Exhibit 99.1
ANSYS Delivers Another Quarter of Solid Revenue and Strong Earnings
SOUTHPOINTE, Pa., Nov. 5 /PRNewswire-FirstCall/ -- ANSYS, Inc. (Nasdaq:
ANSS), a global innovator of simulation software and technologies designed to
optimize product development processes, today announced third quarter 2003
results. ANSYS' third quarter and year-to-date GAAP results include:
- Total revenue of $28.0 million, as compared to $21.7 million in the
third quarter of 2002; total revenue of $80.3 million in the first nine
months of 2003 as compared to $65.7 million for the nine months ended
September 30, 2002;
- Diluted earnings per share of $0.33 as compared to $0.26 for the third
quarter of 2002; diluted earnings per share of $0.89 through
September 30, 2003 as compared to $0.81 for the first nine months of
2002; and
- Cash flows from operations of $7.1 million in the third quarter of 2003
and $28.7 million in the first nine months of 2003.
Excluding the adverse impact on reported software license revenue of
purchase accounting adjustments related to the Company's February 2003
acquisition of CFX and acquisition-related amortization (see discussion below),
ANSYS' third quarter and year-to-date adjusted (non-GAAP) results include:
- Total adjusted revenue of $28.9 million, as compared to $21.7 million
in the third quarter of 2002; total adjusted revenue of $82.7 million
in the first nine months of 2003 as compared to $65.7 million for the
nine months ended September 30, 2002;
- An overall adjusted operating profit margin, excluding total
amortization, of 34% as compared to 29% for the third quarter of 2002;
and an overall adjusted operating profit margin, excluding total
amortization, of 31% as compared to 30% for the first nine months of
2002; and
- Adjusted diluted earnings per share of $0.41 as compared to $0.28 for
the third quarter of 2002; adjusted diluted earnings per share of $1.10
compared to $0.86 for the nine month period ended September 30, 2002.
ANSYS President and CEO, Jim Cashman, commenting on the current quarter's
solid business performance, said, "The third quarter was a very positive quarter
for us on a number of important initiatives. We continued to make tremendous
strides in integrating our recently acquired CFX product line, which contributed
to our ability to post record third quarter revenue and earnings results.
Additionally, we made important progress in advancing our leadership in
technology, which we believe has been a key driver to both the continued
penetration into our extensive installed base, as well as our ability to expand
into new markets."
Cashman added, "While we continue to focus on improving our sales
productivity and execution in certain geographic regions, we believe that our
financial results, coupled with our technology and market leadership, provide us
with a strong platform from which we can continue to grow our business."
The adjusted results highlighted above represent non-GAAP (Generally
Accepted Accounting Principles) financial measures. A reconciliation of these
measures to the appropriate GAAP measures is included in the condensed financial
statements included in this release.
Adjustments to Reported GAAP Financial Results
- Purchase Accounting Adjustment for Acquired Deferred Revenue:
As announced February 26, 2003, ANSYS acquired CFX for approximately $22
million in cash. In accordance with the fair value provisions of EITF 01-3
"Accounting in a Business Combination for Deferred Revenue of an Acquiree,"
acquired deferred software license revenue of approximately $4.8 million was
recorded on the opening balance sheet, which was approximately $3.4 million
lower than the historical carrying value. Although this purchase accounting
requirement has no impact on the Company's business or cash flow, it adversely
impacts the Company's reported GAAP software license revenue for the first
twelve months post-acquisition. In order to provide investors with financial
information that facilitates comparison of both historical and future results,
the Company has and will continue to provide adjusted financial information,
which excludes the impact of the purchase accounting adjustment, through this
twelve-month period.
- Acquisition Related Amortization:
As previously discussed, the Company completed its recent acquisition of CFX
in February 2003. Prior to that, the Company also acquired CADOE S.A. and ICEM
CFD Engineering in November 2001 and August 2000, respectively. These
acquisitions have all been accounted for as purchases, resulting in the
recording of a significant amount of goodwill and identifiable intangible
assets. As a result of the amortization associated with intangible assets
related to these acquisitions, ANSYS' quarterly and year-to-date financial
results are not comparable with prior periods.
To enable investors and other interested parties to compare 2003 financial
results to historical and future periods, ANSYS is providing its 2003 third
quarter and year-to-date reported GAAP results as well as financial results that
have been adjusted for the impact of the items described above.
Third Quarter 2003 and Nine Months Ended September 30, 2003 Reported GAAP
Results
ANSYS reported net income for the third quarter of $5.4 million, or $0.33
diluted earnings per share, based on 16.2 million weighted average shares
outstanding. For the quarter ended September 30, 2002, ANSYS reported net income
of $4.1 million, or $0.26 diluted earnings per share, based on 15.5 million
weighted average shares outstanding. For the nine months ended September 30,
2003, ANSYS reported net income of $14.1 million, or diluted earnings per share
of $0.89, based on 15.8 million weighted average shares outstanding. For the
nine months ended September 30, 2002, ANSYS reported net income of $12.7
million, or diluted earnings per share of $0.81, based on 15.7 million weighted
average shares outstanding. Cash and short-term investments at September 30,
2003 totaled $72.3 million and ANSYS remains debt free.
Innovative Products Launched
ANSYS continued its tradition of introducing innovative technologies
designed to meet the ever-expanding needs of its customers and the diverse
markets that it serves. The ability to model and simulate multiphysics-based
systems and their manufacturing and operating conditions in the same familiar
and unified graphical user interface has significant value to our customers in
terms of simulation accuracy and reliability, time to market, cost, quality and
innovations. These current product releases are highlighted by:
Continued Technological Leadership:
- Seamless integration of ANSYS multiphysics capabilities and CFX CFD
technologies allows, for the first time, customers' multiple
disciplinary development teams to collaborate and work together. This
unique attribute will benefit customers from various complex product
industries including aerospace, automotive, power generation and
electronics.
- ANSYS' new Multi-field solver is a true advance in open systems
simulation. This powerful solver allows customers to utilize
engineering experts throughout their company, and even within their
supply chains, each simulating their own design issues, to combine the
results and gain a complete understanding of the overall system
effects.
- High performance solution algorithms allow complex simulation of
complete products and systems to be performed in minutes and hours
rather than days.
- Component mode synthesis technology allows larger sized products
(such as planes and ships) to be divided into smaller and manageable
pieces that can be modeled and simulated independently by many
engineering groups on small to medium sized computers. This technology
also enables the combining of the behavior of these smaller pieces to
yield the whole system response.
Leveraging Legacy Data to Spur Product Innovation:
- Legacy technologies such as FE Modeler and Interface for NASTRAN
allow customers to easily migrate to ANSYS solutions while protecting
their investment in legacy product data, knowledge and intellectual
property.
- Parametric modeling technology (ANSYS ParaMesh) allows legacy data to
be immediately utilized in rapid "what-if" simulations with full
parametric optimizations, without recreating CAD geometry, and allows
engineers to quickly optimize designs based upon product performance
requirements.
ANSYS will hold a conference call at 10:30 A.M. Eastern Time on November 5,
2003 to discuss third quarter results as well as to provide guidance regarding
fourth quarter business prospects. The dial in number is 800-857-7001 and the
passcode is "ANSYS". A replay will be available until November 7, 2003 by
dialing 800-756-9736. The conference call will be webcast live and can be
accessed, along with other financial information, on ANSYS' website, located at
www.ansys.com/newsrooms/investor.htm .
About ANSYS, Inc.
ANSYS, Inc., founded in 1970, develops and globally markets engineering
simulation software and technologies widely used by engineers and designers
across a broad spectrum of industries. ANSYS focuses on the development of open
and flexible solutions that enable users to analyze designs directly on the
desktop, providing a common platform for fast, efficient and cost-conscious
product development, from design concept to final-stage testing and validation.
Headquartered in Canonsburg, Pennsylvania U.S.A. with approximately 25 strategic
sales locations throughout the world, ANSYS, Inc. employs more than 600 people
and distributes its products through a network of channel partners in 40
countries. Visit www.ansys.com for more information.
Some matters discussed in this news release constitute forward-looking
statements under the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties. These
forward looking statements include statements with respect to our integrations
of CFX, our ability to continue to penetrate new markets and our installed base,
our ability to improve sales productivity, our ability to continue to grow our
business and our ability to maintain technological leadership.
All forward looking statements in this press release are subject to risks
and uncertainties, such as the risk of a general economic downturn in one or
more of ANSYS' primary geographic markets, the risk that ANSYS has overestimated
its ability to maintain growth and profitability and control costs in the
current economic environment, the risk that the CFX business will not perform
consistent with operations or that ANSYS will experience unforeseen difficulties
integrating this newly-acquired business, the risk that ANSYS' sales will be
adversely impacted at a later stage in the current economic downturn,
uncertainties regarding the demand for ANSYS' products and services in future
periods, the risk that ANSYS has overestimated the strength of the demand among
its customers for its products in an unstable economy, risks of problems arising
from customer contract cancellations, uncertainties regarding customer
acceptance of new products, the risk that ongoing pressure on customer spending
will not allow investment in sales, technology innovation and development of key
strategic partnerships, the risk that ANSYS' strategic plan will not increase
shareholder value over the long run, the risk that ANSYS' operating results will
be adversely affected by possible delays in developing, completing, or shipping
new or enhanced products, risks that enhancements to the company's products
including those described above may not produce anticipated benefits, the risk
that changes in the price of our common stock or the existence of competing uses
for available cash will affect our willingness to continue the stock repurchase
program, uncertainties regarding fluctuations in quarterly results, including
uncertainties regarding the timing of orders from significant customers and
regional economies, and other factors that are detailed from time to time in
reports filed by ANSYS, Inc. with the Securities and Exchange Commission,
including ANSYS, Inc.'s 2002 Annual Report and Form 10-K and the most recent
quarterly report on Form 10-Q. ANSYS, Inc. is committed to providing the most
open and flexible analysis solutions to meet customer requirements for
engineering software in today's competitive marketplace. ANSYS, Inc. partners
with leading design software suppliers to develop state-of-the-art
CAD-integrated products. ANSYS and its global network of ANSYS Support
Distributors provide sales, support and training for customers. Information
about ANSYS, Inc. and its products can be found on the Worldwide Web at
www.ansys.com.
ANSYS, DesignSpace, ANSYS DesignModeler, ANSYS DesignXplorer VT, ANSYS
DesignXplorer, ANSYS ProFEA, ANSYS Emax, ANSYS Workbench environment,
Multi-field, CFX, AI*Environment, AI*NASTRAN, CADOE S.A. and any and all ANSYS,
Inc. product names referenced on any media, manual or the like, are registered
trademarks or trademarks of subsidiaries of ANSYS, Inc. located in the United
States or other countries. NASTRAN is a registered trademark of the National
Aeronautics Space Administration. All other product names mentioned are
trademarks or registered trademarks of their respective manufacturers.
Reconciliation of Non-GAAP Measures
This earnings release contains non-GAAP financial measures. For purposes of
Regulation G, a non-GAAP financial measure is a numerical measure of a
registrant's historical or future financial performance, financial position or
cash flows that excludes amounts, or is subject to adjustments that have the
effect of excluding amounts, that are included in the most directly comparable
measure calculated and presented in accordance with GAAP in the statement of
income, balance sheet or statement of cash flows of the issuer; or includes
amounts, or is subject to adjustments that have the effect of including amounts,
that are excluded from the most directly comparable measure so calculated and
presented. In this regard, GAAP refers to generally accepted accounting
principles in the United States. Pursuant to the requirements of Regulation G,
the Company has provided a reconciliation of the adjusted (non-GAAP) financial
measures to the most directly comparable GAAP financial measures.
Adjusted software license revenue, adjusted operating profit margin,
adjusted net income and adjusted diluted earnings per share are presented in
this earnings release because management uses this information in evaluating the
results of the continuing operations of business and believes that this
information provides the users of the financial statements a valuable insight
into the operating results. Additionally, management believes that it is in the
best interest of its investors to provide financial information that will
facilitate comparison of both historical and future results.
ANSYS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2003 2002 2003 2002
Revenue:
Software licenses $14,053 $11,017 $40,457 $34,125
Maintenance and
service 13,985 10,728 39,824 31,619
Total revenue 28,038 21,745 80,281 65,744
Cost of sales:
Software licenses 1,226 904 3,873 2,856
Amortization of
software and acquired
technologies 871 363 2,302 1,100
Maintenance and
service 3,199 2,117 9,782 5,825
Total cost of sales 5,296 3,384 15,957 9,781
Gross profit 22,742 18,361 64,324 55,963
Operating expenses:
Selling and marketing 5,646 4,690 17,254 15,092
Research and
development 5,879 5,155 17,609 14,912
Amortization 276 194 774 624
General and
administrative 3,022 2,522 8,798 7,562
Total operating
expenses 14,823 12,561 44,435 38,190
Operating income 7,919 5,800 19,889 17,773
Other (loss) income (808) 32 498 526
Income before income
tax provision 7,111 5,832 20,387 18,299
Income tax provision 1,750 1,750 6,275 5,609
Net income $5,361 $4,082 $14,112 $ 12,690
Earnings per share
- basic:
Basic earnings
per share $0.36 $0.28 $0.95 $0.87
Weighted average
shares - basic 15,106 14,578 14,864 14,612
Earnings per share
- diluted:
Diluted earnings
per share $0.33 $0.26 $0.89 $0.81
Weighted average
shares - diluted 16,236 15,475 15,804 15,677
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended September 30, 2003
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $14,053 $885(a) $14,938
Maintenance and service 13,985 - 13,985
Total revenue 28,038 885 28,923
Cost of sales:
Software licenses 1,226 - 1,226
Amortization of
software and acquired
technologies 871 (747)(b) 124
Maintenance and service 3,199 - 3,199
Total cost of sales 5,296 (747) 4,549
Gross profit 22,742 1,632 24,374
Operating expenses:
Selling and marketing 5,646 - 5,646
Research and development 5,879 - 5,879
Amortization 276 (276)(b) -
General and administrative 3,022 - 3,022
Total operating expenses 14,823 (276) 14,547
Operating income 7,919 1,908 9,827
Other (loss) income (808) - (808)
Income before income
tax provision 7,111 1,908 9,019
Income tax provision 1,750 668(c) 2,418
Net income $5,361 $1,240 $6,601
Earnings per share - basic:
Basic earnings per share $0.36 $0.44
Weighted average
shares - basic 15,106 15,106
Earnings per share - diluted:
Diluted earnings per share $0.33 $0.41
Weighted average
shares - diluted 16,236 16,236
(a) Amount represents the revenue not reported during the period as a
result of the purchase accounting adjustment associated with EITF
01-3, "Accounting in a Business Combination for Deferred Revenue of
an Acquiree."
(b) Amount represents amortization expense associated with intangible
assets acquired in business acquisitions, including amounts primarily
related to acquired software, customer list and non-compete
agreements.
(c) Amount represents the income tax impact of the revenue and
amortization expense adjustments referred to in (a) and (b) above.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended September 30, 2002
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $11,017 $ - $11,017
Maintenance and service 10,728 - 10,728
Total revenue 21,745 - 21,745
Cost of sales:
Software licenses 904 - 904
Amortization of software and
acquired technologies 363 (241)(a) 122
Maintenance and service 2,117 - 2,117
Total cost of sales 3,384 (241) 3,143
Gross profit 18,361 241 18,602
Operating expenses:
Selling and marketing 4,690 - 4,690
Research and development 5,155 - 5,155
Amortization 194 (194)(a) -
General and administrative 2,522 - 2,522
Total operating expenses 12,561 (194) 12,367
Operating income 5,800 435 6,235
Other income 32 - 32
Income before income
tax provision 5,832 435 6,267
Income tax provision 1,750 152(b) 1,902
Net income $4,082 $283 $4,365
Earnings per share - basic:
Basic earnings per share $0.28 $0.30
Weighted average
shares - basic 14,578 14,578
Earnings per share - diluted:
Diluted earnings per share $0.26 $0.28
Weighted average
shares - diluted 15,475 15,475
(a) Amount represents amortization expense associated with intangible
assets acquired in business acquisitions, including amounts
primarily related to acquired software, customer list and
non-compete agreements.
(b) Amount represents the income tax impact of the amortization expense
adjustment referred to in (a) above.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the nine months ended September 30, 2003
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $40,457 $2,455(a) $42,912
Maintenance and service 39,824 - 39,824
Total revenue 80,281 2,455 82,736
Cost of sales:
Software licenses 3,873 - 3,873
Amortization of software and
acquired technologies 2,302 (1,825)(b) 477
Maintenance and service 9,782 - 9,782
Total cost of sales 15,957 (1,825) 14,132
Gross profit 64,324 4,280 68,604
Operating expenses:
Selling and marketing 17,254 - 17,254
Research and development 17,609 - 17,609
Amortization 774 (774)(b) -
General and administrative 8,798 - 8,798
Total operating expenses 44,435 (774) 43,661
Operating income 19,889 5,054 24,943
Other income 498 - 498
Income before income
tax provision 20,387 5,054 25,441
Income tax provision 6,275 1,769(c) 8,044
Net income $14,112 $3,285 $17,397
Earnings per share - basic:
Basic earnings per share $0.95 $1.17
Weighted average
shares - basic 14,864 14,864
Earnings per share - diluted:
Diluted earnings per share $0.89 $1.10
Weighted average
shares - diluted 15,804 15,804
(a) Amount represents the revenue not reported during the period as a
result of the purchase accounting adjustment associated with
EITF 01-3, "Accounting in a Business Combination for Deferred
Revenue of an Acquiree."
(b) Amount represents amortization expense associated with intangible
assets acquired in business acquisitions, including amounts
primarily related to acquired software, customer list and
non-compete agreements.
(c) Amount represents the income tax impact of the revenue and
amortization expense adjustments referred to in (a) and (b) above.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the nine months ended September 30, 2002
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $34,125 $ - $34,125
Maintenance and service 31,619 - 31,619
Total revenue 65,744 - 65,744
Cost of sales:
Software licenses 2,856 - 2,856
Amortization of software and
acquired technologies 1,100 (682)(a) 418
Maintenance and service 5,825 - 5,825
Total cost of sales 9,781 (682) 9,099
Gross profit 55,963 682 56,645
Operating expenses:
Selling and marketing 15,092 - 15,092
Research and development 14,912 - 14,912
Amortization 624 (624)(a) -
General and administrative 7,562 - 7,562
Total operating expenses 38,190 (624) 37,566
Operating income 17,773 1,306 19,079
Other income 526 - 526
Income before income tax
provision 18,299 1,306 19,605
Income tax provision 5,609 457(b) 6,066
Net income $12,690 $849 $13,539
Earnings per share - basic:
Basic earnings per share $0.87 $0.93
Weighted average shares
- basic 14,612 14,612
Earnings per share - diluted:
Diluted earnings per share $0.81 $0.86
Weighted average shares
- diluted 15,677 15,677
(a) Amount represents amortization expense associated with intangible
assets acquired in business acquisitions, including amounts primarily
related to acquired software, customer list and non-compete
agreements.
(b) Amount represents the income tax impact of the amortization expense
adjustment referred to in (a) above.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
September 30, December 31,
2003 2002
ASSETS:
Cash & short-term investments $72,270 $61,132
Accounts receivable, net 16,034 15,875
Other assets 74,141 49,994
Total assets $162,445 $127,001
LIABILITIES & STOCKHOLDERS' EQUITY:
Current liabilities $45,244 $35,608
Stockholders' equity 117,201 91,393
Total liabilities & stockholders' equity $162,445 $127,001
SOURCE ANSYS, Inc.
-0- 11/05/2003
/CONTACT: Lisa M. O'Connor, Treasurer of ANSYS, Inc., +1-724-514-1782/
/First Call Analyst: /
/FCMN Contact: /
/Web site: http://www.ansys.com
http://www.ansys.com/newsrooms/investor.htm/
(ANSS)
CO: ANSYS, Inc.
ST: Pennsylvania
IN: CPR
SU: ERN CCA MAV