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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): November 2, 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 November 2, 2006, ANSYS, Inc. issued an earnings release announcing
its financial results for the third quarter ended September 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
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99.1 Press Release of the Registrant dated November 2, 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: November 2, 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 November 2, 2006
Exhibit 99.1
ANSYS, INC. ANNOUNCES CONTINUED GROWTH AND SOLID OPERATING RESULTS FOR THE
THIRD QUARTER
COMPANY INCREASES 2006 GUIDANCE AND PROVIDES INITIAL 2007 OUTLOOK
SOUTHPOINTE, Pa., Nov. 2 /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 an increase in its
outlook for 2006 non-GAAP results. The Company has also provided its initial
outlook for the 2007 fiscal year.
"We are proud to announce a record quarter for financial performance for
both revenue and earnings, and are pleased with the efforts of the entire ANSYS
team," said ANSYS President and CEO, Jim Cashman. "The Company continues to make
substantial progress against its short-term integration and business execution
priorities, in addition to its long-term strategic initiatives. We firmly
believe that these results not only validate the initial enthusiastic customer
response to our diversified portfolio of innovative product and service
offerings, but also provide us with the business momentum that enables us to
continue to focus, invest and drive our technology vision for the future."
ANSYS' third quarter and year-to-date 2006 financial results are presented
below. ANSYS' 2006 year-to-date GAAP results are heavily impacted by a one-time
charge of $28.1 million, which was recorded in the second quarter of 2006, and
related to in-process research and development associated with the May 2006
acquisition of Fluent. The non-GAAP results exclude the income statement effects
of stock-based compensation, 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 $77.4 million in the third quarter of 2006 as
compared to $39.0 million in the third quarter of 2005; total non-GAAP
revenue of $191.6 million in the first nine months of 2006 as compared to
$114.3 million in the first nine months of 2005; total GAAP revenue of
$70.1 million in the third quarter of 2006 as compared to $39.0 million in
the third quarter of 2005; total GAAP revenue of $178.4 million in the
first nine months of 2006 as compared to $114.3 million in the first nine
months of 2005;
* A non-GAAP operating profit margin of 37.1% in the third quarter of 2006
as compared to 39.4% in the third quarter of 2005; a non-GAAP operating
profit margin of 39.0% in the first nine months of 2006 as compared to
38.8% in the first nine months of 2005; a GAAP operating profit margin of
18.3% in the third quarter of 2006 as compared to 36.7% in the third
quarter of 2005; a GAAP operating profit margin of 9.1% in the first nine
months of 2006 as compared to 35.9% in the first nine months of 2005;
* Non-GAAP net income of $18.2 million in the third quarter of 2006 as
compared to $11.9 million in the third quarter of 2005; non-GAAP net
income of $49.2 million in the first nine months of 2006 as compared to
$32.8 million in the first nine months of 2005; GAAP net income of $8.4
million in the third quarter of 2006 as compared to GAAP net income of
$11.2 million in the third quarter of 2005; GAAP net income of $1.9
million in the first nine months of 2006 as compared to GAAP net income of
$30.6 million in the first nine months of 2005; and
* Non-GAAP diluted earnings per share of $0.45 in the third quarter of 2006
as compared to $0.35 in the third quarter of 2005; non-GAAP diluted
earnings per share of $1.31 in the first nine months of 2006 as compared
to $0.97 in the first nine months of 2005; GAAP diluted earnings per share
of $0.21 in the third quarter of 2006 as compared to GAAP diluted earnings
per share of $0.33 in the third quarter of 2005; GAAP diluted earnings per
share of $0.05 in the first nine months of 2006 as compared to GAAP
diluted earnings per share of $0.91 in the first nine months of 2005.
The Company's GAAP results reflect stock-based compensation charges related
to the January 1, 2006 adoption of SFAS No. 123R "Share-Based Payment" of
approximately $1.2 million ($1.0 million after tax) or $0.03 diluted earnings
per share for the third quarter of 2006 and approximately $3.7 million ($3.0
million after tax) or $0.08 diluted earnings per share for the first nine 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 and 2007 discussed below, represent non-GAAP financial
measures. A reconciliation of these measures to the appropriate GAAP measures,
for the three months and nine months ended September 30, 2006 and 2005, and for
the 2006 and initial 2007 financial outlook, is included in the condensed
financial information included in this release.
"We believe that today's reported results highlight continued progress in
the core business, as well as the positive impact of our integration efforts to
date. They are also a clear indication that our dedication to customers and our
focus on execution against a long-term strategy translates to sustained
profitable growth and ultimately drives value for the benefit of our
stockholders," Cashman stated.
Management's Remaining 2006 and Initial 2007 Financial Outlook
The Company has provided its 2006 and 2007 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 charges for stock-based compensation as well as the
income statement effects of purchase accounting for deferred revenue,
acquisition-related amortization of intangible assets and acquired in-process
research and development.
As required by SFAS No. 123R and 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
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 SFAS No.
123R. 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 $3.7
million during the first nine months of 2006 related to disqualified incentive
stock options; however, only $65,000 of such amount was recorded as a reduction
in income tax expense. Because there are significant limitations in estimating
the impact of SFAS No. 123R, 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.
Fourth Quarter 2006 Guidance
The Company currently expects the following for the quarter ending
December 31, 2006:
* GAAP revenue in the range of $77 - $79 million
* Non-GAAP revenue in the range of $82 - $84 million
* GAAP diluted earnings per share of $0.24 - $0.27
* Non-GAAP diluted earnings per share of $0.44 - $0.46
Fiscal Year 2006 Guidance
The Company currently expects the following for the fiscal year ending
December 31, 2006:
* GAAP revenue in the range of $255 - $257 million
* Non-GAAP revenue in the range of $273 - $275 million
* GAAP diluted earnings per share of $0.27 - $0.33
* Non-GAAP diluted earnings per share of $1.74 - $1.76
Fiscal Year 2007 Guidance
The Company currently expects the following for the fiscal year ending
December 31, 2007:
* GAAP revenue in the range of $358 - $363 million
* Non-GAAP revenue in the range of $360 - $365 million
* GAAP diluted earnings per share of $1.31 - $1.41
* Non-GAAP diluted earnings per share of $2.00 - $2.03
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 are supplemental financial measures 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 November 2,
2006 to discuss third quarter results. To participate in the live conference
call, dial 913-981-5550 or 800-289-0508 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 and its related tax impact.
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 operating income, non-GAAP operating profit
margin, non-GAAP net income and non-GAAP diluted earnings per share 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 these non-GAAP financial measures are useful to investors because they
allow 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.
Stock-based compensation expense and its related tax impact. The Company
incurs expense related to stock-based compensation included in its GAAP
presentation of cost of software licenses, cost of maintenance and service,
research and development expense and selling, general and administrative
expense. Although stock-based compensation is an expense of the Company and
viewed as a form of compensation, management excludes these expenses for the
purpose of calculating non-GAAP operating income, non-GAAP operating profit
margin, non-GAAP net income and non-GAAP diluted earnings per share when it
evaluates the continuing operational performance of the Company. Specifically,
the Company excludes stock-based compensation during its annual budgeting
process and its quarterly and annual assessments of the Company's and
management's performance. The annual budgeting process is the primary mechanism
whereby the Company allocates resources to various initiatives and operational
requirements. Additionally, the annual review by the board of directors where it
compares the Company's historical business model and profitability as it relates
to the planned business model and profitability for the forthcoming year
excludes the impact of stock-based compensation. In evaluating the performance
of senior management and department managers, charges related to stock-based
compensation are excluded from expenditure and profitability results. In fact,
the Company records stock-based compensation expense into a stand-alone cost
center for which no single operational manager is responsible or accountable. In
this way, management is able to review on a period-to-period basis each
manager's performance and assess financial discipline over operational
expenditures without the effect of stock-based compensation. The Company
believes that the non-GAAP financial measures are useful to investors because
they allow investors to (a) evaluate the Company's operating results and the
effectiveness of the methodology used by management to review the Company's
operating results, and (b) review historical comparability in its financial
reporting, as well as comparability with competitors' operating results.
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 Non-GAAP Revenue
Operating Profit Non-GAAP Operating Profit
Operating Profit Margin Non-GAAP Operating Profit Margin
Net Income Non-GAAP Net Income
Diluted Earnings Per Share Non-GAAP 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 fourth quarter, fiscal
year 2006 and 2007 (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 and
progress of the integration of Fluent and ANSYS, including statements regarding
the short-term integration and long-term strategic initiatives, statements and
projections relating to the impact of stock-based compensation, statements
regarding management's use of non-GAAP financial measures, statements regarding
customer response to our products and services, statements regarding our
business momentum and technology vision for the future, statements regarding our
dedication to customers and our focus against a long-term strategy leading to
sustained profitable growth and value for the benefit of our stockholders, 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 Income
(in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
------------- ------------- ------------- -------------
Revenue:
Software licenses $ 42,213 $ 20,978 $ 103,728 $ 61,247
Maintenance and service 27,904 18,057 74,664 53,068
Total revenue 70,117 39,035 178,392 114,315
Cost of sales:
Software licenses 1,748 1,334 4,938 3,747
Amortization of software
and acquired technology 5,138 877 9,785 2,665
Maintenance and service 10,434 3,822 22,918 11,476
Total cost of sales 17,320 6,033 37,641 17,888
Gross profit 52,797 33,002 140,751 96,427
Operating expenses:
Selling, general and
administrative 24,333 10,708 58,192 31,854
Research and development 13,295 7,667 34,274 22,486
Amortization 2,314 298 4,018 1,009
In-process research and
development - - 28,100 -
Total operating
expenses 39,942 18,673 124,584 55,349
Operating income 12,855 14,329 16,167 41,078
Interest (expense) income (2,055) 1,135 (1,462) 2,843
Other income (expense) 412 6 335 (43)
Income before income tax
provision 11,212 15,470 15,040 43,878
Income tax provision 2,840 4,296 13,148 13,246
Net income $ 8,372 $ 11,174 $ 1,892 $ 30,632
Earnings per share - basic:
Basic earnings per share $ 0.22 $ 0.35 $ 0.05 $ 0.97
Weighted average shares -
basic 38,402 31,851 35,610 31,670
Earnings per share - diluted:
Diluted earnings per share $ 0.21 $ 0.33 $ 0.05 $ 0.91
Weighted average shares -
diluted 40,290 33,922 37,527 33,667
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended September 30, 2006
(in thousands, except percentages and per share data)
(Unaudited)
Non-GAAP
As Reported Adjustments Results
----------- ----------- -----------
Total revenue: $ 70,117 $ 7,264(1) $ 77,381
Operating income 12,855 15,872(2) 28,727
Operating profit margin 18.3% 37.1%
Net income $ 8,372 $ 9,856(3) $ 18,228
Earnings per share - diluted:
Diluted earnings per share $ 0.21 $ 0.45
Weighted average shares -
diluted 40,290 40,290
(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 $7.4 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, a $1.2 million charge for stock-based compensation in accordance
with the Company's adoption of SFAS No. 123R, "Share-Based Payment," as well
as the $7.3 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 $6.0 million.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended September 30, 2005
(in thousands, except percentages and per share data)
(Unaudited)
Non-GAAP
As Reported Adjustments Results
----------- ----------- -----------
Total revenue: $ 39,035 - $ 39,035
Operating income 14,329 1,043(1) 15,372
Operating profit margin 36.7% 39.4%
Net income $ 11,174 $ 679(2) $ 11,853
Earnings per share - diluted:
Diluted earnings per share $ 0.33 $ 0.35
Weighted average shares -
diluted 33,922 33,922
(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 $364,000.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the nine months ended September 30, 2006
(in thousands, except percentages and per share data)
(Unaudited)
Non-GAAP
As Reported Adjustments Results
----------- ----------- -----------
Total revenue: $ 178,392 $ 13,203(1) $ 191,595
Operating income 16,167 58,497(2) 74,664
Operating profit margin 9.1% 39.0%
Net income $ 1,892 $ 47,288(3) $ 49,180
Earnings per share - diluted:
Diluted earnings per share $ 0.05 $ 1.31
Weighted average shares -
diluted 37,527 37,527
(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 $13.5 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, a $3.7 million charge for stock-based compensation in accordance
with the Company's January 1, 2006 adoption of SFAS No. 123R, "Share-Based
Payment," $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 $13.2 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 $11.2
million.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the nine months ended September 30, 2005
(in thousands, except percentages and per share data)
(Unaudited)
Non-GAAP
As Reported Adjustments Results
----------- ----------- -----------
Total revenue: $ 114,315 - $ 114,315
Operating income 41,078 3,267(1) 44,345
Operating profit margin 35.9% 38.8%
Net income $ 30,632 $ 2,124(2) $ 32,756
Earnings per share - diluted:
Diluted earnings per share $ 0.91 $ 0.97
Weighted average shares -
diluted 33,667 33,667
(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 $1.1 million.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
September 30, December 31,
2006 2005
------------- -------------
ASSETS:
Cash & short-term investments $ 101,768 $ 194,232
Accounts receivable, net 27,816 19,134
Goodwill 431,050 43,277
Other intangibles, net 211,306 10,122
Other assets 82,614 38,744
Total assets $ 854,554 $ 305,509
LIABILITIES & STOCKHOLDERS' EQUITY:
Deferred revenue $ 89,742 $ 49,894
Long-term debt (including current portion) 148,521 -
Other liabilities 98,684 30,638
Stockholders' equity 517,607 224,977
Total liabilities & stockholders' equity $ 854,554 $ 305,509
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Quarter Ending December 31, 2006
Earnings Per Share Range
- Diluted
------------------------
U.S. GAAP expectation $0.24 - $0.27
Adjustment to exclude purchase accounting adjustments
to deferred revenue $0.05
Adjustment to exclude acquisition-related amortization $0.11 - $0.12
Adjustment to exclude stock-based compensation $0.03
Non-GAAP expectation $0.44 - $0.46
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Year Ending December 31, 2006
Earnings Per Share Range
- Diluted
------------------------
U.S. GAAP expectation $0.27 - $0.33
Adjustment to exclude purchase accounting
adjustments to deferred revenue $0.26 - $0.27
Adjustment to exclude acquisition-related amortization $0.33 - $0.34
Adjustment to exclude stock-based compensation $0.11 - $0.12
Adjustment to exclude acquired in-process research
and development $0.73 - $0.74
Non-GAAP expectation $1.74 - $1.76
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Year Ending December 31, 2007
Earnings Per Share Range
- Diluted
------------------------
U.S. GAAP expectation $1.31 - $1.41
Adjustment to exclude purchase accounting
adjustments to deferred revenue $0.03
Adjustment to exclude acquisition-related amortization $0.43 - $0.46
Adjustment to exclude stock-based compensation $0.16 - $0.20
Non-GAAP expectation $2.00 - $2.03
SOURCE ANSYS, Inc.
-0- 11/02/2006
/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 /