================================================================================
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): June 5, 2006
----------
ANSYS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-20853 04-3219960
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) 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 (see General Instruction A.2. below):
[ ] 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 7.01 REGULATION FD DISCLOSURE.
On June 5, 2006, ANSYS, Inc. issued a press release updating its guidance
for the second quarter and full year of 2006. A copy of the press release is
attached as Exhibit 99.1.
In accordance with General Instruction B.2 of Form 8-K, the information in
this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to
be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to the liability of that
section, and shall not be incorporated by reference into any registration
statement or other document filed under the Securities Act of 1933, as amended,
or the Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
EXHIBIT
NUMBER DESCRIPTION
-------- --------------------------------------------------
99.1 Press Release of the Registrant dated June 5, 2006
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.
Date: June 5, 2006 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)
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- --------------- -------------------------------------------------------------
99.1 Press Release of the Registrant dated June 6, 2006
Exhibit 99.1
ANSYS PROVIDES UPDATED 2006 FINANCIAL GUIDANCE TO INCLUDE THE RECENT
ACQUISITION OF FLUENT
SOUTHPOINTE, Pa., June 5 /PRNewswire-FirstCall/ -- ANSYS, Inc. (Nasdaq:
ANSS), a global innovator of simulation software and technologies designed to
optimize product development processes, today announced additional financial
guidance for the second quarter and full year of 2006 to include the recently
completed acquisition of Fluent Inc.
Management's Financial Outlook
Based upon information currently available, the Company is providing its
updated revenue and diluted earnings per share guidance below. The revenue and
diluted earnings per share guidance is provided on both a GAAP basis and an
adjusted (non-GAAP) basis. Adjusted revenue excludes the adverse impact on
reported software license revenue of purchase accounting adjustments. Adjusted
diluted earnings per share excludes acquisition-related amortization, the
effects of stock-based compensation and one-time deal-related costs. A
description of each of these adjustments is provided further below.
Second Quarter 2006 Guidance
The Company currently expects the following for the quarter ending June 30,
2006:
- GAAP revenue of approximately $57 - $60 million
- Adjusted (non-GAAP) revenue of approximately $64 - $65 million
- GAAP diluted earnings per share of $0.07 - $0.15
- Adjusted (non-GAAP) diluted earnings per share of $0.36 - $0.37
The GAAP and adjusted diluted earnings per share estimates reflected above
include estimated interest expense of approximately $2 million, or $0.04
per share, for the second quarter of 2006.
Fiscal Year 2006 Guidance
The Company currently expects the following for the year ending December 31,
2006:
- GAAP revenue of approximately $248 - $257 million
- Adjusted (non-GAAP) revenue of approximately $268 - $274 million
- GAAP diluted earnings per share of $0.49 - $0.78
- Adjusted (non-GAAP) diluted earnings per share of $1.58 - $1.60
The GAAP and adjusted diluted earnings per share estimates reflected above
include estimated interest expense of approximately $9 million, or $0.14
per share, for the full year 2006.
Adjustments to Reported GAAP Financial Results
- Purchase Accounting Adjustment for Acquired Deferred Revenue:
As announced May 1, 2006, ANSYS acquired Fluent for 5,999,948 shares of its
common stock and approximately $299 million of net 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
that will be recorded on the opening balance sheet is currently anticipated to
be $17 - $23 million lower than the historical carrying value. Although this
purchase accounting requirement has no impact on the Company's business or cash
flow, it adversely impacts the Company's reported GAAP software license revenue
primarily for the first twelve months post-closing. In order to provide
investors with financial information that facilitates comparison on both
historical and future results, the Company intends to provide adjusted revenue
information, which excludes the impact of this purchase accounting adjustment,
through the twelve-month post-acquisition period.
- Acquisition-Related Amortization:
In addition to the recent acquisition of Fluent, the Company previously
disclosed the acquisitions of both Century Dynamics, Inc. and the assets of
Harvard Thermal, Inc. in 2005. In previous years, the Company also acquired
other businesses. These acquisitions have all been accounted for as purchases,
resulting in the recording of a significant amount of identifiable intangible
assets. As a result of the amortization associated with intangible assets
related to these acquisitions, ANSYS' quarterly and year-to-date GAAP financial
results are not comparable with prior periods.
- Stock-Based Compensation:
On January 1, 2006, the Company adopted SFAS No. 123R, "Share-Based
Payment." Accordingly, it records expenses and tax benefits related to stock-
based compensation. As a result, the GAAP estimates provided for diluted
earnings per share reflect the anticipated impact of stock-based compensation.
The Company issues both nonqualified and incentive stock options; however,
incentive stock options comprise a significant portion of outstanding stock
options. The tax benefits associated with incentive stock options are
unpredictable, as they are predicated upon an award recipient triggering an
event that disqualifies the award and which then results in a tax deduction to
the Company. GAAP requires that these tax benefits be recorded at the time of
the triggering event. The triggering events for each option holder are not
easily projected. In order to estimate the tax benefit related to incentive
stock options, the Company makes many assumptions and estimates, including the
number of incentive stock options that will be exercised during the period by
U.S. employees, the number of incentive stock options that will be disqualified
during the period and the fair market value of the Company's stock price on the
exercise dates. Each of these items is subject to significant uncertainty.
Additionally, a significant portion of the tax benefits related to disqualified
incentive stock options are accounted for as increases to equity (additional
paid-in capital) rather than as reductions in income tax expense, especially in
the periods most closely following the adoption date of Statement 123(R).
Although all such benefits continue to be realized through the Company's tax
filings, this accounting treatment has the effect of increasing tax expense and
reducing net income. For example, as previously reported, the Company realized a
tax benefit of $1.9 million during the first quarter of 2006 related to
disqualified incentive stock options; however, only $25,000 of such amount was
recorded as a reduction in income tax expense. Because there are significant
limitations in estimating the impact of FASB Statement 123(R), including those
discussed above, the actual impact of stock-based compensation on GAAP earnings
per share may differ materially from the estimated amounts included in the
Company's guidance.
- One-Time Deal Related Expenses:
The Company anticipates that it will incur costs associated with the initial
year of integration of the Fluent acquisition that are one-time in nature such
as accounting, tax and third-party consulting fees.
ANSYS is providing, and has historically provided, its 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 reporting periods that are not influenced by certain
non-cash items and are, therefore, useful to investors in helping them to better
understand the Company's fundamental operating results and underlying
operational trends. Management uses these non-GAAP financial measures internally
to evaluate the Company's business performance and plan for future periods;
however, these measures are not intended to supersede or replace the GAAP
results. Non-GAAP financial measures should be considered in addition to results
prepared in accordance with GAAP. As such, a reconciliation of the GAAP and
non-GAAP financial outlook measures is provided in this press release.
The financial outlook for the second quarter of 2006 and beyond is only
current as of today and the Company undertakes no obligation to update its
estimates. The Company is currently in the process of completing the valuation
and purchase accounting related to the Fluent acquisition, and intends to
provide further updated information relative to the Fluent acquisition and its
financial outlook in conjunction with the release of its second quarter
financial results.
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 40 strategic sales locations throughout the world, ANSYS, Inc.
and its subsidiaries employ approximately 1,400 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, but not limited to, the Company's views on
future financial projections for revenue growth and diluted earnings per share
(both GAAP and adjusted), the anticipated fair value of acquired deferred
software license revenue, the estimated impact of accounting for share-based
compensation and the estimated amount of one-time deal expenses, are
"forward-looking" statements (as defined in the Private Securities Litigation
Reform Act of 1995). All forward-looking statements in this press release are
subject to risks and uncertainties. Actual results could differ materially from
those contained in the forward-looking statements and are based on current
expectations that involve a number of risks and uncertainties, including, but
not limited to, the risk that the businesses of ANSYS and Fluent may not be
integrated successfully or that such integration may take longer or cost more to
accomplish than expected, that potential difficulties may arise in the
assimilation of operations, strategies, technologies and products of Fluent,
that key personnel of Fluent may not stay with ANSYS, and that management's
attention may be diverted from other business concerns during the integration
process. Additional risks 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, uncertainties regarding
fluctuations in quarterly results, 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 2005 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, FLUENT 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 press release contains non-GAAP financial measures as supplemental
measures to GAAP regarding the Company's operational performance. The Company
has historically reported similar financial measures to its investors and
believes that the inclusion of comparative numbers provides consistency in its
financial reporting.
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 registrant;
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. The GAAP measure most directly
comparable to non-GAAP adjusted revenue is revenue and the GAAP measure most
directly comparable to non-GAAP adjusted diluted earnings per share is diluted
earnings per share.
Non-GAAP adjusted revenue and non-GAAP adjusted diluted earnings per share
are discussed in this press release because management uses these financial
measures in evaluating the results of the continuing operations of the business
and to set internal plans. 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 that allows greater
transparency to supplemental information used by management in its financial and
operational decision making. In addition, the Company believes that the use of
these non-GAAP financial measures provides an additional tool for investors to
use in evaluating ongoing operating results and trends and in comparing its
financial results with other companies in the Company's industry, which present
similar non-GAAP financial measures to investors. 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.
Non-GAAP adjusted revenue and non-GAAP adjusted diluted earnings per share
reflect the actual revenue and diluted earnings per share without the effects of
(a) purchase accounting adjustments to deferred revenue, (b) amortization
expenses associated with intangible assets acquired in business acquisitions,
including amounts related to acquired software, customer list and non-compete
agreements, (c) stock-based compensation expense, (d) one-time deal-related
costs and (e) the tax impact related to such adjustments.
The Company incurs purchase accounting adjustments to deferred revenue,
amortization of intangibles and one-time deal costs related to various
acquisitions it has made, and stock-based compensation expense as part of its
ongoing operations, each of which are included in its GAAP presentation of
revenue (as applicable) and diluted earnings per share. Management excludes
these items, and their related tax impact, for the purposes of calculating
non-GAAP adjusted revenue and non-GAAP adjusted diluted earnings per share when
it evaluates the continuing operational performance of the Company. The Company
believes that eliminating these items from the related financial measure is
useful to investors because management believes the GAAP measure, alone, is not
indicative of the Company's core operating performance. Management excludes
purchase accounting adjustments to deferred revenue, the amortization of
intangibles and one-time deal-related costs related to various acquisitions it
has made, and the related tax impact even though such items have recurred in the
past and may recur in future periods because they are driven by events (such as
acquisitions) that occur sporadically. In addition, management believes that the
exclusion of stock-based compensation expense allows investors to better track
the performance of the Company without regard to distortive effects of, in the
case of its stock options, the settlement of an obligation that will not be made
in cash.
Non-GAAP financial measures are not in accordance with, or an alternative
for, generally accepted accounting principles in the United States. The
Company's non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for comparable GAAP measures.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Quarter Ending June 30, 2006
Revenue (in millions)
---------------------
U.S. GAAP revenue guidance $57.0 - $60.0
Adjustment to exclude purchase accounting
adjustments to deferred revenue 5.0 - 7.0
Adjusted revenue guidance $64.0 - $65.0
Earnings Per
Share Range -
Diluted
---------------------
U.S. GAAP diluted earnings per share guidance $0.07 - $0.15
Adjustment to exclude purchase accounting
adjustments to deferred revenue, net of tax 0.09 - 0.11
Adjustment to exclude acquisition-related
amortization, net of tax 0.10 - 0.14
Adjustment to exclude stock-based
compensation, net of tax 0.02 - 0.03
Adjustment to exclude one-time deal-related
costs, net of tax 0.01
Adjusted diluted earnings per share guidance $0.36 - $0.37
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Year Ending December 31, 2006
Revenue (in millions)
---------------------
U.S. GAAP revenue guidance $248.0 - $257.0
Adjustment to exclude purchase accounting
adjustments to deferred revenue 17.0 - 20.0
Adjusted revenue guidance $268.0 - $274.0
Earnings Per
Share Range -
Diluted
---------------------
U.S. GAAP diluted earnings per share guidance $0.49 - $0.78
Adjustment to exclude purchase accounting
adjustments to deferred revenue, net of tax 0.28 - 0.34
Adjustment to exclude acquisition-related
amortization, net of tax 0.40 - 0.56
Adjustment to exclude stock-based
compensation, net of tax 0.13 - 0.17
Adjustment to exclude one-time deal-related
costs, net of tax 0.01 - 0.02
Adjusted diluted earnings per share guidance $1.58 - $1.60
SOURCE ANSYS, Inc.
-0- 06/05/2006
/CONTACT: Lisa O'Connor of ANSYS, Inc., +1-724-514-1782, or
lisa.oconnor@ansys.com /
/Web site: http://www.ansys.com/
(ANSS)