================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): February 15, 2005 ---------- ANSYS. INC. (Exact Name of Registrant as Specified in its Charter) Delaware 0-20853 04-3219960 (State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Incorporation or Organization) Identification No.) 275 Technology Drive, Canonsburg, PA 15317 (Address of Principal Executive Offices) (Zip Code) (Registrant's Telephone Number, Including Area Code) (724) 746-3304 ================================================================================ITEM 2.02 REGULATION FD DISCLOSURE The Information contained in this Item of this Current Report on Form 8-K is being furnished pursuant to "Item 2.02. Results of Operations and Financial Condition" of Form 8-K. The information in this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. On February 15. 2005, ANSYS, Inc. issued an earnings release announcing its financial results for the fourth quarter ended December 31, 2004. A copy of the earnings release is attached as Exhibit 99.1 ITEM 9.01 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits EXHIBIT NUMBER DESCRIPTION ------- ------------------------------------------------------- 99.1 Press Release of the Registrant dated February 15, 2005
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. ANSYS, INC. (Registrant) Date: February 15, 2005 By: /s/ MARIA T. SHIELDS -------------------------------------------- Maria T. Shields - Chief Financial Officer, VP of Finance and Administration (Ms. Shields is the Principal Financial and Accounting Officer and has been duly authorized to sign on behalf of the Registrant)
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 /