================================================================================
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): November 3, 2005
----------
ANSYS. INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-20853 04-3219960
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) 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
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
================================================================================
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 November 3, 2005, ANSYS, Inc. issued an earnings release announcing
its financial results for the third quarter ended September 30, 2005. 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 November 3, 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: November 3, 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 REPORTS BEST THIRD QUARTER IN COMPANY HISTORY WITH
CONTINUED STRONG INCREASES IN REVENUE AND EARNINGS
COMPANY RAISES OUTLOOK FOR 2005
SOUTHPOINTE, Pa., Nov. 3 /PRNewswire-FirstCall/ -- ANSYS, Inc.
(Nasdaq: ANSS), a global innovator of simulation software and technologies
designed to optimize product development processes, today announced third
quarter 2005 results. ANSYS' third quarter GAAP results include:
- Total revenue of $39.0 million, as compared to $32.3 million in the
third quarter of 2004; total revenue of $114.3 million in the first nine
months of 2005 as compared to $95.7 million for the nine months ended
September 30, 2004;
- Net income of $11.2 million, as compared to $7.6 million in the third
quarter of 2004; net income of $30.6 million in the first nine months of
2005 as compared to $22.3 million for the first nine months of 2004;
- An operating profit margin of 36.7% as compared to 32.4% for the third
quarter of 2004; an operating profit margin of 35.9% as compared to
32.5% for the first nine months of 2004;
- Diluted earnings per share of $0.33, as compared to $0.23 for the third
quarter of 2004; diluted earnings per share of $0.91 through September
30, 2005 as compared to $0.68 for the first nine months of 2004;
- Cash flows from operations of $14.2 million for the third quarter of
2005 and $47.1 million for the first nine months of 2005; and
- Cash and short-term investment balances totaling $174.5 million as of
September 30, 2005.
Excluding acquisition-related amortization, ANSYS' third quarter adjusted
(non-GAAP) results include:
- An adjusted operating profit margin of 39.4% as compared to 35.1% for
the third quarter of 2004; an adjusted operating profit margin of 38.8%
as compared to 35.3% for the first nine months of 2004; and
- Adjusted diluted earnings per share of $0.35 as compared to $0.25 for
the third quarter of 2004; and adjusted diluted earnings per share of
$0.97 as compared to $0.73 for the nine-month period ended September 30,
2004.
Third Quarter 2005 Tax Benefit:
The GAAP and adjusted results summarized above include a third quarter tax
benefit of $500,000 related to the completion and filing of the Company's 2004
federal and state tax returns. This benefit had the effect of increasing net
income by approximately $500,000 in the 2005 third quarter and year-to-date
results.
"This quarter marked yet another period of strong revenue and earnings
growth for the Company," said ANSYS President and CEO Jim Cashman. "As a leader
in our industry, we remain focused on the overall direction and health of the
business. Looking ahead, our energy and resources will be dedicated to expanding
our global markets at a significant pace and striving to develop and deliver
innovative engineering simulation solutions to our customers."
Mr. Cashman continued, "Our growth in the third quarter continued to be
spread across all major geographic regions and among a broad array of
industries. We believe that our success is a result of the mounting competitive
and market pressures that our customers and businesses, in general, are facing.
Our solutions enable customers who are driven to find new ways to create more
innovative, higher quality products, to deliver them to market faster and to
minimize development and warranty costs."
During the third quarter of 2005, ANSYS repurchased approximately 115,000
shares at a total cost of $4.4 million. As of September 30, 2005, 2.0 million
shares remain authorized for repurchase under the Company's stock repurchase
program.
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 months and nine months ended September 30, is included
in the condensed financial information included in this release.
Adjustments to Reported GAAP Financial Results
- Acquisition-Related Amortization:
As previously announced, the Company completed its acquisition of Century
Dynamics, Inc. in January 2005. In previous years, the Company also acquired
CFX, CADOE S.A. and ICEM CFD Engineering. These acquisitions have all been
accounted for as purchases, resulting in the recording of a significant amount
of 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
acquisition-related amortization. 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 Remainder 2005 and Initial 2006 Outlook
Based on anticipated revenues and expenditures for the remainder of 2005,
the Company currently projects that fourth quarter 2005 diluted earnings per
share, adjusted to exclude acquisition-related amortization, will be in the
range of $0.35 to $0.36 based on revenues of $40 to $42 million. The Company's
current outlook relative to 2005 fourth quarter GAAP diluted earnings per share
estimate will be in the range of $0.33 to $0.34.
The Company currently projects that 2006 fiscal year adjusted diluted
earning per share will be in the range of $1.45 to $1.47 based on revenues of
$175 to $178 million. The preceding estimates do not reflect expenses associated
with employee stock options. The Company expects to begin recording stock option
expense effective January 1, 2006 in accordance with recent guidance issued by
the Securities and Exchange Commission.
Adjusted diluted earnings per share is a supplemental non-GAAP financial
measure. Due to the ongoing implementation of Statement of Financial Accounting
Standards 123R and the uncertainties related to the magnitude of the Company's
equity-based compensation expense during fiscal 2006, we are not able to
estimate at this time the magnitude of the impact of equity-based compensation
expense on our adjusted diluted earnings per share for the 2006 fiscal year.
Adjusted diluted earnings per share should not be considered as a substitute for
net income per diluted share determined in accordance with GAAP.
ANSYS will hold a conference call at 10:30 Eastern Time on November 3, 2005
to discuss third quarter results as well as to provide guidance regarding
business prospects. The dial in number is 800-811-8830 or 913-981-4904 and the
passcode is "ANSYS." A replay will be available until August 10, by dialing
888-203-1112 or 719-457-0820 and the passcode is "ANSYS" or "26797". 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
http://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. The Company 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.
The Company and its global network of channel partners provide sales, support
and training for customers. Headquartered in Canonsburg, Pennsylvania U.S.A.
with more than 25 strategic sales locations throughout the world, ANSYS, Inc.
and its subsidiaries employ approximately 600 people and distribute ANSYS
products through a network of channel partners in over 40 countries. Visit
http://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
the fourth quarter and full year revenue growth and earnings per share,
projections for 2006 and statements regarding the focus of our energy and
resources 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 2004
Annual Report and Form 10-K. We undertake no obligation to publicly update or
revise any forward- looking statements, whether changes occur as a result of new
information or future events after the date they were made.
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 operating profit margin and adjusted diluted earnings per share are
discussed in this earnings release because management uses this information in
evaluating the results of the continuing operations of the 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 Nine months ended
----------------------- -----------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenue:
Software licenses $ 20,978 $ 16,585 $ 61,247 $ 49,262
Maintenance and service 18,057 15,733 53,068 46,390
Total revenue 39,035 32,318 114,315 95,652
Cost of sales:
Software licenses 1,334 1,162 3,747 3,678
Amortization of software
and acquired technology 877 758 2,665 2,267
Maintenance and service 3,822 3,521 11,476 9,649
Total cost of sales 6,033 5,441 17,888 15,594
Gross profit 33,002 26,877 96,427 80,058
Operating expenses:
Selling and marketing 6,432 5,757 19,003 17,843
Research and development 7,667 6,611 22,486 19,441
Amortization 298 285 1,009 857
General and administrative 4,276 3,763 12,851 10,808
Total operating
expenses 18,673 16,416 55,349 48,949
Operating income 14,329 10,461 41,078 31,109
Other income 1,141 415 2,800 791
Income before income tax
provision 15,470 10,876 43,878 31,900
Income tax provision 4,296 3,277 13,246 9,584
Net income $ 11,174 $ 7,599 $ 30,632 $ 22,316
Earnings per share - basic:
Basic earnings per share $ 0.35 $ 0.24 $ 0.97 $ 0.72
Weighted average shares
- basic 31,851 31,075 31,670 30,835
Earnings per share - diluted:
Diluted earnings per share $ 0.33 $ 0.23 $ 0.91 $ 0.68
Weighted average shares
- diluted 33,922 33,231 33,667 32,895
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended September 30, 2005
(in thousands, except per share data)
(Unaudited)
As Adjusted
Reported Adjustments Results
------------ ------------ ------------
Revenue:
Software licenses $ 20,978 - $ 20,978
Maintenance and service 18,057 - 18,057
Total revenue 39,035 - 39,035
Cost of sales:
Software licenses 1,334 - 1,334
Amortization of software
and acquired technology 877 (745)(a) 132
Maintenance and service 3,822 - 3,822
Total cost of sales 6,033 (745) 5,288
Gross profit 33,002 745 33,747
Operating expenses:
Selling and marketing 6,432 - 6,432
Research and development 7,667 - 7,667
Amortization 298 (298)(a) -
General and administrative 4,276 - 4,276
Total operating
expenses 18,673 (298) 18,375
Operating income 14,329 1,043 15,372
Other income 1,141 - 1,141
Income before income tax
provision 15,470 1,043 16,513
Income tax provision 4,296 364(b) 4,660
Net income $ 11,174 $ 679 $ 11,853
Earnings per share - basic:
Basic earnings per share $ 0.35 $ 0.37
Weighted average shares
- basic 31,851 31,851
Earnings per share - diluted:
Diluted earnings per share $ 0.33 $ 0.35
Weighted average shares
- diluted 33,922 33,922
(a) Amount represents amortization expense associated with intangible assets
acquired in business acquisitions, including amounts primarily related to
acquired software, customer list and non-compete agreements.
(b) Amount represents the income tax impact of the amortization expense
adjustments referred to in (a) above.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended September 30, 2004
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
------------ ------------ ------------
Revenue:
Software licenses $ 16,585 - $ 16,585
Maintenance and service 15,733 - 15,733
Total revenue 32,318 - 32,318
Cost of sales:
Software licenses 1,162 - 1,162
Amortization of software
and acquired technology 758 (610)(a) 148
Maintenance and service 3,521 - 3,521
Total cost of sales 5,441 (610) 4,831
Gross profit 26,877 610 27,487
Operating expenses:
Selling and marketing 5,757 - 5,757
Research and development 6,611 - 6,611
Amortization 285 (285)(a) -
General and administrative 3,763 - 3,763
Total operating expenses 16,416 (285) 16,131
Operating income 10,461 895 11,356
Other income 415 - 415
Income before income tax
provision 10,876 895 11,771
Income tax provision 3,277 314(b) 3,591
Net income $ 7,599 $ 581 $ 8,180
Earnings per share - basic:
Basic earnings per share $ 0.24 $ 0.26
Weighted average shares
- basic 31,075 31,075
Earnings per share - diluted:
Diluted earnings per share $ 0.23 $ 0.25
Weighted average shares
- diluted 33,231 33,231
(a) Amount represents amortization expense associated with intangible assets
acquired in business acquisitions, including amounts primarily related to
acquired software, customer list and non-compete agreements.
(b) Amount represents the income tax impact of the amortization expense
adjustments referred to in (a) above.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the nine months ended September 30, 2005
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
------------ ------------ ------------
Revenue:
Software licenses $ 61,247 - $ 61,247
Maintenance and service 53,068 - 53,068
Total revenue 114,315 - 114,315
Cost of sales:
Software licenses 3,747 - 3,747
Amortization of software
and acquired technology 2,665 (2,258)(a) 407
Maintenance and service 11,476 - 11,476
Total cost of sales 17,888 (2,258) 15,630
Gross profit 96,427 2,258 98,685
Operating expenses:
Selling and marketing 19,003 - 19,003
Research and development 22,486 - 22,486
Amortization 1,009 (1,009)(a) -
General and administrative 12,851 - 12,851
Total operating expenses 55,349 (1,009) 54,340
Operating income 41,078 3,267 44,345
Other income 2,800 - 2,800
Income before income tax
provision 43,878 3,267 47,145
Income tax provision 13,246 1,143 (b) 14,389
Net income $ 30,632 $ 2,124 $ 32,756
Earnings per share - basic:
Basic earnings per share $ 0.97 $ 1.03
Weighted average shares
- basic 31,670 31,670
Earnings per share - diluted:
Diluted earnings per share $ 0.91 $ 0.97
Weighted average shares
- diluted 33,667 33,667
(a) Amount represents amortization expense associated with intangible assets
acquired in business acquisitions, including amounts primarily related to
acquired software, customer list and non-compete agreements.
(b) Amount represents the income tax impact of the amortization expense
adjustments referred to in (a) above.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the nine months ended September 30, 2004
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
------------ ------------ ------------
Revenue:
Software licenses $ 49,262 - $ 49,262
Maintenance and service 46,390 - 46,390
Total revenue 95,652 - 95,652
Cost of sales:
Software licenses 3,678 - 3,678
Amortization of software
and acquired technology 2,267 (1,829)(a) 438
Maintenance and service 9,649 - 9,649
Total cost of sales 15,594 (1,829) 13,765
Gross profit 80,058 1,829 81,887
Operating expenses:
Selling and marketing 17,843 - 17,843
Research and development 19,441 - 19,441
Amortization 857 (857)(a) -
General and administrative 10,808 - 10,808
Total operating expenses 48,949 (857) 48,092
Operating income 31,109 2,686 33,795
Other income 791 - 791
Income before income tax
provision 31,900 2,686 34,586
Income tax provision 9,584 940(b) 10,524
Net income $ 22,316 $ 1,746 $ 24,062
Earnings per share - basic:
Basic earnings per share $ 0.72 $ 0.78
Weighted average shares - basic 30,835 30,835
Earnings per share - diluted:
Diluted earnings per share $ 0.68 $ 0.73
Weighted average shares
- diluted 32,895 32,895
(a) Amount represents amortization expense associated with intangible assets
acquired in business acquisitions, including amounts primarily related to
acquired software, customer list and non-compete agreements.
(b) Amount represents the income tax impact of the amortization expense
adjustments referred to in (a) above.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
September 30, December 31,
2005 2004
------------- ------------
ASSETS:
Cash & short-term investments $ 174,472 $ 138,446
Accounts receivable, net 16,448 18,792
Other assets 82,098 82,408
Total assets $ 273,018 $ 239,646
LIABILITIES & STOCKHOLDERS' EQUITY:
Deferred revenue $ 46,079 $ 43,906
Other liabilities 17,903 20,271
Stockholders' equity 209,036 175,469
Total liabilities & stockholders' equity $ 273,018 $ 239,646
SOURCE ANSYS, Inc.
-0- 11/03/2005
/CONTACT: Lisa O'Connor 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 /