) (unaudited)
Pursuant to the requirement of Regulation G, the Company has provided a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. These measures differ from GAAP in that they exclude the amortization of intangible assets. The Company has provided these measurements in addition to GAAP financial results because it believes they provide a consistent basis for comparison between periods that is not influenced by certain non-cash expenses and therefore are helpful to understanding the Company’s underlying operational results. These same measures are used by management when evaluating the continuing operating results of the Company.
Three months ended
Nine months ended
January 31,
January 31,
2005
2004
2005
2004
GAAP net income (loss)
$
2,784
$
941
$
4,705
$
(274
)
Amortization of intangibles
257
472
749
1,475
Pro forma net income
$
3,041
$
1,413
$
5,454
$
1,210
Pro forma net income per diluted common share
$
0.23
$
0.11
$
0.41
$
0.10
Weighted average diluted shares used in calculation
13,390
13,306
13,342
11,650
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