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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): August 3, 2006
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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 (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))
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On August 3, 2006, ANSYS, Inc. issued an earnings release announcing
its financial results for the second quarter ended June 30, 2006. A copy of the
earnings 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 August 3, 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: August 3, 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
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99.1 Press Release of the Registrant dated August 3, 2006
Exhibit 99.1
ANSYS, INC. REPORTS SECOND QUARTER 2006 FINANCIAL RESULTS
- Announces Results for Highly Successful Quarter
- Closes Fluent Acquisition and Makes Significant Integration Progress
SOUTHPOINTE, Pa., Aug. 3 /PRNewswire-FirstCall/ -- ANSYS, Inc. (Nasdaq:
ANSS), a global innovator of simulation software and technologies designed to
optimize product development processes, today announced a new Company record for
quarterly non-GAAP operating results and increased its 2006 non-GAAP guidance.
On May 1, 2006, ANSYS successfully completed its acquisition of Fluent Inc.
"This quarter was a historic one for ANSYS and for all of our stockholders,
employees, customers and partners, as we completed the transforming acquisition
of Fluent," stated ANSYS President and CEO, Jim Cashman. "We are optimistic that
this initial quarterly report today, which includes two months of operations as
a combined company, is only the beginning as we continue to focus and execute on
our integration plan and long-term strategy for the Company. Compared to a year
ago, this quarter's non-GAAP revenues increased in excess of 80% while non-GAAP
diluted earnings per share increased 29%. We continue to maintain a strong
balance sheet, ending the quarter with a new all-time high deferred revenue
balance of $95.4 million. As a result of the success of the quarter and the
current prospects for the remainder of the year, I am pleased to also announce
that we are increasing our non-GAAP guidance for 2006."
ANSYS' second quarter and year-to-date 2006 financial results are presented
below. ANSYS' 2006 second quarter GAAP results are heavily impacted by a
one-time charge of $28.1 million related to in-process research and development
associated with the recent acquisition of Fluent. The non-GAAP results include,
for the first time, charges for stock-based compensation, and exclude the income
statement effects of purchase accounting for deferred revenue,
acquisition-related amortization of intangible assets and the one- time acquired
in-process research and development charge. Non-GAAP and GAAP results reflect:
- Total non-GAAP revenue of $68.2 million as compared to $37.7 million
in the second quarter of 2005; total non-GAAP revenue of $114.2
million in the first six months of 2006 as compared to $75.3 million
in the first six months of 2005; total GAAP revenue of $62.3 million
as compared to $37.7 million in the second quarter of 2005; total GAAP
revenue of $108.3 million in the first six months of 2006 as compared
to $75.3 million in the first six months of 2005;
- A non-GAAP operating profit margin of 36.3% as compared to 38.4% in
the second quarter of 2005; a non-GAAP operating profit margin of
38.1% in the first six months of 2006 as compared to 38.5% in the
first six months of 2005; a GAAP operating profit margin of (23.3)% as
compared to 35.4% in the second quarter of 2005; a GAAP operating
profit margin of 3.1% in the first six months of 2006 as compared to
35.5% in the first six months of 2005;
- Non-GAAP net income of $15.4 million as compared to $10.5 million in
the second quarter of 2005; non-GAAP net income of $29.0 million in
the first six months of 2006 as compared to $20.9 million in the first
six months of 2005; a GAAP net loss of $19.4 million as compared to
GAAP net income of $9.8 million in the second quarter of 2005; a GAAP
net loss of $6.5 million in the first six months of 2006 as compared
to GAAP net income of $19.5 million in the first six months of 2005;
and
- Non-GAAP diluted earnings per share of $0.40 as compared to $0.31 in
the second quarter of 2005; non-GAAP diluted earnings per share of
$0.80 in the first six months of 2006 as compared to $0.62 in the
first six months of 2005; a GAAP diluted loss per share of ($0.53) as
compared to GAAP diluted earnings per share of $0.29 in the second
quarter of 2005; a GAAP diluted loss per share of ($0.19) in the first
six months of 2006 as compared to GAAP diluted earnings per share of
$0.58 in the first six months of 2005.
The Company's GAAP and non-GAAP results reflect stock-based compensation
charges related to the January 1, 2006 adoption of SFAS No. 123R "Accounting for
Stock-Based Compensation" of approximately $1.0 million or $0.03 diluted
earnings per share for the second quarter of 2006 and approximately $2.0 million
or $0.06 diluted earnings per share for the first six months of 2006. Because
the Company elected prospective adoption of SFAS No. 123R, as permitted by SFAS
No. 123R, the 2005 results do not reflect charges for stock- based compensation.
The non-GAAP financial results highlighted above, and the non-GAAP
financial outlook for 2006 discussed below, represent non-GAAP financial
measures. A reconciliation of these measures to the appropriate GAAP measures,
for the three months and six months ended June 30, is included in the condensed
financial information included in this release.
Commenting on the Company's integration of Fluent, Cashman stated, "I am
very encouraged by our integration accomplishments in these first few months and
wish to express my sincere appreciation to both teams for their tireless
efforts, dedication and cooperation in this important effort as we continue to
build upon the foundation for expanding our role as the global leader in
engineering simulation."
In addition to the May 2006 acquisition of Fluent, other recent partnership
and industry recognition highlights for the Company include:
- Being named among FORTUNE Small Business Fastest-Growing Companies for
the third consecutive year.
- Announcing collaboration with Granta Design Ltd., the leader in
materials information management, to allow interoperability within
ANSYS and Granta's systems to empower product design.
- Being recognized for the fifth consecutive year in Business 2.0's
Annual 'B2 100' Ranking of Fastest-Growing Tech Companies.
- Announcing a partnership with MatWeb, allowing integration with
ANSYS(R) Workbench(TM), which expands material property data available
to ANSYS software users.
"Looking ahead," Cashman stated, "as we continue to build on the momentum
and strength of the first half results of 2006 and with the integration efforts
well underway, we believe that we are poised for the next exciting phase in
ANSYS' history and are increasing the Company's non-GAAP outlook for 2006. While
we are excited for the second half of the year, we are even more optimistic
about the opportunities for ANSYS in the years to come. We are committed to
focusing our efforts and resources to respond to our customers' increasing needs
and to building for the future."
Management's Financial Outlook
The Company has provided its 2006 revenue and earnings per share guidance
below. The revenue and earnings per share guidance is provided on both a GAAP
basis and a non-GAAP basis. Non-GAAP revenue and non-GAAP diluted earnings per
share exclude the income statement effects of purchase accounting for deferred
revenue, acquisition-related amortization of intangible assets and acquired
in-process research and development. In previous quarters, the Company's
non-GAAP guidance also excluded estimated stock-based compensation costs. For
the first time, the Company's non-GAAP results for the second quarter 2006 and
the financial outlook for the third quarter and future periods include the
effect of stock-based compensation.
As required by FASB Statement 123(R) and recent guidance issued by the
Securities and Exchange Commission, effective January 1, 2006, the Company
records expenses and tax benefits related to stock-based compensation. As a
result, the GAAP and non-GAAP estimates for earnings per share provided below
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 is accounted
for as an increase to equity (additional paid-in capital) rather than as a
reduction 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, the Company realized a tax benefit of $2.7 million during the first six
months of 2006 related to disqualified incentive stock options; however, only
$46,000 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 guidance below.
Third Quarter 2006 Guidance
The Company currently expects the following for the quarter ending
September 30, 2006:
- GAAP revenue of approximately $68 - $69 million
- Non-GAAP revenue of approximately $75 - $76 million
- GAAP diluted earnings per share of $0.12 - $0.15
- Non-GAAP diluted earnings per share of $0.35 - $0.36
Fiscal Year 2006 Guidance
The Company currently expects the following for the fiscal year ending
December 31, 2006:
- GAAP revenue in the range of $252 - $257 million
- Non-GAAP revenue of approximately $270 - $275 million
- GAAP diluted earnings per share of $0.17 - $0.24
- Non-GAAP diluted earnings per share of $1.53 - $1.55
The above guidance includes the impact of the May 1, 2006 acquisition of
Fluent from the date of acquisition. Non-GAAP revenue and diluted earnings per
share is a supplemental financial measure and should not be considered as a
substitute for, or superior to, revenue and diluted earnings per share
determined in accordance with GAAP.
ANSYS will hold a conference call at 10:30 a.m. Eastern Time on August 3,
2006 to discuss second quarter results. To participate in the live conference
call, dial 913-312-1279 or 800-829-9048 and enter the passcode "ANSYS" or
"26797". The call will be recorded and a replay will be available approximately
two hours after the call ends. The replay will be available for one week by
dialing 719-457-0820 or 888-203-1112 and entering the passcode "ANSYS" or
"26797". The archived webcast can be accessed, along with other financial
information, on ANSYS' website at http://www.ansys.com/corporate/investors.asp.
Use of Non-GAAP Measures
The Company provides non-GAAP revenue, non-GAAP operating income, non-GAAP
operating profit margin, non-GAAP net income and non-GAAP diluted earnings per
share as supplemental measures to GAAP regarding the Company's operational
performance. These financial measures exclude the impact of certain items and,
therefore, have not been calculated in accordance with GAAP. A detailed
explanation of each of the adjustments to such financial measures is described
below. This press release also contains a reconciliation of each of these
non-GAAP financial measures to its most comparable GAAP financial measure.
Management uses non-GAAP financial measures (a) to evaluate the Company's
historical and prospective financial performance as well as its performance
relative to its competitors, (b) to set internal sales targets and spending
budgets, (c) to allocate resources, (d) to measure operational profitability and
the accuracy of forecasting, (e) to assess financial discipline over operational
expenditures and (f) as an important factor in determining variable compensation
for management and its employees. In addition, many financial analysts that
follow our Company focus on and publish both historical results and future
projections based on non-GAAP financial measures. We believe that it is in the
best interest of our investors to provide this information to analysts so that
they accurately report the non- GAAP financial information. Moreover, investors
have historically requested and the Company has historically reported these
non-GAAP financial measures as a means of providing consistent and comparable
information with past reports of financial results.
While management believes that these non-GAAP financial measures provide
useful supplemental information to investors, there are limitations associated
with the use of these non-GAAP financial measures. These non-GAAP financial
measures are not prepared in accordance with GAAP, are not reported by all of
the Company's competitors and may not be directly comparable to similarly titled
measures of the Company's competitors due to potential differences in the exact
method of calculation. The Company compensates for these limitations by using
these non-GAAP financial measures as supplements to GAAP financial measures and
by reviewing the reconciliations of the non-GAAP financial measures to their
most comparable GAAP financial measures.
The adjustments to these non-GAAP financial measures, and the basis for
such adjustments, are outlined below:
Purchase accounting for deferred revenue. As announced on May 1, 2006,
ANSYS acquired Fluent Inc. in a series of mergers. In accordance with the fair
value provisions of EITF 01-3, "Accounting in a Business Combination for
Deferred Revenue of an Acquiree," acquired deferred revenue of approximately
$31.5 million was recorded on the opening balance sheet, which was approximately
$20.1 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- acquisition. In order to provide investors
with financial information that facilitates comparison of both historical and
future results, the Company has provided non-GAAP financial measures which
exclude the impact of the purchase accounting adjustment. The Company believes
that this non-GAAP financial adjustment is useful to investors because it allows
investors to (a) evaluate the effectiveness of the methodology and information
used by management in its financial and operational decision-making and (b) to
compare past and future reports of financial results of the Company as the
revenue reduction related to acquired deferred revenue will not recur when
related annual lease licenses and software maintenance contracts are renewed in
future periods.
Amortization of intangibles from acquisitions. The Company incurs
amortization of intangibles, included in its GAAP presentation of amortization
of software and acquired technology and amortization expense, related to various
acquisitions it has made in recent years. Management excludes these expenses and
their related tax impact for the purpose of calculating non-GAAP financial
measures when it evaluates the continuing operational performance of the Company
because these costs are fixed at the time of an acquisition, are then amortized
over a period of several years after the acquisition and generally cannot be
changed or influenced by management after the acquisition. Accordingly,
management does not consider these expenses for purposes of evaluating the
performance of the Company during the applicable time period after the
acquisition, and it excludes such expenses when making decisions to allocate
resources. The Company believes that this non-GAAP financial adjustment is
useful to investors because it allows investors to (a) evaluate the
effectiveness of the methodology and information used by management in its
financial and operational decision-making and (b) compare past reports of
financial results of the Company as the Company has historically reported these
non-GAAP financial measures.
Acquired in-process research and development. The Company incurs in-
process research and development expenses when technological feasibility for
acquired technology has not been established and no future alternative use for
such technology exists. Management excludes these expenses and their related tax
impact for the purpose of calculating non-GAAP financial measures when it
evaluates the continuing operational performance of the Company because these
costs do not relate to the Company's ongoing operations and generally cannot be
changed or influenced by management at the time of or after the acquisition.
Accordingly, management does not consider these expenses for purposes of
evaluating the performance of the Company during the applicable time period
after the acquisition, and it excludes such expenses when making decisions to
allocate resources. The Company believes that this non-GAAP financial adjustment
is useful to investors because it allows investors to (a) evaluate the
effectiveness of the methodology and information used by management in its
financial and operational decision-making and (b) to compare past and future
reports of financial results of the Company as the expense related to in-process
research and development is a one-time item recorded on the date of acquisition.
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 financial measures, and should
be read only in conjunction with the Company's consolidated financial statements
prepared in accordance with GAAP.
Pursuant to the requirements of Regulation G, the Company has provided a
reconciliation of the non-GAAP financial measures to the most directly
comparable GAAP financial measures as listed below:
GAAP Reporting Measure Non-GAAP Reporting Measure
Revenue Adjusted Revenue
Operating Profit Adjusted Operating Profit
Operating Profit Margin Adjusted Operating Profit Margin
Net Income Adjusted Net Income
Diluted Earnings Per Share Adjusted Diluted Earnings Per Share
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, statements regarding
our projections for revenue and earnings per share for the third quarter and
2006 (both GAAP and non-GAAP to exclude purchase accounting for deferred
revenue, acquisition-related amortization, stock-based compensation expense and
acquired in-process research and development), statements about management's
views concerning the Company's prospects in the remainder of 2006 and subsequent
years and the effect of the Fluent acquisition on these prospects, statements
regarding the impact of the Fluent acquisition, including statements regarding
the integration plan and long-term strategy, statements regarding collaboration
with Granta Design Ltd., statements regarding a partnership with MatWeb,
statements and projections relating to the impact of stock-based compensation,
statements regarding management's use of non-GAAP financial measures, 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, including, but not limited to, 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. Additional risks include the risk of a general economic downturn in
one or more of ANSYS' primary geographic regions, 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 2006 Annual Report and Form 10-K, as
amended. 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.
ANSYS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
---------------------------- ----------------------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenue:
Software licenses $ 34,763 $ 19,794 $ 61,515 $ 40,269
Maintenance and service 27,501 17,862 46,760 35,011
Total revenue 62,264 37,656 108,275 75,280
Cost of sales:
Software licenses 1,700 1,160 3,190 2,413
Amortization of software
and acquired technology 3,739 881 4,647 1,788
Maintenance and service 8,014 3,796 12,484 7,654
Total cost of sales 13,453 5,837 20,321 11,855
Gross profit 48,811 31,819 87,954 63,425
Operating expenses:
Selling, general and
administrative 22,020 10,600 33,859 21,146
Research and development 11,622 7,506 20,979 14,819
Amortization 1,576 385 1,704 711
In-process research and
development 28,100 - 28,100 -
Total operating expenses 63,318 18,491 84,642 36,676
Operating (loss) income (14,507) 13,328 3,312 26,749
Interest (expense) income (919) 984 593 1,708
Other (expense) income (263) 62 (77) (49)
(Loss) income before income
tax provision (15,689) 14,374 3,828 28,408
Income tax provision 3,704 4,599 10,308 8,950
Net (loss) income $ (19,393) $ 9,775 $ (6,480) $ 19,458
Earnings per share - basic:
Basic earnings per share $ (0.53) $ 0.31 $ (0.19) $ 0.62
Weighted average shares -
basic 36,306 31,667 34,214 31,579
Earnings per share - diluted:
Diluted earnings per share $ (0.53) $ 0.29 $ (0.19) $ 0.58
Weighted average shares -
diluted 36,306 33,782 34,214 33,688
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended June 30, 2006
(in thousands, except per share data)
(Unaudited)
As Non-GAAP
Reported Adjustments Results
------------ ------------ ------------
Total revenue: $ 62,264 $ 5,939(1) $ 68,203
Operating (loss) income (14,507) 39,250(2) 24,743
Operating profit margin (23.3)% 36.3%
Net (loss) income $ (19,393) $ 34,834(3) $ 15,441
Earnings per share - diluted:
Diluted earnings per share $ (0.53) $ 0.40
Weighted average shares -
diluted 36,306 2,104(4) 38,410
(1) 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."
(2) Amount represents $5.2 million of amortization expense associated with
intangible assets acquired in business acquisitions, including amounts
primarily related to acquired software, customer list and non-compete
agreements, $28.1 million of acquired in-process research and
development expense that was purchased in the Fluent acquisition and
immediately expensed, as well as the $5.9 million adjustment to
revenue as reflected in (1) above.
(3) Amount represents the impact of the adjustments to operating income
referred to in (2) above, adjusted for the related income tax impact
of $4.4 million.
(4) Amount represents common stock equivalents that are dilutive in the
calculation of non-GAAP diluted earnings per share.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended June 30, 2005
(in thousands, except per share data)
(Unaudited)
As Non-GAAP
Reported Adjustments Results
------------ ------------ ------------
Total revenue: $ 37,656 - $ 37,656
Operating income 13,328 1,136(1) 14,464
Operating profit margin 35.4% 38.4%
Net income $ 9,775 $ 738(2) $ 10,513
Earnings per share - diluted:
Diluted earnings per share $ 0.29 $ 0.31
Weighted average shares -
diluted 33,782 33,782
(1) 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.
(2) Amount represents the impact of the adjustments to operating income
referred to in (1) above, adjusted for the related income tax impact
of $398,000.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the six months ended June 30, 2006
(in thousands, except per share data)
(Unaudited)
As Non-GAAP
Reported Adjustments Results
------------ ------------ ------------
Total revenue: $ 108,275 $ 5,939(1) $ 114,214
Operating income 3,312 40,171(2) 43,483
Operating profit margin 3.1% 38.1%
Net (loss) income $ (6,480) $ 35,433(3) $ 28,953
Earnings per share - diluted:
Diluted earnings per share $ (0.19) $ 0.80
Weighted average shares -
diluted 34,214 2,053(4) 36,267
(1) 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."
(2) Amount represents $6.1 million of amortization expense associated with
intangible assets acquired in business acquisitions, including amounts
primarily related to acquired software, customer list and non-compete
agreements, $28.1 million of acquired in-process research and
development expense that was purchased in the Fluent acquisition and
immediately expensed, as well as the $5.9 million adjustment to
revenue as reflected in (1) above.
(3) Amount represents the impact of the adjustments to operating income
referred to in (2) above, adjusted for the related income tax impact
of $4.7 million.
(4) Amount represents common stock equivalents that are dilutive in the
calculation of non-GAAP diluted earnings per share.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the six months ended June 30, 2005
(in thousands, except per share data)
(Unaudited)
As Non-GAAP
Reported Adjustments Results
------------ ------------ ------------
Total revenue: $ 75,280 - $ 75,280
Operating income 26,749 2,224(1) 28,973
Operating profit margin 35.5% 38.5%
Net income $ 19,458 $ 1,445(2) $ 20,903
Earnings per share - diluted:
Diluted earnings per share $ 0.58 $ 0.62
Weighted average shares -
diluted 33,688 33,688
(1) 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.
(2) Amount represents the impact of the adjustments to operating income
referred to in (1) above, adjusted for the related income tax impact
of $779,000.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
June 30, December 31,
2006 2005
------------ ------------
ASSETS:
Cash & short-term investments $ 103,109 $ 194,232
Accounts receivable, net 29,937 19,134
Goodwill 430,823 43,277
Other intangibles, net 218,513 10,589
Other assets 86,512 38,277
Total assets $ 868,894 $ 305,509
LIABILITIES & STOCKHOLDERS' EQUITY:
Deferred revenue $ 95,394 $ 49,894
Long-term debt (including current portion) 170,552 -
Other liabilities 99,646 30,638
Stockholders' equity 503,302 224,977
Total liabilities &
stockholders' equity $ 868,894 $ 305,509
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Quarter Ending September 30, 2006
Earnings Per
Share Range
- Diluted
-------------
U.S. GAAP expectation $0.12 - $0.15
Adjustment to exclude purchase accounting
adjustments to deferred revenue $0.10 - $0.11
Adjustment to exclude acquisition-related
amortization $0.11 - $0.12
Non-GAAP expectation $0.35 - $0.36
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Year Ending December 31, 2006
Earnings Per
Share Range
- Diluted
-------------
U.S. GAAP expectation $0.17 - $0.24
Adjustment to exclude purchase accounting
adjustments to deferred revenue $0.27 - $0.29
Adjustment to exclude acquisition-related
amortization $0.32 - $0.34
Adjustment to exclude acquired in-process
research and development $0.72 - $0.73
Non-GAAP expectation $1.53 - $1.55
SOURCE ANSYS, Inc.
-0- 08/03/2006
/CONTACT: Investors, Lisa O'Connor, +1-724-514-1782, or
lisa.oconnor@ansys.com, or Media, Kelly Wall, +1-724-514-3076, or
kelly.wall@ansys.com, both of ANSYS, Inc./
/Web site: http://www.ansys.com
http://www.ansys.com/corporate/investors.asp /
(ANSS)