Exhibit 99.1
ANSYS 2004 Momentum Continues as Company Announces Record Fourth Quarter
Results
SOUTHPOINTE, Pa., Feb. 15 /PRNewswire-FirstCall/ -- ANSYS, Inc. (Nasdaq:
ANSS), a global innovator of simulation software and technologies designed to
optimize product development processes, today announced new record highs for
revenues, operating profit, net income and earnings per share for fourth quarter
and annual 2004 results. ANSYS' fourth quarter and 2004 GAAP results include:
- Total revenue of $38.9 million, as compared to $33.3 million in the
fourth quarter of 2003; total revenue of $134.5 million in 2004 as
compared to $113.5 million in 2003;
- Diluted earnings per share of $0.36 for the fourth quarter of 2004
as compared to $0.22 for the fourth quarter of 2003. The fourth
quarter 2004 GAAP results include a one-time tax benefit of
approximately $1.1 million, or $.03 per share, which is further
described below;
- Diluted earnings per share of $1.05 in 2004 as compared to $0.67 in
2003;
- Cash flows from operations of $11.7 million for the fourth quarter
of 2004 and $51.4 million for 2004; and
- Cash and short-term investment balances of $138.4 million, and no
debt, as of December 31, 2004.
Excluding the adverse impact on reported software license revenue of
purchase accounting adjustments related to the Company's February 2003
acquisition of CFX, acquisition-related amortization and the one-time tax
benefit recorded in the 2004 fourth quarter (see discussion below), ANSYS'
fourth quarter adjusted (non-GAAP) results include:
- Total adjusted revenue of $39.0 million, as compared to $33.8
million in the fourth quarter of 2003; total adjusted revenue of
$134.9 million in 2004 as compared to $116.5 million in 2003;
- An overall adjusted operating profit margin, excluding acquisition-
related amortization, of 41% as compared to 35% for the fourth
quarter of 2003; and an overall adjusted profit margin, excluding
acquisition- related amortization, of 37% in 2004 as compared to
32% for 2003; and
- Adjusted diluted earnings per share of $0.35 (excluding the
one-time tax benefit) as compared to $0.25 for the fourth quarter
of 2003; and adjusted diluted earnings per share of $1.09 in 2004
as compared to $0.80 in 2003.
ANSYS President and CEO, Jim Cashman, commenting on the Company's fourth
quarter and 2004 results said, "We are extremely proud of the significant
milestones that were reached this past quarter, and which contributed to our
record financial performance. These include the expansion of several key,
long-term customer relationships that contributed significant incremental
software revenues for the quarter, as well as the release of ANSYS 9.0, an
important stride in the evolution of Workbench(TM) as a leading-edge tool for
simulation-driven, integrated product development."
Cashman further added, "During 2004, our global team executed with
confidence and reliability on a number of fronts that not only impacted our
short-term business performance, but, more importantly, continued to expand the
broad base and breadth of our business. These have been key elements to our
long-term, consistent performance and continue to serve as a solid foundation
for our future."
In closing, Cashman stated, "In addition to our solid core business, we
are also excited about our recent acquisition of Century Dynamics, Inc. ("CDI").
This technology will further strengthen our suite of engineering simulation
offerings, expand our global market presence and enable us to address a larger
percentage of the overall simulation needs of our existing and future customers'
virtual product development processes."
The adjusted results highlighted above, and the adjusted estimates for
2005 discussed below, represent non-GAAP (Generally Accepted Accounting
Principles) financial measures. A reconciliation of these measures to the
appropriate GAAP measures, for the three and twelve months ended December 31, is
included in the condensed financial information included in this release."
On August 5, 2004, the Company announced that its Board of Directors
approved a 2-for-1 stock split of the Company's common shares. The stock split
was payable in the form of a stock dividend and entitled each stockholder of
record at the close of business on September 3, 2004, to receive one share of
common stock for every outstanding share of common stock held on that date. The
stock dividend was distributed on October 4, 2004. The share data and earnings
per share data in this press release give effect to the stock split, applied
retroactively, to all periods presented.
Adjustments to Reported GAAP Financial Results
- One-Time Fourth Quarter 2004 Tax Benefit
The 2004 earnings include a one-time tax benefit in the fourth quarter
related to the successful resolution of outstanding governmental income tax
audits for the years 2001, 2002 and 2003. This benefit had the effect of
increasing net income by approximately $1.1 million and diluted earnings per
share by $0.03.
- 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
impacted the Company's reported GAAP software license revenue primarily 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 provided adjusted financial information, which excludes
the impact of the purchase accounting adjustment.
- Acquisition-Related Amortization:
As previously discussed, the Company completed its 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.
ANSYS is providing, and has historically provided, its current quarter
GAAP results as well as financial results that have been adjusted for the impact
of the items described above. The Company believes that these non-GAAP measures
supplement its consolidated GAAP financial statements as they provide a
consistent basis for comparison between quarters that are not influenced by
certain non-cash items and are therefore useful to investors in helping them to
better understand the Company's operating results. In certain instances, such as
when intangibles are acquired through business acquisitions or become fully
amortized, amortization expense associated with acquired intangibles also makes
period-to-period comparisons difficult because amortization expense may appear
in one period but not in the comparable period. Management uses these non-GAAP
financial measures internally to evaluate the Company's business performance,
however, these measures are not intended to supersede or replace the GAAP
results.
Management's 2005 Outlook
Based on anticipated revenues and expenditures for 2005, the Company
currently projects that full year 2005 diluted earnings per share, adjusted to
exclude acquisition-related amortization and expenses related to stock-based
compensation, will be in the range of $1.15 to $1.18. The Company's current
outlook relative to a GAAP diluted earnings per share estimate will be in the
range of $1.00 to $1.06. This range is wider than that provided for adjusted
diluted earnings per share because the Company has not yet completed the
purchase accounting for its most recent acquisition of Century Dynamics, Inc.
The inherent imprecision in the expense estimates for stock-based compensation
also affect this estimate. The Company expects to refine the estimate for GAAP
diluted earnings per share during the first quarter and will provide an update
in conjunction with its first quarter 2005 earnings release.
ANSYS will hold a conference call at 10:30 Eastern Time on February 15,
to discuss fourth quarter results as well as to provide guidance regarding
business prospects. The dial in number is 888-552-9191 and the passcode is
"ANSYS". A replay will be available until February 22, by dialing 800-283-3707.
The conference call will be webcast live as well as archived and can be
accessed, along with other financial information, on ANSYS' website, located at
www.ansys.com/corporate/investors.asp .
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 more than 25 strategic
sales locations throughout the world, ANSYS, Inc. employs approximately 600
people and distributes its products through a network of channel partners in
over 40 countries. Visit www.ansys.com for more information.
Certain statements contained in the press release regarding matters that
are not historical facts, including statements regarding our current estimates
for full year earnings per share and expectations regarding the Century
Dynamics, Inc. acquisition, are "forward-looking" statements (as defined in the
Private Securities Litigation Reform Act of 1995). Because such statements are
subject to risks and uncertainties, actual results may differ materially from
those expressed or implied by such forward-looking statements. All
forward-looking statements in this press release are subject to risks and
uncertainties. These include the risk of a general economic downturn in one or
more of ANSYS' primary geographic markets, the risk that the assumptions
underlying ANSYS' anticipated revenues and expenditures will change or prove
inaccurate, the risk that ANSYS has overestimated its ability to maintain growth
and profitability and control costs, 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,
risks of problems arising from customer contract cancellations, uncertainties
regarding customer acceptance of new products, 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 may not produce anticipated sales, uncertainties regarding fluctuations
in quarterly results, including uncertainties regarding the timing of orders
from significant customers, 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 2003 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 channel partners 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, ANSYS Workbench, CFX, AUTODYN, and any and all ANSYS, Inc.
product and service names are registered trademarks or trademarks of ANSYS, Inc.
or its subsidiaries located in the United States or other countries. ICEM CFD is
a trademark licensed by ANSYS, Inc. All other trademarks or registered
trademarks are the property of their respective owners.
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 and allows greater
transparency to supplemental information used by management in its financial and
operational decision making. Management encourages investors to review the
reconciliations of the non-GAAP financial measures to the most directly
comparable GAAP measures that are provided within the financial information
attached to this news release.
ANSYS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
Three months ended Twelve months ended
--------------------------- ---------------------------
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenue:
Software licenses $ 22,064 $ 17,951 $ 71,326 $ 58,408
Maintenance and
service 16,823 15,303 63,213 55,127
Total revenue 38,887 33,254 134,539 113,535
Cost of sales:
Software licenses 1,162 1,492 4,840 5,365
Amortization of software
and acquired technology 763 726 3,030 3,028
Maintenance and service 3,788 3,330 13,437 13,112
Total cost of sales 5,713 5,548 21,307 21,505
Gross profit 33,174 27,706 113,232 92,030
Operating expenses:
Selling and marketing 7,141 7,523 24,984 24,777
Research and development 6,840 6,183 26,281 23,792
Amortization 292 281 1,149 1,055
General and
administrative 4,032 3,291 14,840 12,089
Total operating
expenses 18,305 17,278 67,254 61,713
Operating income 14,869 10,428 45,978 30,317
Other income (expense) 1,132 (141) 1,923 357
Income before income tax
provision 16,001 10,287 47,901 30,674
Income tax provision 3,750 3,086 13,334 9,361
Net income $ 12,251 $ 7,201 $ 34,567 $ 21,313
Earnings per share
- basic(a):
Basic earnings per share $ 0.39 $ 0.24 $ 1.12 $ 0.71
Weighted average shares
- basic 31,315 30,478 30,955 29,916
Earnings per share
- diluted(a):
Diluted earnings per
share $ 0.36 $ 0.22 $ 1.05 $ 0.67
Weighted average shares
- diluted 33,587 32,796 32,978 31,876
(a) The share data and earnings per share data in this press release give
effect for the two-for-one stock split, applied retroactively, to all
periods presented.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended December 31, 2004
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
------------ ------------ ------------
Revenue:
Software licenses $ 22,064 $ 65(a) $ 22,129
Maintenance and service 16,823 - 16,823
Total revenue 38,887 65 38,952
Cost of sales:
Software licenses 1,162 - 1,162
Amortization of software and
acquired technology 763 (635)(b) 128
Maintenance and service 3,788 - 3,788
Total cost of sales 5,713 (635) 5,078
Gross profit 33,174 700 33,874
Operating expenses:
Selling and marketing 7,141 - 7,141
Research and development 6,840 - 6,840
Amortization 292 (292)(b) -
General and administrative 4,032 - 4,032
Total operating expenses 18,305 (292) 18,013
Operating income 14,869 992 15,861
Other income 1,132 - 1,132
Income before income tax provision 16,001 992 16,993
Income tax provision 3,750 1,397(c) 5,147
Net income $ 12,251 $ (405) $ 11,846
Earnings per share - basic(d):
Basic earnings per share $ 0.39 $ 0.38
Weighted average shares
- basic 31,315 31,315
Earnings per share - diluted(d):
Diluted earnings per share $ 0.36 $ 0.35
Weighted average shares
- diluted 33,587 33,587
(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, as well as the
exclusion of a one-time tax benefit ($1,050) related to the resolution
of outstanding governmental income tax audits.
(d) The share data and earnings per share data in this press release give
effect for the two-for-one stock split, applied retroactively, to all
periods presented.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended December 31, 2003
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
------------ ------------ ------------
Revenue:
Software licenses $ 17,951 $ 545(a) $ 18,496
Maintenance and service 15,303 - 15,303
Total revenue 33,254 545 33,799
Cost of sales:
Software licenses 1,492 - 1,492
Amortization of software and
acquired technology 726 (621)(b) 105
Maintenance and service 3,330 - 3,330
Total cost of sales 5,548 (621) 4,927
Gross profit 27,706 1,166 28,872
Operating expenses:
Selling and marketing 7,523 - 7,523
Research and development 6,183 - 6,183
Amortization 281 (281)(b) -
General and administrative 3,291 - 3,291
Total operating expenses 17,278 (281) 16,997
Operating income 10,428 1,447 11,875
Other income (expense) (141) - (141)
Income before income tax provision 10,287 1,447 11,734
Income tax provision 3,086 506(c) 3,592
Net income $ 7,201 $ 941 $ 8,142
Earnings per share - basic(d):
Basic earnings per share $ 0.24 $ 0.27
Weighted average shares
- basic 30,478 30,478
Earnings per share - diluted(d):
Diluted earnings per share $ 0.22 $ 0.25
Weighted average shares
- diluted 32,796 32,796
(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.
(d) The share data and earnings per share data in this press release give
effect for the two-for-one stock split, applied retroactively, to all
periods presented.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the twelve months ended December 31, 2004
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
------------ ------------ ------------
Revenue:
Software licenses $ 71,326 $ 323(a) $ 71,649
Maintenance and service 63,213 - 63,213
Total revenue 134,539 323 134,862
Cost of sales:
Software licenses 4,840 - 4,840
Amortization of software and
acquired technology 3,030 (2,464)(b) 566
Maintenance and service 13,437 - 13,437
Total cost of sales 21,307 (2,464) 18,843
Gross profit 113,232 2,787 116,019
Operating expenses:
Selling and marketing 24,984 - 24,984
Research and development 26,281 - 26,281
Amortization 1,149 (1,149)(b) -
General and administrative 14,840 - 14,840
Total operating expenses 67,254 (1,149) 66,105
Operating income 45,978 3,936 49,914
Other income 1,923 - 1,923
Income before income tax provision 47,901 3,936 51,837
Income tax provision 13,334 2,427(c) 15,761
Net income $ 34,567 $ 1,509 $ 36,076
Earnings per share - basic(d):
Basic earnings per share $ 1.12 $ 1.17
Weighted average shares
- basic 30,955 30,955
Earnings per share - diluted(d):
Diluted earnings per share $ 1.05 $ 1.09
Weighted average shares
- diluted 32,978 32,978
(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, as well as the
exclusion of a one-time tax benefit ($1,050) related to the resolution
of outstanding governmental income tax audits.
(d) The share data and earnings per share data in this press release give
effect for the two-for-one stock split, applied retroactively, to all
periods presented.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the twelve months ended December 31, 2003
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
------------ ------------ ------------
Revenue:
Software licenses $ 58,408 $ 3,000(a) $ 61,408
Maintenance and service 55,127 - 55,127
Total revenue 113,535 3,000 116,535
Cost of sales:
Software licenses 5,365 - 5,365
Amortization of software and
acquired technology 3,028 (2,446)(b) 582
Maintenance and service 13,112 - 13,112
Total cost of sales 21,505 (2,446) 19,059
Gross profit 92,030 5,446 97,476
Operating expenses:
Selling and marketing 24,777 - 24,777
Research and development 23,792 - 23,792
Amortization 1,055 (1,055)(b) -
General and administrative 12,089 - 12,089
Total operating expenses 61,713 (1,055) 60,658
Operating income 30,317 6,501 36,818
Other income 357 - 357
Income before income tax provision 30,674 6,501 37,175
Income tax provision 9,361 2,275(c) 11,636
Net income $ 21,313 $ 4,226 $ 25,539
Earnings per share - basic(d):
Basic earnings per share $ 0.71 $ 0.85
Weighted average shares
- basic 29,916 29,916
Earnings per share - diluted(d):
Diluted earnings per share $ 0.67 $ 0.80
Weighted average shares
- diluted 31,876 31,876
(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.
(d) The share data and earnings per share data in this press release give
effect for the two-for-one stock split, applied retroactively, to all
periods presented.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
December 31, December 31,
2004 2003
------------ ------------
ASSETS:
Cash & short-term investments $ 138,446 $ 83,014
Accounts receivable, net 18,792 20,028
Other assets 82,408 77,517
Total assets $ 239,646 $ 180,559
LIABILITIES & STOCKHOLDERS' EQUITY:
Deferred revenue $ 43,906 $ 37,874
Other liabilities 20,271 15,611
Stockholders' equity 175,469 127,074
Total liabilities & stockholders' equity $ 239,646 $ 180,559
SOURCE ANSYS, Inc.
-0- 02/15/2005
/CONTACT: Lisa M. O'Connor, Treasurer of ANSYS, Inc., +1-724-514-1782, or
lisa.oconnor@ansys.com /
/Web site: http://www.ansys.com
http://www.ansys.com/corporate/investors.asp /