EXHIBIT 13.1
1996 ANNUAL REPORT TO STOCKHOLDERS
FINANCIAL Highlights
Year Ended December 31,
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Pro Forma Predecessor Predecessor
The Company The Company Combined/(1)/ Company Company
(in thousands, except per share data) 1996 1995 1994 1993 1992
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Revenue $47,066 $ 39,616 $32,823 $31,604 $30,458
Operating income 3,674 1,360 2,307 7,648 9,703
Net income (loss) 1,304 (1,580) 257 8,120 10,472
Net income (loss) per share after
extraordinary item .07 (.17) -- -- --
Weighted average number
of common and common
equivalent shares outstanding 15,087 12,262 -- -- --
Total assets $43,431 $ 42,921 $44,669 $26,205 $32,719
Working capital 14,691 3,196 1,822 16,135 13,999
Long-term obligations -- 33,204 37,696 3,401 2,694
Redeemable preferred stock -- 4,892 4,447 -- --
Stockholders' equity 32,974 (10,028) (7,985) 19,515 25,919
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/(1)/ The results of operations of the Predecessor Company for the two and one-
half months ended March 13, 1994 have been combined with the results of
operations of the Company for the nine and one-half months ended December
31, 1994 by adding corresponding items without adjustment. This
computation, which is reflected as pro forma combined for 1994, was done
to permit useful comparison between the years presented.
[GRAPH]
A bar chart entitled "Total Revenues (in millions of dollars)" at the bottom
left of page 1 of the Annual Report shows that for the fiscal years 1992,
1993, 1994, 1995 and 1996 (shown below each bar) the Company had total revenue
(shown above each bar) in the respective amounts provided in the table entitled
"Financial Highlights" on page 1 of the Annual Report.
ANSYS, Inc. 1
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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Overview
ANSYS, Inc. (the "Company") is a leading international supplier of analysis and
engineering software for optimizing the design of new products. The Company is
committed to providing the most open and flexible analysis solutions to suit
customer requirements for engineering software in today's competitive
marketplace. In addition, the Company partners with leading design software
suppliers to develop state-of-the-art computer-aided design ("CAD") integrated
products. A global network of ANSYS Support Distributors ("ASDs") provides
sales, support and training for customers. Additionally, the Company distributes
its ANSYS/AutoFEA(TM) product through its global network of ASDs as well as a
network of independent distributors and dealers (value-added resellers or
"VARs") who support sales of ANSYS/AutoFEA(TM) to end users throughout the
world. The following discussion should be read in conjunction with the audited
consolidated financial statements and notes thereto included elsewhere in this
report.
On March 14, 1994, the Company acquired substantially all of the assets of
Swanson Analysis Systems, Inc. ("Swanson Analysis") for approximately $48.0
million in cash (the "1994 Acquisition"). The 1994 Acquisition was funded
through the incurrence of $28.0 million of senior secured indebtedness (the
"1994 Loan") and $15.0 million of Subordinated Notes (the "Subordinated Notes")
and the issuance of $4.0 million of 10% Redeemable Preferred Stock (the
"Redeemable Preferred Stock") and approximately $1.0 million of Common Stock.
The indebtedness and preferred stock issued to finance the 1994 Acquisition were
repaid and redeemed with a portion of the net proceeds from the Company's
initial public offering, which was effective June 20, 1996.
For purposes of the following discussions and analysis, the results of
operations of Swanson Analysis for the two and one-half months ended March 13,
1994 have been combined with the results of operations of the Company for the
nine and one-half months ended December 31, 1994, by adding corresponding items
without adjustment. This computation, which is reflected as pro forma combined
for 1994, was done to permit useful comparison between the results for 1996,
1995 and 1994.
Year Ended December 31,
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The The Pro Forma
Company Company Combined
(in thousands) 1996 1995 1994
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Revenue:
Software licenses $37,013 $32,604 $28,294
Maintenance and service 10,053 7,012 4,529
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Total revenue 47,066 39,616 32,823
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Cost of sales:
Software licenses 3,051 3,331 3,795
Maintenance and service 2,337 1,572 893
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Total cost of sales 5,388 4,903 4,688
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Gross profit 41,678 34,713 28,135
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Operating expenses:
Selling and marketing 9,722 7,526 4,509
Research and development 9,796 8,329 6,759
Amortization 10,774 10,641 8,720
General and administrative 7,712 6,857 5,840
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Total operating expenses 38,004 33,353 25,828
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Operating income 3,674 1,360 2,307
Interest expense (1,669) (3,983) (3,153)
Other income 611 250 186
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Income (loss) before
income taxes 2,616 (2,373) (660)
Income tax provision (benefit) 969 (793) (917)
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Net income (loss) before
extraordinary item 1,647 (1,580) 257
Extraordinary item, net (343) -- --
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Net income (loss) $ 1,304 $(1,580) $ 257
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Results of Operations
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995
Revenue. The Company's revenue increased 18.8% for 1996 to $47.1 million from
$39.6 million for 1995. This increase was attributable principally to increased
domestic and international sales of paid-up licenses and increased maintenance
and service revenue, both of which resulted primarily from the Company's
increased marketing emphasis, market acceptance of new product releases and
broader customer usage of maintenance and support services in response to
accelerated frequency of product releases and the Company's increased emphasis
on marketing its maintenance services.
14 ANSYS, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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Software license revenue increased 13.5% for 1996 to $37.0 million from $32.6
million for 1995, resulting principally from increased sales of paid-up licenses
in domestic and international markets. Revenue from sales of paid-up licenses
increased 35.2% for 1996 to $19.6 million from $14.5 million for 1995. The
Company's paid-up license revenue reflected recognition of substantial revenue
from several large contracts that were formalized during 1996 from customers
such as General Electric, 3M, Pratt & Whitney and Fiat Avio. The Company
believes that large contracts of this type may reflect an increasing demand for
enterprise-wide software solutions from certain of the Company's customers,
which, if continued, may increase the volatility of the Company's revenues and
profit from period to period. The Company also experienced a 3.9% decrease in
lease license revenue to $17.4 million for 1996 from $18.1 million for 1995.
This decrease was attributable to an increase in noncancellable annual leases,
for which a portion of the annual license fee is recognized as paid-up revenue
upon inception of the lease. The remaining portion is recognized as maintenance
revenue ratably over the remaining lease period. Additionally, the decrease is
partially attributable to the conversion of certain lease licenses to paid-up
licenses in 1996. Maintenance and service revenue increased 43.4% for 1996 to
$10.1 million from $7.0 million for 1995, as a result of a substantial increase
in the sale of paid-up licenses, reduction in the warranty period, and broader
customer usage of maintenance and support services.
Of the Company's total revenue for 1996, approximately 50.6% and 49.4%,
respectively, were attributable to domestic and international sales, as compared
to 47.3% and 52.7%, respectively, for 1995.
Cost of Sales and Gross Profit. The Company's total cost of sales increased 9.9%
to $5.4 million for 1996 from $4.9 million for 1995, representing 11.4% and
12.4% of total revenue, respectively. The Company's cost of sales for software
license revenue decreased 8.4% for 1996 to $3.1 million, or 8.2% of software
license revenue, from $3.3 million, or 10.2% of software license revenue, for
1995. The decrease was due primarily to a reduction of expenses through lower
headcount, cost controls and implementation of a more efficient multi-platform
development environment for the Company's product releases and was partially
offset by increased royalty fees. The Company's cost of sales for maintenance
and service revenue was $2.3 million and $1.6 million, or 23.2% and 22.4% of
maintenance and service revenue, for 1996 and 1995, respectively. This 48.7%
increase in 1996 compared to 1995 reflects an increase in headcount, consulting
fees and royalties.
As a result of the foregoing, the Company's gross profit increased 20.1% to
$41.7 million for 1996 from $34.7 million for 1995.
Selling and Marketing. Selling and marketing expenses increased 29.2% for 1996
to $9.7 million, or 20.7% of total revenue, from $7.5 million, or 19.0% of total
revenue, for 1995. This planned growth was attributable principally to increased
personnel costs, including costs associated with increased headcount and
compensation expenses related to building a sales and marketing organization, as
well as increased commissions associated with increased revenue and increased
advertising costs.
Research and Development. Research and development expenses increased 17.6% for
1996 to $9.8 million, or 20.8% of total revenue, from $8.3 million, or 21.0% of
total revenue, for 1995. This increase resulted primarily from employment of
additional staff and independent contractors to develop and enhance the
Company's products, including a dedicated team working on the development of the
Company's DesignSpace(TM) product, costs associated with quality assurance and
additional depreciation expense related to equipment purchases made to implement
and enhance a multi-platform development environment.
Amortization. Amortization expense was $10.8 million in 1996 and $10.6 million
in 1995. This amortization expense resulted principally from the 1994
Acquisition and relates to intangible assets, including goodwill, which are
being amortized from the date of the 1994 Acquisition, March 14, 1994. The
unamortized portion of the goodwill and capitalized software acquired in
connection with the 1994 Acquisition will be fully amortized in the first
quarter of 1997.
General and Administrative. General and administrative expenses increased 12.5%
for 1996 to $7.7 million, or 16.4% of total revenue, from $6.9 million, or 17.3%
of total revenue, for 1995. The increase is attributable to the addition of
administrative support services, such as computerized order fulfillment and
corporate-wide information technology systems, to support the Company's future
operations. In addition, the Company also incurred expenses related to
increasing the allowance for bad debt, as well as the addition of personnel, and
accounting and legal costs to support the operations of a publicly owned
company.
Interest. Interest expense decreased 58.1% for 1996 to $1.7 million from $4.0
million for 1995. This decrease was attributable to the early repayment of the
1994 Loan and the Subordinated Notes with the net proceeds from the initial
public offering in June 1996.
ANSYS, Inc. 15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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Other Income. Other income increased for 1996 to $611,000 as compared to
$250,000 for 1995. Approximately $331,000 of this increase was related to the
repayment of a note receivable and related past-due interest, which had
previously been determined by the Company to be uncollectible.
Income Tax Provision (Benefit). The Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes." The Company's effective rate of taxation was 37.0% for 1996,
as compared to 33.4% for 1995. These percentages are less than the federal and
state combined statutory rate of approximately 39.0% due primarily to the
utilization of research and experimentation credits.
Net Income (Loss). The Company's net income before extraordinary item in 1996
was $1.6 million compared to a net loss of $1.6 million in 1995. The net income
including the extraordinary item in 1996 was $1.3 million. Net income per share
increased to $.07 in 1996 as compared to a net loss per share of ($.17) in 1995.
The increase in net income per share is attributable to the increase in net
income, as well as the elimination of the preferred stock dividends due to the
redemption of the Redeemable Preferred Stock, which occurred at the time of the
Company's initial public offering in June 1996. The weighted average common and
common equivalent shares used in computing per common shares amounts have
increased to 15,087,000 in 1996 from 12,262,000 in 1995, primarily as a result
of the initial public offering.
Year Ended December 31, 1995 Compared to Pro Forma Combined Year Ended December
31, 1994
Revenue. The Company's revenue increased 20.7% for 1995 to $39.6 million from
$32.8 million for 1994. This increase was attributable principally to increased
domestic and international sales of paid-up licenses, offset partially by lower
sales of lease licenses, and to increased maintenance and service revenue. These
increases resulted primarily from the Company's increased marketing emphasis,
market acceptance of new product releases and related broader customer usage of
maintenance and support services in response to accelerated frequency of product
releases and the Company's increased emphasis on marketing its maintenance
services.
Software license revenue increased 15.2% for 1995 to $32.6 million from $28.3
million for 1994. Revenue from sales of paid-up licenses increased 52.6% for
1995 to $14.5 million from $9.5 million for 1994, while lease license revenue
declined 3.7% for 1995 to $18.1 million from $18.8 million for 1994. A portion
of the growth in revenue from paid-up licenses was due to a reduction in the
warranty period, effective in the second half of 1995. This reduction in the
warranty period resulted in a lesser amount of the initial paid-up license fees
being deferred to future periods. Maintenance and service revenue increased
54.8% for 1995 to $7.0 million from $4.5 million for 1994, as a result of a
substantial increase in the sale of paid-up licenses, reduction in the warranty
period and broader customer usage of maintenance and support services. A
substantial portion of this increase was due to increased maintenance revenue.
Of the Company's total revenue for 1995, approximately 47.3% and 52.7%,
respectively, were attributable to domestic and international sales, as compared
to 47.2% and 52.8%, respectively, for 1994.
Cost of Sales and Gross Profit. The Company's total cost of sales increased 4.6%
for 1995 to $4.9 million, or 12.4% of total revenue, from $4.7 million, or 14.3%
of total revenue, for 1994. The Company's cost of sales for software license
revenue decreased 12.2% for 1995 to $3.3 million, or 10.2% of software license
revenue, from $3.8 million, or 13.4% of software license revenue, for 1994. This
decrease was primarily due to a reduction in expenses through lower headcount
and cost controls and implementation of a more efficient multi-platform
development environment for the Company's product releases. The Company's cost
of sales for maintenance and service revenue increased 76.0% for 1995 to $1.6
million, or 22.4% of maintenance and service revenue, from $893,000, or 19.7% of
maintenance and service revenue, for 1994. This increase resulted primarily from
increased staffing to support anticipated demand for customer services.
As a result of the foregoing, the Company's gross profit increased 23.4% to
$34.7 million for 1995 from $28.1 million for 1994.
Selling and Marketing. Selling and marketing expenses increased 66.9% for 1995
to $7.5 million, or 19.0% of total revenue, from $4.5 million, or 13.7% of total
revenue, for 1994. The increase in selling and marketing expenses resulted
primarily from increased personnel costs, including costs associated with
increased headcount and compensation expenses related to the establishment of a
sales force to support the Company's distribution network, as well as increased
commissions associated with increased revenue.
16 ANSYS, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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Research and Development. Research and development expenses increased 23.2% for
1995 to $8.3 million, or 21.0% of total revenue, from $6.8 million, or 20.6% of
total revenue, for 1994. This increase resulted primarily from employment of
additional staff and independent contractors to develop and enhance the
Company's products, including a dedicated team working on the development of the
Company's DesignSpace(TM) product, costs associated with quality assurance and
equipment costs to implement an enhanced multi-platform development environment.
Amortization. Amortization expense was $10.6 million for 1995 and $8.7 million
for 1994. This amortization expense resulted from the 1994 Acquisition and
relates primarily to intangible assets, including goodwill, which are being
amortized from the date of the 1994 Acquisition, March 14, 1994. The unamortized
portion of the goodwill and capitalized software acquired in connection with the
1994 Acquisition will be fully amortized in the first quarter of 1997.
General and Administrative. General and administrative expenses increased 17.4%
for 1995 to $6.9 million, or 17.3% of total revenue, from $5.8 million, or 17.8%
of total revenue, for 1994. This increase resulted primarily from the employment
of additional staff as well as an increase in accounting and legal expenses in
support of the Company's increased level of operations. The Company has
maintained a relatively stable headcount while adding administrative support
services, such as computerized order fulfillment and corporate-wide information
technology systems, to support its future operations.
Interest. Interest expense increased 26.3% for 1995 to $4.0 million from $3.2
million for 1994. This increase resulted from interest on indebtedness incurred
to finance the 1994 Acquisition for the full year of 1995 as compared to nine
and one-half months in 1994, as well as an increase in the weighted average
interest rate to 9.6% for 1995 from 8.4% for 1994.
Income Tax Benefit. The income tax benefit decreased to $793,000 for 1995 from
$917,000 for 1994. For the portion of 1994 prior to the 1994 Acquisition, the
Company's predecessor was taxed as an S Corporation and as such was not subject
to federal or state income taxes. Excluding this period, the effective tax rates
were 33.4% for 1995 and 33.9% for 1994. These percentages are less than the
federal and state combined statutory rate of approximately 39.0% due primarily
to the utilization of research and experimentation credits.
Net Loss. As a result of the foregoing, the Company reported a net loss of $1.6
million in 1995, compared to net income of $257,000 in 1994.
Liquidity and Capital Resources
As of December 31, 1996, the Company had cash and cash equivalents of $17.1
million and working capital of $14.7 million, as compared to cash and cash
equivalents of $8.1 million and working capital of $3.2 million at December 31,
1995. The improvement in the working capital position was primarily due to the
net proceeds of $41.1 million received from the Company's initial public
offering on June 25, 1996. The proceeds from the offering were used to repay the
1994 Loan and the Subordinated Notes, including accrued and unpaid interest, and
retire all of the Company's outstanding Redeemable Preferred Stock, including
accumulated dividends. Previously, the Company also had available a $1.0 million
revolving line of credit with a commercial bank under a credit facilities
agreement. During the second quarter of 1996, the Company elected to terminate
the line of credit.
The Company's operating activities provided cash of $13.5 million for 1996,
$10.8 million for 1995 and $9.1 million for 1994. The increase in cash flow from
operations in 1996 as compared to 1995 and 1994 is the result of increased
earnings before the effect of depreciation and amortization, as well as improved
management of working capital.
Cash used in investing activities was $2.6 million for 1996, $2.0 million for
1995 and $48.2 million for 1994. The Company's use of cash in 1996 and 1995 was
substantially related to capital expenditures. The Company's use of cash in 1994
was primarily to fund the 1994 Acquisition and, to a lesser extent for capital
expenditures. The Company expects to spend approximately $4.5 million for
capital expenditures in 1997, principally for the acquisition of furniture and
equipment for the new corporate office facility, as well as computer hardware
and software to support the continued growth of the Company's development
activities and expansion of its global sales and support infrastructure.
Financing activities used cash of $1.9 million and $5.0 million for 1996 and
1995, respectively, and provided cash of $42.6 million for 1994. Cash provided
from financing activities for 1996 was due primarily to the net proceeds of
$41.1 million received from the Company's initial public offering on June 25,
1996. Cash used for financing activities for 1996 was principally for the
repayment of the 1994 Loan and Subordinated Notes, payment of related unpaid
interest and the redemption of the Redeemable Preferred Stock and accumulated
dividends. Cash used for 1995 and 1994 was the result of principal repayments
made on the 1994 Loan. Cash provided from financing activities for 1994 was due
primarily to bank borrowings and the issuance of debt and equity securities
related to the 1994 Acquisition.
ANSYS, Inc. 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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The Company believes that existing cash and cash equivalent balances, together
with cash generated from operations, will be sufficient to meet the Company's
working capital and capital expenditure requirements through at least the next
fiscal year. The Company's cash requirements in the future may also be financed
through additional equity or debt financings. There can be no assurance that
such financing can be obtained on favorable terms, if at all.
Important Factors Regarding Future Results
Information provided by the Company, including information contained in this
Annual Report to Shareholders, or its spokespersons may from time to time
contain forward-looking statements concerning projected financial performance,
market and industry segment growth, product development and commercialization or
other aspects of future operations. Such statements will be based on the
assumptions and expectations of the Company's management at the time such
statements are made. The Company cautions investors that its performance (and,
therefore, any forward-looking statement) is subject to risks and uncertainties.
Various important factors, including but not limited to the following, may cause
the Company's future results to differ materially from those projected in any
forward-looking statement.
Potential Fluctuations in Operating Results. The Company may experience
significant fluctuations in future quarterly operating results. Fluctuations may
be caused by many factors, including the timing of new product releases or
product enhancements by the Company or its competitors; the size and timing of
individual orders, including a fluctuation in the demand for large contracts;
software errors or other product quality problems; competition and pricing;
customer order deferrals in anticipation of new products or product
enhancements; reduction in demand for the Company's products; changes in
operating expenses; mix of software license and maintenance and service revenue;
personnel changes and general economic conditions. A substantial portion of the
Company's operating expenses is related to personnel, facilities and marketing
programs. The level of personnel and personnel expenses cannot be adjusted
quickly and is based, in significant part, on the Company's expectation for
future revenues. The Company does not typically experience significant order
backlog. Further, the Company has often recognized a substantial portion of its
revenue in the last month of a quarter, with this revenue frequently
concentrated in the last weeks or days of a quarter. As a result, product
revenues in any quarter are substantially dependent on orders booked and shipped
in the latter part of that quarter, and revenues for any future quarter are not
predictable with any significant degree of accuracy.
Stock Market Volatility. Market prices for securities of software companies have
generally been volatile. In particular, the market price of the Company's common
stock has been and may continue to be subject to significant fluctuations as a
result of factors affecting the Company and software industry or the securities
markets in general.
In addition, a large percentage of the Company's common stock is held by
institutional investors. Consequently, actions with respect to the Company's
common stock by certain of these institutional investors could have a
significant impact on the market price for the stock.
Rapidly Changing Technology; New Products; Risk of Product Defects. The markets
for the Company's products are generally characterized by rapidly changing
technology and frequent new product introductions that can render existing
products obsolete or unmarketable. A major factor in the Company's future
success will be its ability to anticipate technological changes and to develop
and introduce in a timely manner enhancements to its existing products and new
products to meet those changes. If the Company is unable to introduce new
products and respond to industry changes on a timely basis, its business,
financial condition and results of operations could be materially adversely
affected. The introduction and marketing of new or enhanced products require the
Company to manage the transition from existing products in order to minimize
disruption in customer purchasing patterns. There can be no assurance that the
Company will be successful in developing and marketing, on a timely basis, new
products or product enhancements, that its new products will adequately address
the changing needs of the marketplace, or that it will successfully manage the
transition from existing products. Software products as complex as those offered
by the Company may contain undetected errors or failures when first introduced
or as new versions are released, and the likelihood of errors is increased as a
result of the Company's commitment to accelerating the frequency of its product
releases. There can be no assurance that errors will not be found in new or
enhanced products after commencement of commercial shipments. Any of these
problems may result in the loss of or delay in market acceptance, diversion of
development resources, damage to the Company's reputation, or increased service
or warranty costs, any of which could have a materially adverse effect upon the
Company's business, financial condition and results of operations.
Dependence on Distributors. The Company distributes its products principally
through its global network of 36 independent, regional ASDs. The ASDs sell ANSYS
products and other noncompeting products to new and existing customers, expand
installations within their existing customer base, offer
18 ANSYS, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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consulting services and provide the first line of ANSYS technical support. The
ASDs have more immediate contact with most customers who use ANSYS software than
does the Company. Consequently, the Company is highly dependent on the efforts
of the ASDs. Difficulties in ongoing relationships with ASDs, such as delays in
collecting accounts receivable, ASDs' failure to meet performance criteria or to
promote the Company's products as aggressively as the Company expects, and
differences in the handling of customer relationships, could adversely affect
the Company's performance. Additionally, the loss of any major ASD for any
reason, including an ASD's decision to sell competing products rather than ANSYS
products, could have a materially adverse effect on the Company. Moreover, the
Company's future success will depend substantially on the ability and
willingness of its ASDs to continue to dedicate the resources necessary to
promote the Company's products and to support a larger installed base of the
Company's products. If the ASDs are unable or unwilling to do so, the Company
may be unable to sustain revenue growth.
Competition. The CAD, computer-aided engineering ("CAE") and computer-aided
manufacturing ("CAM") markets are intensely competitive. In the traditional CAE
market, the Company's primary competitors include MacNeal-Schwendler
Corporation, Hibbitt, Karlsson and Sorenson, Inc. and MARC Analysis Research
Corporation. The Company also faces competition from smaller vendors of
specialized analysis applications in fields such as computational fluid
dynamics. In addition, certain integrated CAD suppliers such as Parametric
Technology Corporation and Structural Dynamics Research Corporation provide
varying levels of design analysis and optimization and verification capabilities
as part of their product offerings.
The entrance of new competitors would be likely to intensify competition in all
or a portion of the overall CAD, CAE and CAM market. Some of the Company's
current and possible future competitors have greater financial, technical,
marketing and other resources than the Company, and some have well established
relationships with current and potential customers of the Company. It is also
possible that alliances among competitors may emerge and rapidly acquire
significant market share or that competition will increase as a result of
software industry consolidation. Increased competition may result in price
reductions, reduced profitability and loss of market share, any of which would
materially adversely affect the Company's business, financial condition and
results of operations.
Dependence on Senior Management and Key Technical Personnel. The Company is
highly dependent upon the ability and experience of its senior executives and
its key technical and other management employees. Although the Company has
entered into employment agreements with two executives, the loss of these, or
any of the Company's other key employees, could adversely affect the Company's
ability to conduct its operations.
Risks Associated with International Activities. A significant portion of the
Company's business comes from outside the United States. Risks inherent in the
Company's international business activities include imposition of government
controls, export license requirements, restrictions on the export of critical
technology, political and economic instability, trade restrictions, changes in
tariffs and taxes, difficulties in staffing and managing international
operations, longer accounts receivable payment cycles and the burdens of
complying with a wide variety of foreign laws and regulations. Effective
copyright and trade secret protection may not be available in every foreign
country in which the Company sells its products. The Company's business,
financial condition and results of operations could be materially adversely
affected by any of these risks.
Dependence on Proprietary Technology. The Company's success is highly dependent
upon its proprietary technology. The Company does not have patents on any of its
technology and relies on contracts and the laws of copyright and trade secrets
to protect its technology. Although the Company maintains a trade secrets
program, enters into confidentiality agreements with its employees and
distributors and limits access to and distribution of its software,
documentation and other proprietary information, there can be no assurance that
the steps taken by the Company to protect its proprietary technology will be
adequate to prevent misappropriation of its technology by third parties, or that
third parties will not be able to develop similar technology independently.
Although the Company is not aware that any of its technology infringes upon the
rights of third parties, there can be no assurance that other parties will not
assert technology infringement claims against the Company, or that, if asserted,
such claims will not prevail.
Increased Reliance on Perpetual Licenses. The Company has historically
maintained stable recurring revenue from the sale of time-based licenses for its
software products. Recently, the Company has experienced an increase in customer
preference for perpetual licenses that involve payment of a single up-front fee
and that are more typical in the computer software industry. Although lease
license revenue currently represents a significant portion of the Company's
software license fee revenue, to the extent that perpetual license revenue
increases as a percent of total software license fee revenue, the Company's
revenue in any period will increasingly depend on sales completed during that
period.
ANSYS, Inc. 19
REPORT OF INDEPENDENT ACCOUNTANTS
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To the Board of Directors of ANSYS, Inc. and Subsidiaries:
We have audited the accompanying consolidated balance sheets of ANSYS, Inc.
and Subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the years
ended December 31, 1996 and 1995 and for the period from March 14, 1994 (date of
acquisition) through December 31, 1994. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of ANSYS, Inc. and Subsidiaries as of December 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for the years
ended December 31, 1996 and 1995 and for the period from March 14, 1994 (date
of acquisition) through December 31, 1994, in conformity with generally
accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Pittsburgh, Pennsylvania
February 7, 1997
20 ANSYS, Inc.
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
December 31, December 31,
(in thousands, except share data) 1996 1995
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $17,069 $ 8,091
Accounts receivable, less allowance for doubtful accounts of $950 in 1996 and
$700 in 1995 7,307 7,666
Refundable and prepaid income taxes -- 1,497
Other current assets 350 439
Deferred income taxes 422 356
- -------------------------------------------------------------------------------------------------------------------------------
Total current assets 25,148 18,049
Securities available for sale 673 --
Property and equipment, net 4,334 3,164
Capitalized software costs, net of accumulated amortization of $14,328
in 1996 and $9,179 in 1995 1,174 6,206
Goodwill, net of accumulated amortization of $13,652 in 1996 and
$8,762 in 1995 1,019 5,909
Other intangibles, net 1,756 2,807
Deferred income taxes 9,327 6,786
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $43,431 $ 42,921
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 486 $ 639
Accrued bonuses 2,281 1,952
Other accrued expenses and liabilities 1,701 2,140
Accrued income taxes payable 677 --
Accrued interest payable on subordinated debt -- 1,155
Customer prepayments 1,447 972
Deferred revenue 3,865 2,995
Current portion of long-term debt -- 5,000
- -------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 10,457 14,853
Long-term debt, less current portion including amounts due to related parties of $17,204 in 1995 -- 33,204
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities 10,457 48,057
Redeemable preferred stock, $.01 par value, 800 shares authorized; 412 shares issued
and outstanding; at liquidation value, including accrued dividends of $773 in 1995 -- 4,892
Stockholders' equity (deficit):
Preferred stock, $.01 par value; 2,000,000 shares authorized in 1996 -- --
Common stock, $.01 par value; 50,000,000 and 15,000,000 shares authorized in 1996
and 1995; 16,228,985 and 10,626,000 shares issued in 1996 and 1995 162 106
Class A common stock, $.01 par value; nonvoting, 2,000,000 shares authorized;
993,750 shares issued and outstanding in 1995 -- 10
Additional paid-in capital 35,755 1,351
Adjustment for predecessor basis -- (7,010)
Less treasury stock, at cost: 71,600 shares held in 1996 and 54,850 held in 1995 (12) (10)
Retained earnings (deficit) (3,073) (4,141)
Unrealized appreciation in securities available for sale, net 444 --
Notes receivable from stockholders (302) (334)
- -------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 32,974 (10,028)
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities, preferred stock and common stockholders' equity $43,431 $ 42,921
- -------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
ANSYS, Inc. 21
CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Period March 14
to
(in thousands, except per share data) 1996 1995 December 31, 1994
- --------------------------------------------------------------------------------
Revenue:
Software licenses $37,013 $32,604 $22,310
Maintenance and service 10,053 7,012 3,944
- --------------------------------------------------------------------------------
Total revenue 47,066 39,616 26,254
- --------------------------------------------------------------------------------
Cost of sales:
Software licenses 3,051 3,331 3,034
Maintenance and service 2,337 1,572 709
- --------------------------------------------------------------------------------
Total cost of sales 5,388 4,903 3,743
- --------------------------------------------------------------------------------
Gross profit 41,678 34,713 22,511
Operating expenses:
Selling and marketing 9,722 7,526 3,836
Research and development 9,796 8,329 5,410
Amortization 10,774 10,641 8,420
General and administrative 7,712 6,857 4,606
- --------------------------------------------------------------------------------
Total operating
expenses 38,004 33,353 22,272
- --------------------------------------------------------------------------------
Operating income 3,674 1,360 239
Interest expense (1,669) (3,983) (3,091)
Other income 611 250 146
- --------------------------------------------------------------------------------
Income (loss) before income tax
provision (benefit) and
extraordinary item 2,616 (2,373) (2,706)
Income tax provision (benefit) 969 (793) (917)
- --------------------------------------------------------------------------------
Net income (loss) before
extraordinary item 1,647 (1,580) (1,789)
Extraordinary item, net (343) -- --
- --------------------------------------------------------------------------------
Net income (loss) $ 1,304 $(1,580) $(1,789)
- --------------------------------------------------------------------------------
Net income (loss) applicable
to common stock:
Net income (loss) $ 1,304 $(1,580) $(1,789)
Redeemable preferred stock
dividends (236) (445) (327)
- --------------------------------------------------------------------------------
$ 1,068 $(2,025) $(2,116)
Net income (loss) per common share:
Net income (loss) before
extraordinary item $ .09 $ (.17) $ (.19)
Extraordinary item (.02) -- --
Net income (loss) $ .07 $ (.17) $ (.19)
Shares used in computing per common
share amounts 15,087 12,262 11,459
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
22 ANSYS, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
Period March 14
to
(in thousands) 1996 1995 December 31, 1994
- ----------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net income (loss) $ 1,304 $(1,580) $ (1,789)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 11,911 11,458 8,606
Extraordinary item 553 -- --
Deferred income tax benefit (2,836) (2,115) (1,491)
Provision for bad debts 250 50 150
Unrealized loss on foreign exchange -- -- 5
Change in operating assets and liabilities,
net of effects of acquisition:
Accounts receivable 108 (1,981) 58
Income taxes 2,174 (450) (920)
Other current assets 89 534 1,109
Accounts payable, accrued expenses and
liabilities and customer prepayments (942) 3,816 523
Deferred revenue 870 1,034 82
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 13,481 10,766 6,333
- ----------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of Swanson Analysis Systems, Inc., including related
acquisition costs of $273, net of cash acquired of $427 -- -- (46,846)
Capital expenditures (2,544) (1,937) (795)
Capitalization of internally developed software costs (117) (19) --
Other assets -- -- (179)
Notes receivable from stockholders 32 (21) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (2,629) (1,977) (47,820)
- ----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from long-term debt -- -- 28,000
Payments on long-term debt (21,000) (5,000) (2,000)
Proceeds from issuance of restricted stock 326 12 112
Proceeds from issuance of preferred and common stock -- -- 5,150
Proceeds from exercise of stock options 119 -- --
Proceeds from issuance of subordinated notes -- -- 15,450
Repayment of subordinated notes (17,204) -- --
Redemption of preferred stock and accumulated dividends (5,128) -- --
Proceeds from initial public offering, net of issuance
costs of $1,300 41,015 -- --
Debt issuance costs -- -- (925)
Purchase of treasury stock (2) (10) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities (1,874) (4,998) 45,787
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 8,978 3,791 4,300
Cash and cash equivalents, beginning of period 8,091 4,300 --
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 17,069 $ 8,091 $ 4,300
- ----------------------------------------------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 2,848 $ 2,568 $ 1,677
Income taxes 1,636 1,826 1,545
Supplemental noncash investing and financing activities:
Deferred interest notes issued for interest in arrears on
subordinated notes -- 508 1,246
Restricted stock purchased with notes to stockholders -- -- 314
Increase in securities available for sale 673 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
ANSYS, Inc. 23
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
Class A
Common Stock Common Stock Additional
-------------------- --------------------- Paid-In
(in thousands) Shares Amount Shares Amount Capital
- -----------------------------------------------------------------------------------------------------------
Balance, March 14, 1994 --
Initial company capitalization 10,000 $100 -- -- $ 900
Adjustment for predecessor basis -- -- -- -- --
Issuance of Class A common stock -- -- 300 $ 3 27
Issuance of restricted stock 626 6 664 7 413
Dividends accrued on redeemable
preferred stock -- -- -- -- --
Loans to facilitate purchase
of restricted stock -- -- -- -- --
Net loss for the period -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Balance, December 31, 1994 10,626 106 964 10 1,340
Treasury stock acquired -- -- -- -- --
Issuance of Class A common stock -- -- 30 -- 11
Dividends accrued on redeemable
preferred stock -- -- -- -- --
Loans to facilitate purchase
of restricted stock -- -- -- -- --
Net loss for the period -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Balance, December 31, 1995 10,626 106 994 10 1,351
Treasury stock acquired -- -- -- -- --
Issuance of restricted stock 136 1 -- -- 325
Conversion of Class A shares into
common stock 994 10 (994) (10) --
Issuance of common stock 3,500 35 -- -- 40,980
Reinstatement of adjustment
for predecessor basis -- -- -- -- (7,010)
Unrealized appreciation in securities, net -- -- -- -- --
Exercise of stock options 973 10 -- -- 109
Dividends accrued on redeemable
preferred stock -- -- -- -- --
Repayment of notes receivable
from stockholder -- -- -- -- --
Net income for the period -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 16,229 $162 -- $-- $35,755
- -----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
24 ANSYS, Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
Unrealized
Appreciation Notes
Adjustment for Treasury Stock Retained in Securities Receivable Total
Predecessor ------------------- Earnings Available from Stockholders'
Basis Shares Amount (Deficit) for Sale Stockholders Equity
- ---------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- --
-- -- -- -- -- -- $ 1,000
$(7,010) -- -- -- -- -- (7,010)
-- -- -- -- -- -- 30
-- -- -- -- -- -- 426
-- -- -- $ (327) -- -- (327)
-- -- -- -- -- $(314) (314)
-- -- -- (1,789) -- -- (1,789)
- ---------------------------------------------------------------------------------------------------------
(7,010) -- -- (2,116) -- (314) (7,984)
-- 55 $(10) -- -- -- (10)
-- -- -- -- -- -- 11
-- -- -- (445) -- -- (445)
-- -- -- -- -- (20) (20)
-- -- -- (1,580) -- -- (1,580)
- ---------------------------------------------------------------------------------------------------------
(7,010) 55 (10) (4,141) -- (334) (10,028)
-- 17 (2) -- -- -- (2)
-- -- -- -- -- -- 326
-- -- -- -- -- -- --
-- -- -- -- -- -- 41,015
7,010 -- -- -- -- -- --
-- -- -- -- $444 -- 444
-- -- -- -- -- -- 119
-- -- -- (236) -- -- (236)
-- -- -- -- -- 32 32
-- -- -- 1,304 -- -- 1,304
- ---------------------------------------------------------------------------------------------------------
$ -- 72 $(12) $(3,073) $444 $(302) $ 32,974
- ---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
ANSYS, Inc. 25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Organization and Initial Public Offering:
ANSYS, Inc. (the "Company"), formerly SAS Holdings, Inc., is a holding company
incorporated on January 12, 1994 for the purpose of acquiring through its
subsidiary, SAS Acquisition Corp. (Acquisition), substantially all of the assets
and technology, and the assumption of certain liabilities of Swanson Analysis
Systems, Inc. (the "1994 Acquisition"). The Company, through its operating
subsidiaries, develops, markets and supports a family of mechanical computer-
aided engineering software products. The Company's products are marketed and
sold to many industries throughout the world, including automotive, aerospace
and electronics.
Effective June 20, 1996, the Company completed an initial public offering
("IPO") of 3,500,000 shares of Common Stock at $13.00 per share. The net
proceeds (after deducting underwriting discounts and commissions and offering
expenses) totaled $41.1 million and were used as follows: (i) the repayment of
approximately $18.5 million of senior secured indebtedness (the "1994 Loan"),
including accrued and unpaid interest; (ii) the repayment of $17.5 million of
10% Subordinated Notes (the "Subordinated Notes") including accrued and unpaid
interest and (iii) the redemption of $5.1 million of Redeemable Preferred Stock,
including accumulated dividends.
The accompanying financial statements present the Company's consolidated
operations and cash flows from the acquisition date of March 14, 1994 through
December 31, 1994 and for the years ended December 31, 1995 and 1996.
2. Summary of Significant Accounting Policies:
Principles of Consolidation:
The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, ANSYS Operating Corporation, SAS IP,
Inc. and ASN Systems Limited. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Revenue Recognition:
The Company's revenue recognition policy is in conformance with the American
Institute of Certified Public Accountants' Statement of Position 91-1,
"Software Revenue Recognition."
The Company's products are sold primarily through distributors, who are
resellers with respect to its products. Revenue is derived principally from the
licensing of computer software products, either on an annual lease, monthly
lease or perpetual basis, and from related maintenance contracts. Revenue from
product licensing for perpetual licenses is recognized upon delivery of the
product, acceptance by the customer and receipt of a signed contractual
obligation provided that no significant Company obligations remain and
collection of the receivable is probable. A portion of the license fees from
noncancellable annual leases is recognized as paid-up revenue upon inception of
the lease. The remaining portion is recognized as maintenance revenue ratably
over the remaining lease period. Revenue for monthly lease licenses is
recognized monthly as earned because the lease license agreements can be
canceled by the customers with 30 days' notice. The portion of the perpetual
license and annual lease fees associated with providing the initial warranty is
unbundled from the fee and deferred and recognized ratably over the warranty
period. Maintenance billed separately is recognized ratably over the term of the
agreement. Costs related to maintenance obligations are expensed as incurred.
Revenue from training, support and other services is recognized as the services
are performed.
Cash Equivalents:
For the purposes of the consolidated statements of cash flows, the Company
considers highly liquid deposits in money market funds to be cash equivalents.
Cash equivalents are recorded at cost, which approximates fair value.
Securities Available for Sale:
The Company follows the provisions of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," which addresses the classification, accounting and disclosure of
investments in debt and equity securities. In accordance with Statement No. 115,
the Company has investments in marketable equity securities that have been
classified as available-for-sale, and accordingly, are carried at fair value,
with the unrealized gains and losses, net of tax, reported in a separate
component of stockholders' equity until disposition.
Property and Equipment:
Property and equipment is carried at cost which includes the allocated purchase
price for the acquisition. Depreciation is computed by the straight-line method
over the estimated useful lives of the various classes of assets, which range
from three to ten years. Repairs and maintenance are charged to expense as
incurred. Gains or losses from the sale or retirement of property and equipment
are included in the results of operations.
26 ANSYS, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Capitalized Software:
Internally developed computer software costs and costs of product enhancements
are capitalized subsequent to the determination of technological feasibility;
such capitalization continues until the product becomes available for general
release. Amortization of capitalized software costs, both for internally
developed as well as for purchased software products, is computed on a product-
by-product basis over the estimated economic life of the product which ranges
from three years to five years. Amortization is the greater of the amount
computed using: (1) the ratio of the current year's gross revenue to the total
current and anticipated future gross revenue for that product or (2) the
straight-line method over the estimated life of the product.
The Company periodically reviews the carrying value of capitalized software and
impairments are recognized in the results of operations when the expected future
undiscounted operating cash flow derived from the capitalized software is less
than its carrying value.
Research and Development Costs:
Research and development costs are expensed as incurred.
Goodwill and Other Intangible Assets:
Intangible assets consist of the excess of the purchase cost over the fair value
of net assets acquired (goodwill), the ANSYS trade name and a noncompete
agreement, which are being amortized on the straight-line method over the
estimated useful lives of these assets. The Company periodically evaluates the
carrying value of goodwill, which is being amortized over three years, based on
whether the goodwill is recoverable from expected future undiscounted operating
cash flows of the related business. Additionally, the Company periodically
reviews the carrying value of other intangible assets and will recognize
impairments when the expected future operating cash flow derived from such
intangible assets is less than their carrying value.
Debt Issuance Costs:
Debt issuance costs, which were incurred by the Company in connection with the
1994 Acquisition, were deferred and amortized over the term of the related debt
(See Note 6). Debt issuance costs have been included in other intangibles on the
consolidated balance sheets. As a result of the early repayment of the 1994 Loan
with a portion of the net proceeds from its IPO, the Company has written-off the
unamortized balance of the debt issuance cost, which has been reflected as an
extraordinary item, net of income taxes, in the Consolidated Statement of
Operations for the year ended December 31, 1996.
Concentrations of Credit Risk:
The Company invests its cash primarily in deposits and money market funds with
commercial banks. The Company has not experienced any losses to date on its
invested cash.
The Company has a concentration of credit risk with respect to trade receivables
because of the limited number of distributors through which the Company sells
its products. The Company performs periodic credit evaluations of its ASDs'
financial condition and generally does not require collateral.
During 1996, sales by distributors comprised approximately 96% of the Company's
total revenue, with two distributors accounting for approximately 13% and 9% of
total revenue. During 1995, sales by distributors comprised approximately 97% of
the Company's total revenue, with two distributors accounting for approximately
15% and 10% of total revenue. Sales by distributors comprised approximately 97%
of the Company's total revenues for the period March 14, 1994 through December
31, 1994, with two distributors accounting for 18% and 10% of total revenue.
Income Taxes:
Deferred tax assets and liabilities are determined based on temporary
differences between the financial statement and the tax basis of assets and
liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
Foreign Currency Transactions:
Certain of the Company's sales transactions are denominated in foreign
currencies. These transactions are translated to U.S. dollars at the exchange
rate on the transaction date. Accounts receivable in foreign currencies at year-
end are translated at the effective exchange rate on that date. The unrealized
exchange loss or gain resulting from the translation as of year-end is included
in the results of operations.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements.
Estimates also affect the amounts of revenues and expenses during the reporting
periods. Actual results could differ from the estimates.
ANSYS, Inc. 27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Net Income (Loss) Per Share:
Net income (loss) per share is computed using the weighted average number of
common and common equivalent shares outstanding during each period. Common
equivalent shares are not included in the per share calculations where their
inclusion would be antidilutive, except that, in accordance with certain
Securities and Exchange Commission (SEC) Staff Accounting Bulletins, common and
common equivalent shares issued within 12 months of the IPO date have been
included in the calculation as if they were outstanding for all periods prior to
June 20, 1996, using the treasury stock method and the IPO price. Such shares
totaled 690,680. Common equivalent shares also consist of the common shares
issuable upon the exercise of stock options (using the treasury stock method).
Primary and fully diluted net income (loss) per share are the same for all
periods presented.
Common Stock Split:
In April 1996, the Board of Directors approved an amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
common stock to 50,000,000 and to effect a ten-for-one stock split of the
Company's common stock in the form of a stock dividend, paid on or about April
30, 1996. All references in the accompanying consolidated financial statements
to share and per share amounts have been retroactively restated to reflect the
stock split.
3. Property and Equipment:
Property and equipment consisted of the following:
December 31, December 31,
(in thousands) 1996 1995
- --------------------------------------------------------
Equipment $ 3,307 $1,721
Computer software 1,920 1,557
Furniture 527 266
Leasehold improvements 828 530
- --------------------------------------------------------
6,582 4,074
Less: accumulated depreciation
and amortization (2,248) (910)
- --------------------------------------------------------
$ 4,334 $3,164
- --------------------------------------------------------
Depreciation expense was approximately $1,137,000 for the year ended December
31, 1996, $877,000 for the year ended December 31, 1995 and $186,000 for the
period March 14, 1994 through December 31, 1994.
During January 1996, the Company approved plans to move into new corporate
office facilities on or about February 20, 1997 (See Note 14). Accordingly, the
Company reduced the estimated useful life of the leasehold improvements
maintained on its existing facilities through the anticipated move date. This
resulted in an increase in depreciation expense of $162,000 for the year ended
December 31, 1996 and $108,000 for the year ended December 31, 1995.
4. Other Intangible Assets:
The components of other intangible assets were as follows:
Estimated
Useful December 31, December 31,
(in thousands) Lives 1996 1995
- -------------------------------------------------------------------------------
Trade names 10 $ 1,824 $ 1,824
Noncompete agreement 5 1,000 1,000
Debt issuance costs 5 -- 925
Other 3 -- 179
- -------------------------------------------------------------------------------
2,824 3,928
Less: accumulated
amortization (1,068) (1,121)
- -------------------------------------------------------------------------------
$ 1,756 $ 2,807
- -------------------------------------------------------------------------------
5. Securities Available for Sale:
Securities available for sale consisted of the following at December 31, 1996:
Gross Gross Gross
Unrealized Unrealized Estimated
(in thousands) Cost Gains Losses Fair Value
- ------------------------------------------------------------------------------
Long-term:
Marketable
equity
securities $ -- $ 915 $ 242 $ 673
- ------------------------------------------------------------------------------
$ -- $ 915 $ 242 $ 673
- ------------------------------------------------------------------------------
The marketable equity securities are subject to a one year lockup agreement,
which restricts the sales of any of the securities through August 29, 1997.
28 ANSYS, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6. Long-Term Debt:
Long-term debt consisted of the following at December 31,
1995:
(in thousands)
- -----------------------------------------------------------
Senior term loan $21,000
Subordinated notes 15,450
Deferred interest notes 1,754
- -----------------------------------------------------------
38,204
Less: current portion (5,000)
- -----------------------------------------------------------
Long-term debt $33,204
- -----------------------------------------------------------
As described in Note 1, in connection with the Company's IPO, a portion of the
net proceeds were used to repay all of the outstanding principal of the senior
secured and subordinated indebtedness, as well as all accrued and unpaid
interest.
7. Income Taxes:
The provision (benefit) for income taxes is comprised of the following:
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
(in thousands) 1996 1995 1994
- ---------------------------------------------------------------------
Current:
Federal $ 2,886 $ 680 $ 86
State 244 5 --
Foreign 675 637 488
Deferred:
Federal (2,836) (2,115) (1,491)
- ---------------------------------------------------------------------
Total $ 969 $ (793) $ (917)
- ---------------------------------------------------------------------
The reconciliation of the federal statutory tax rate to the
consolidated effective tax rate is as follows:
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
1996 1995 1994
- --------------------------------------------------------------------
Federal statutory
tax rate 34.0% 34.0% 34.0%
State income
taxes, net of
federal benefit 6.1 0.5 --
Research and
experimentation
credit (3.1) (1.1) (0.1)
- --------------------------------------------------------------------
37.0% 33.4% 33.9%
- --------------------------------------------------------------------
The components of net deferred tax assets and liabilities are
as follows:
December 31, December 31,
(in thousands) 1996 1995
- ---------------------------------------------------------------------
Deferred tax assets:
Goodwill $ 4,148 $ 2,854
Capitalized software 5,172 3,884
Other intangible assets 370 320
Allowance for doubtful accounts 323 238
Accrued expenses and liabilities 234 118
- ---------------------------------------------------------------------
10,247 7,414
Deferred tax liability:
Property and equipment 189 202
Other 309 70
- ---------------------------------------------------------------------
498 272
- ---------------------------------------------------------------------
Net deferred tax asset $ 9,749 $7,142
- ---------------------------------------------------------------------
Based upon the Company's current and historical taxable income and the
anticipated level of future taxable income, management believes it is more
likely than not that all of the deferred tax assets will be realized.
Accordingly, no valuation allowance has been established against the deferred
tax assets.
8. Redeemable Preferred Stock:
As described in Note 1, in connection with the Company's IPO, a portion of the
IPO proceeds were used for the full redemption and cancellation of the 412
shares of issued and outstanding redeemable preferred stock, at a liquidation
value of $10,000 per share, plus accrued and unpaid dividends, which totaled
approximately $1,000,000 at the time of the offering.
9. Stockholders' Equity:
The Company is authorized to issue up to 50,000,000 shares of $.01 par value
voting common stock. Upon the closing of the Company's IPO, each Class A share
was converted into one share of common stock. Subsequently, the Class A common
stock was cancelled.
Certain holders of the Company's common stock have entered into transfer
restrictions with the Company. Among other provisions, the agreements restrict
the transfer of common stock and allow for repurchase of unvested shares by the
Company at the original purchase price, in the event that the restricted shares
are offered for sale or upon cessation of employment of the holder with the
Company.
ANSYS, Inc. 29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
On April 19, 1996, the Board of Directors authorized 2,000,000 shares of
undesignated preferred stock issuable in one or more series by the Board of
Directors. At December 31, 1996, there were no shares of preferred stock issued
or outstanding.
10. Pension and Profit-Sharing Plans:
The Company maintains both a money purchase pension plan and a profit-sharing
plan for all qualifying full-time employees. The plans are noncontributory. The
pension plan requires the Company to contribute 20% of each participant's
compensation annually while the profit-sharing contribution is determined
annually by the Board of Directors, subject to a maximum limitation of 5% of
eligible compensation.
Pension expense was $1,563,000 for the year ended December 31, 1996, $1,500,000
for the year ended December 31, 1995 and $1,318,000 for the period March 14,
1994 through December 31, 1994. Additionally, profit-sharing expense was
$319,000 for the year ended December 31, 1996, $346,000 for the year ended
December 31, 1995 and $322,000 for the period March 14, 1994 through December
31, 1994.
11. Noncompete and Employment Agreements:
The Company has entered into noncompete agreements with certain holders of the
Company's common stock. The agreements preclude the stockholders from competing
either directly or indirectly with the Company for a period ranging from one to
three years subsequent to termination.
The Company has entered into employment agreements with the Chief Executive
Officer and another senior executive. The terms of the agreements are
substantially similar except with respect to minimum annual base salary. In the
event the Chief Executive Officer is terminated without cause, his employment
agreement provides for severance at the annual rate of $300,000 for the later of
a period of one year after termination or when he accepts other employment. In
the event the other senior executive is terminated without cause, his employment
agreement provides that the Company will continue to pay his base salary of
$256,000, subject to specified cost of living increases, through the later of
March 14, 1999 or six months from the date of termination. The Chief Executive
Officer and the other senior executive are subject to one and three-year
restrictions on competition, respectively, with the Company following
termination of employment under the circumstances described in each contract.
12. Stock Option and Grant Plans:
The Company has two stock option and grant plans u the 1994 Stock Option and
Grant Plan ("1994 Stock Plan") and the 1996 Stock Option and Grant Plan ("1996
Stock Plan"). The 1994 and 1996 Stock Plans authorize the grant of up to 868,110
and 2,250,000 shares, respectively, of the Company's common stock in the form
of: (i) incentive stock options ("ISOs"), (ii) nonqualified stock options or
(iii) the issuance or sale of common stock with or without vesting or other
restrictions (Stock Grants). Additionally, the 1996 Stock Plan permits the grant
of common stock upon the attainment of specified performance goals (Performance
Share Awards) and the grant of the right to receive cash dividends with the
holders of the common stock as if the recipient held a specified number of
shares of the common stock (Dividend Equivalent Rights). No further grants may
be made under the 1994 Stock Plan.
The 1994 and 1996 Stock Plans provide that: (i) the exercise price of an ISO
must be no less than the fair value of the relevant stock at the date of grant
and (ii) the exercise price of an optionee who possesses more than 10% of the
total combined voting power of all classes of stock must be no less than 110% of
the fair market value of the stock at the time of grant. The Board of Directors
has the authority to set expiration dates no longer than ten years from the date
of grant (or five years for an optionee who meets the 10% criteria), payment
terms and other provisions of each grant. Shares associated with unexercised
options or repurchased shares of common stock become available for options or
issuances under the 1996 Stock Plan. The Compensation Committee of the Board of
Directors may, in its sole discretion, accelerate or extend the date or dates on
which all or any particular award or awards granted under the 1994 and 1996
Stock Plans may be exercised or vest. In the event of a merger, liquidation, or
the sale of substantially all of the assets of the Company, the Board of
Directors has the discretion to accelerate the vesting of the options granted
under the 1994 and 1996 Stock Plans, except that options granted to the Chief
Executive Officer and Independent Directors as described below vest
automatically in such circumstances. In addition, the 1994 and 1996 Stock Plans
and the grants issued thereunder terminate upon the effectiveness of any such
transaction or event, unless provision is made in connection with such
transaction for the assumption of grants theretofore made. Under the 1996 Stock
Plan, at the discretion of the Compensation Committee, any option may include a
"reload" feature. Such feature allows an optionee exercising an option to
receive, in addition to the number of shares of common stock due on the
exercise, an additional option with an exercise price equal to the fair market
value of the common stock on the date such additional option is granted.
30 ANSYS, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
During 1994, the Company issued 1,289,750 shares of restricted common stock to
certain officers, employees and a member of the Board of Directors. In addition,
during 1996 and 1995 the Company issued 135,860 and 30,000 shares of restricted
common stock to an officer and members of the Board of Directors, respectively.
Substantially all shares of restricted stock and all of the options under both
the 1994 and 1996 Stock Plans were issued at the estimated market value of the
Company's common stock at the time of issuance. The recipients of the restricted
stock are required to continue in the employment or service of the Company for
periods up to five years after the date of issuance for ownership to vest and
provide for repurchase of unvested restricted stock by the Company at the
original purchase price in the event of the termination of employment prior to
vesting. In addition, 135,860 shares of restricted stock provide for accelerated
vesting in the event of a sale of the Company or the attainment of specified
valuations for the Company's common stock. Upon termination of employment, the
Company repurchased 16,750 and 54,850 shares of restricted stock from employees
in 1996 and 1995, respectively.
Restricted stock purchases, grants and option activity under the 1994 and 1996
Stock Plans, and the issuance of 50,000 shares of restricted stock to members of
the Board of Directors under separate agreements, are summarized as follows:
1994 Stock Option and Grant Plan:
Restricted Stock Stock Options
------------------------ --------------------------
Number Range of Number Range of
(in thousands, except for range of issue price) of Shares Issue Price of Options Issue Price
- -------------------------------------------------------------------------------------------------------------
Outstanding at March 14, 1994 (date of acquisition) -- -- -- --
Issued/granted 1,290 $.01-.40 960 $ .11
Exercised -- -- -- --
Repurchased/canceled -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 1994 1,290 .01-.40 960 .11
Issued/granted 30 .40 315 .40
Exercised -- -- -- --
Repurchased/canceled (55) .01-.40 -- --
- -------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 1995 1,265 .01-.40 1,275 .11-.40
Issued/granted 1,096(1) .11-2.40(1) 553 1.275-11.00
Exercised -- -- (973)(1) .11-1.275(1)
Repurchased/canceled (17) .10 (16) .40-10.00
- -------------------------------------------------------------------------------------------------------------
Outstanding at December 31,1996 2,344 $.01-2.40 839 $ .11-11.00
- -------------------------------------------------------------------------------------------------------------
Exercisable at:
December 31, 1994 219 --
- -------------------------------------------------------------------------------------------------------------
December 31, 1995 471 --
- -------------------------------------------------------------------------------------------------------------
December 31, 1996 721 91
- -------------------------------------------------------------------------------------------------------------
(1) Includes 960 options exercised by a stockholder at an exercise price of $.11
per share. The shares received upon such exercise are restricted subject to
repurchase by the Company in certain circumstances and vest in March 1998
and 1999.
1996 Stock Option and Grant Plan:
Number Range of
(in thousands, except for range of issue price) of Options Issue Price
- --------------------------------------------------------------------------------------
Issued/granted 415 $11.75-13.125
Exercised -- --
Repurchased/canceled (1) 11.75
- --------------------------------------------------------------------------------------
Outstanding at December 31,1996 414 $11.75-13.125
- --------------------------------------------------------------------------------------
Exercisable at:
December 31, 1996 --
- --------------------------------------------------------------------------------------
ANSYS, Inc. 31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The Company has elected to account for stock-based compensation arrangements
under the provisions of Accounting Principles Board Opinion No. 25, "Accounting
for Stock-Based Compensation," which resulted in no compensation costs being
recorded. The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." Accordingly, no compensation expense has been recognized for
restricted stock or options which have been issued under the 1994 and 1996 Stock
Plans. Had compensation costs for the Company's two stock option and grant plans
been determined based upon the fair value at the grant date for the option
awards in 1996 and 1995 consistent with the provisions of SFAS No. 123, the
Company's net income (loss) and net income (loss) per share would have changed
as follows:
(in thousands, except per share data) 1996 1995
- --------------------------------------------------------------------
Net income (loss)-as reported $1,304 $(1,580)
Net income (loss)-pro forma 927 (1,585)
Net income (loss) per share-as reported $ 0.07 $ (0.17)
Net income (loss) per share-pro forma 0.05 (0.17)
- --------------------------------------------------------------------
The weighted-average fair value of options granted was $9.03 per share in 1996
and $0.40 per share in 1995.
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the risk-free interest rates ranging
from a low of 5.24% to a high of 6.48%. The interest rates used were determined
by using the five year Treasury Bill rate at the date of grant. The following
assumptions were also used to determine the fair value of each option grant:
dividend yields of 0%; expected volatility of 70% and expected term of 5 years.
13. Employee Stock Purchase Plan:
The Company's 1996 Employee Stock Purchase Plan ("Purchase Plan") was adopted
by the Board of Directors on April 19, 1996 and was subsequently approved by the
Company's stockholders. Up to 210,000 shares of common stock may be issued under
the Purchase Plan. The Purchase Plan is administered by the Compensation
Committee. The first offering under the Purchase Plan commenced on August 1,
1996 and closed on January 31, 1997. Subsequent offerings will commence on each
February 1 and August 1 thereafter, and will have a duration of six months. An
employee who owns or is deemed to own shares of stock representing in excess of
5% of the combined voting power of all classes of stock of the Company may not
participate in the Purchase Plan.
During each offering, an eligible employee may purchase shares under the
Purchase Plan by authorizing payroll deductions of up to 10% of their cash
compensation during the offering period. The maximum number of shares which may
be purchased by any participating employee during any offering period is limited
to 960 shares (as adjusted by the Compensation Committee from time to time).
Unless the employee has previously withdrawn from the offering, his accumulated
payroll deductions will be used to purchase common stock on the last business
day of the period at a price equal to 85% of the fair market value of the common
stock on the first or last day of the offering period, whichever is lower. Under
applicable tax rules, an employee may purchase no more than $25,000 worth of
common stock in any calendar year. At December 31, 1996, no common stock has
been issued to date under the Purchase Plan.
14. Leases:
The Company operates from facilities it leases from a joint venture held by a
corporate officer. The Company accounts for the lease, which provides for
monthly rentals of approximately $69,000 through March 1997, as an operating
lease.
The Company incurred lease rental expense related to this lease agreement of
$839,000 for the years ended December 31, 1996 and 1995 and $628,000 for the
period March 14, 1994 through December 31, 1994.
In January 1996, the Company entered into a lease agreement with an unrelated
third party for a new corporate office facility. The Company anticipates moving
into its new facility on or about February 20, 1997. The lease agreement is for
ten years, with an option for five additional years, and includes a rental
acceleration at the end of the fifth and tenth years. Future minimum lease
payments under the facility lease are $1,227,000 per annum for 1997 through
2001.
The Company also entered into various noncancelable operating leases for
equipment. Lease rental expense related to these leases totaled $1,211,000 for
the year ended December 31, 1996; $889,000 for the year ended December 31, 1995
and $657,000 for the period March 14, 1994 through December 31, 1994. Future
minimum lease payments under operating leases for equipment in effect at
December 31, 1996 is $620,000 for 1997 with no current lease commitments
beyond 1997.
32 ANSYS, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
15. Royalty Agreements:
The Company entered into various renewable nonexclusive license agreements under
which the Company has been granted access to the licensor's patent technology
and the right to sell the patent technology in the Company's product line.
Royalties are payable to developers of the software at various rates and amounts
generally based upon unit sales or revenues. Royalty fees, which are included in
cost of sales, were approximately $450,000 for the year ended December 31, 1996
and $114,000 for the year ended December 31, 1995. There were no royalty fees
for the period March 14, 1994 through December 31, 1994.
16. Related Party Transactions:
In connection with his initial employment, the Company's Chief Executive
Officer purchased 626,000 restricted shares of common stock in July 1994 for a
cash purchase price of $250,000 with proceeds from a loan from the Company
evidenced by a promissory note bearing interest at 8.23% and maturing on July 8,
2006. The promissory note is collateralized by a pledge of the shares purchased
with the proceeds of the loan. The shares purchased by the Chief Executive
Officer vest on a monthly basis over a five-year period.
In addition, other officers of the Company purchased restricted shares of common
stock with proceeds from loans from the Company. The loans, which totaled
$24,000 in 1996 and $56,000 in 1995, have terms similar to the promissory note
described above.
17. Geographic Information:
Revenue by geographic area is as follows:
United Other Other
(in thousands) States Canada Germany Europe Japan International Total
- -------------------------------------------------------------------------------------------------------------
Year ended December 31, 1996 $22,624 $1,196 $4,674 $9,124 $6,248 $3,200 $47,066
Year ended December 31, 1995 17,951 771 4,021 8,242 6,055 2,576 39,616
Period from March 14, 1994
through December 31, 1994 11,728 522 2,560 5,540 4,680 1,224 26,254
- -------------------------------------------------------------------------------------------------------------
18. Commitments and Contingencies:
The Company had outstanding an irrevocable standby letter of credit in the
amount of $300,000 as of December 31, 1996. This letter of credit, which expires
September 30, 1998, collateralizes the Company's obligations to a third party
for future performance requirements under a contract. The fair value of the
letter of credit approximates the contract value based on the nature of the fee
arrangements with the issuing bank.
ANSYS, Inc. 33
QUARTERLY FINANCIAL INFORMATION, (UNAUDITED)
- --------------------------------------------------------------------------------
Fiscal Quarter Ended
---------------------------------------------------------
December 31, September 30, June 30, March 31,
(in thousands, except per share data) 1996 1996 1996 1996
- -----------------------------------------------------------------------------------------------------
Revenue $12,332 $12,661 $11,340 $10,733
Gross profit 11,082 11,258 9,800 9,538
Operating income 1,257 1,295 652 470
Net income (loss) after extraordinary item 823 1,066 (384) (201)
Net income (loss) per share after
extraordinary item .05 .06 (.04) (.02)
Common stock price per share(1)(2):
High 15.50 13.63 13.38 --
Low 11.00 10.25 11.75 --
- -----------------------------------------------------------------------------------------------------
Fiscal Quarter Ended
---------------------------------------------------------
December 31, September 30, June 30, March 31,
(in thousands, except per share data) 1995 1995 1995 1995
- -----------------------------------------------------------------------------------------------------
Revenue $11,529 $10,523 $ 9,338 $ 8,226
Gross profit 10,272 9,455 7,989 6,997
Operating income (loss) 703 1,412 69 (824)
Net income (loss) (134) 343 (604) (1,185)
Net income (loss) per share (.02) .02 (.06) (.11)
- -----------------------------------------------------------------------------------------------------
(1) The Company's common stock trades on the Nasdaq National Market tier of The
Nasdaq Stock market under the symbol: ANSS. The common stock prices shown
are based on the Nasdaq daily closing stock price.
(2) Effective June 20, 1996, the Company completed its Initial Public Offering
of 3,500,000 shares of common stock at $13.00 per share.
The Company has not paid cash dividends on its common stock as it has retained
earnings for use in its business. The Company intends to review its policy with
respect to the payment of dividends from time to time, however, there can be no
assurance that any dividends will be paid in the future.
On March 3, 1997, there were 300 shareholders of record and approximately 2,352
beneficial shareholders of the Company's common stock.
34 ANSYS, Inc.
CORPORATE INFORMATION
- --------------------------------------------------------------------------------
Officers and Senior Management
Peter J. Smith
Chairman of the Board of Directors, President,
and Chief Executive Officer
Dr. John A. Swanson
Chief Technologist
John M. Sherbin II
Chief Financial Officer; Vice President,
Finance and Administration; Secretary
Paul A. Johnson
Vice President, Product Development
Dr. Shah M. Yunus
Corporate Fellow
Dr. Joseph S. Solecki
Corporate Fellow
Paul A. Chilensky
Vice President, Customer Service
David Conover
Manager, Product Development
Mark C. Imgrund
Vice President, Corporate Quality
Carol A. Michaels
Corporate Counsel
Richard C. Miller
Vice President and General Manager, DesignSpace
Scott D. Owens
Vice President, Marketing
James C. Tung
Vice President, International Sales
Leonard Zera
Vice President, North American Sales
Headquarters
ansysinfo@ansys.com
T 412.746.3304
F 412.514.9494
Toll Free USA and Canada:
1.800.WE.R.FEA.1
Toll Free Mexico:
95.800.9373321
Regional Offices
North America
len.zera@ansys.com
T 810.585.5020
F 810.585.5730
International
jim.tung@ansys.com
T 412.514.3086
F 412.514.3115
Europe
brian.butcher@ansys.com
T 44.118.9880229
F 44.118.9880925
http://www.ansys.com
Shareholder Information
Requests for information about the Company should be
directed to: Investor Relations, ANSYS, Inc., 275 Technology Drive,
Canonsburg, PA 15317. Telephone: 412.514.1782.
Report on Form 10-K
Stockholders may obtain additional financial information about ANSYS, Inc.
from the Company's Report on Form 10-K filed with the Securities and Exchange
Commission. Copies are available from the Company without charge upon written
request.
Stock Listing
Nasdaq National Market Symbol: ANSS
Counsel
Goodwin, Procter, & Hoar L.L.P., Boston, MA
Buchanan Ingersoll Professional Corporation L.L.P.,
Pittsburgh, PA
Annual Meeting
The Annual Meeting of Stockholders will be held on May 7, 1997 at 2:00 P.M.
at ANSYS, Inc., 275 Technology Drive, Canonsburg, PA 15317.
Transfer Agent
Chase Mellon Shareholder Services, Ridgefield Park, NJ
Independent Accountants
Coopers & Lybrand L.L.P., Pittsburgh, PA
ANSYS, Inc. is an Equal Opportunity Employer. As such, it is the Company's
policy to promote equal employment opportunity and to prohibit discrimination
on the basis of race, color, religion, sex, age, national origin, disability,
or status as a veteran in all aspects of employment, including recruiting,
hiring, training, or promoting personnel. In fulfilling this commitment, the
Company shall comply with the letter and spirit of the laws, regulations, and
Executive Orders governing equal opportunity in employment, including the Civil
Rights Act of 1964, Executive Order 11246, Revised Order Number 4 and
amendments thereto.
ANSYS is a registered trademark and ANSYS/AutoFEA and DesignSpace are trademarks
of SAS IP, Inc., a wholly owned subsidiary of ANSYS, Inc. All other trademarks
and registered trademarks are the property of their respective owners.
Design: BD&E, Inc., Pittsburgh.