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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): February 20, 2007
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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 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 February 20, 2007, ANSYS, Inc. issued an earnings release announcing
its financial results for the fourth quarter ended December 31, 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 February 20, 2007
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: February 20, 2007 By: /s/ MARIA T. SHIELDS
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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 February 20, 2007
Exhibit 99.1
ANSYS, INC. REPORTS 2006 FOURTH QUARTER RECORD OPERATING RESULTS AS FLUENT
INTEGRATION MOMENTUM CONTINUES
COMPANY ANNOUNCES INCREASE TO 2007 INITIAL OUTLOOK
SOUTHPOINTE, Pa., Feb. 20 /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
fourth quarter and annual non-GAAP operating results, and an increase in its
outlook for 2007 non-GAAP results.
"I am pleased to report another record year for our company," commented
ANSYS President and CEO, Jim Cashman. "During 2006, despite the significant time
and resources that were invested in our Fluent integration activities, the
results for the fourth quarter and the year demonstrate the outcome of the
continued focus of and execution by the ANSYS team. The results are also
indicative of continued strong growth in our core business, complemented by the
positive impact of the integration of the Fluent operations. Our financial
performance during this past year reflects that our long-term vision and
strategy continue to resonate with, and are very much aligned with, the needs
and visions of our customers throughout the globe."
ANSYS' fourth quarter and year-to-date 2006 financial results are presented
below. ANSYS' 2006 GAAP results are 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 $90.4 million in the fourth quarter of 2006 as
compared to $43.7 million in the fourth quarter of 2005; total non- GAAP
revenue of $282.0 million in 2006 as compared to $158.0 million in 2005;
total GAAP revenue of $85.2 million in the fourth quarter of 2006 as
compared to $43.7 million in the fourth quarter of 2005; total GAAP
revenue of $263.6 million in 2006 as compared to $158.0 million in 2005;
-- A non-GAAP operating profit margin of 38.1% in the fourth quarter of
2006 as compared to 42.8% in the fourth quarter of 2005; a non-GAAP
operating profit margin of 38.7% in 2006 as compared to 39.9% in 2005; a
GAAP operating profit margin of 23.4% in the fourth quarter of 2006 as
compared to 40.6% in the fourth quarter of 2005; a GAAP operating profit
margin of 13.7% in 2006 as compared to 37.2% in 2005;
-- Non-GAAP net income of $21.5 million in the fourth quarter of 2006 as
compared to $13.9 million in the fourth quarter of 2005; non-GAAP net
income of $70.7 million in 2006 as compared to $46.7 million in 2005;
GAAP net income of $12.3 million in the fourth quarter of 2006 as
compared to GAAP net income of $13.3 million in the fourth quarter of
2005; GAAP net income of $14.2 million in 2006 as compared to GAAP net
income of $43.9 million in 2005; and
-- Non-GAAP diluted earnings per share of $0.53 in the fourth quarter of
2006 as compared to $0.41 in the fourth quarter of 2005; non-GAAP
diluted earnings per share of $1.85 in 2006 as compared to $1.38 in
2005; GAAP diluted earnings per share of $0.30 in the fourth quarter of
2006 as compared to GAAP diluted earnings per share of $0.39 in the
fourth quarter of 2005; GAAP diluted earnings per share of $0.37 in 2006
as compared to GAAP diluted earnings per share of $1.30 in 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 $1.9 million ($1.6 million after tax) or $0.04 diluted earnings
per share for the fourth quarter of 2006 and approximately $5.6 million ($4.7
million after tax) or $0.12 diluted earnings per share for 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 2007 discussed below, represent non-GAAP financial measures. A
reconciliation of these measures to the appropriate GAAP measures, for the three
months and twelve months ended December 31, 2006 and 2005, and for the 2007
financial outlook, is included in the condensed financial information included
in this release.
Continuing his comments on 2006 performance, Cashman noted, "2006 has been a
very productive and successful year for ANSYS as we completed a significant
acquisition that has transformed our business and significantly extended the
capabilities of our broad-based engineering simulation portfolio. We have also
further expanded the diversity of our customer base, our geographic presence and
our wealth of employee talent. The foundation that we have been building over
the course of many years has generated a solid business model that positions the
Company for future success and growth."
Cashman concluded with, "Our business continues to generate a significant
level of cash from operations. During 2006, we deployed cash to partially fund
the Fluent acquisition, aggressively pay down our debt and to fund capital
expenditures that expanded our product offerings and improved our overall
productivity. There is strong business and customer momentum as we begin 2007,
and we are truly excited about the opportunities and challenges that lie ahead."
Management's Remaining 2007 Financial Outlook
The Company has provided its 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 $4.0
million during 2006 related to disqualified incentive stock options; however,
only $67,000 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.
First Quarter 2007 Guidance
The Company currently expects the following for the quarter ending March 31,
2007:
-- GAAP revenue in the range of $83 - $85 million
-- Non-GAAP revenue in the range of $85 - $87 million
-- GAAP diluted earnings per share of $0.28 - $0.34
-- Non-GAAP diluted earnings per share of $0.48 - $0.50
Fiscal Year 2007 Guidance
The Company currently expects the following for the fiscal year ending
December 31, 2007:
-- GAAP revenue in the range of $360 - $363 million
-- Non-GAAP revenue in the range of $362 - $365 million
-- GAAP diluted earnings per share of $1.37 - $1.46
-- Non-GAAP diluted earnings per share of $2.05 - $2.08
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 February 20,
2007 to discuss fourth quarter results. To participate in the live conference
call, dial 913-312-1264 or 888-802-2278 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 during
which 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 first quarter and fiscal
year 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 2007 and subsequent
years and the effect of the Fluent integration on these prospects, statements
and projections relating to the impact of stock-based compensation, statements
regarding management's use of non-GAAP financial measures, statements regarding
the growth of our core business and impact of the integration of the Fluent
operations, statements regarding our long-term vision and strategy, statements
regarding our business model and its impact on our future success and growth,
statements regarding our business and customer momentum, 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, 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, AUTODYN, CFX, FLUENT and any and all ANSYS, Inc.
brand, product, service and feature names, logos and slogans are registered
trademarks or trademarks of ANSYS, Inc. or its subsidiaries in the United States
or other countries. All other brand, product, service and feature names or
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 Twelve Months Ended
--------------------------- ---------------------------
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenue:
Software licenses $ 53,232 $ 24,433 $ 156,960 $ 85,680
Maintenance and service 32,016 19,288 106,680 72,356
Total revenue 85,248 43,721 263,640 158,036
Cost of sales:
Software licenses 2,368 1,545 7,306 5,292
Amortization of software and
acquired technology 5,124 911 14,909 3,576
Maintenance and service 11,594 3,695 34,512 15,171
Total cost of sales 19,086 6,151 56,727 24,039
Gross profit 66,162 37,570 206,913 133,997
Operating expenses:
Selling, general
and administrative 28,709 11,431 86,901 43,285
Research and development 15,132 8,202 49,406 30,688
Amortization 2,332 175 6,350 1,184
In-process research
and development - - 28,100 -
Total operating expenses 46,173 19,808 170,757 75,157
Operating income 19,989 17,762 36,156 58,840
Interest (expense) income (1,551) 1,450 (3,013) 4,294
Other (expense) income (417) 21 (82) (23)
Income before income
tax provision 18,021 19,233 33,061 63,111
Income tax provision 5,757 5,962 18,905 19,208
Net income $ 12,264 $ 13,271 $ 14,156 $ 43,903
Earnings per share - basic:
Basic earnings per share $ 0.32 $ 0.41 $ 0.39 $ 1.38
Weighted average
shares - basic 38,543 31,985 36,343 31,749
Earnings per share - diluted:
Diluted earnings per share $ 0.30 $ 0.39 $ 0.37 $ 1.30
Weighted average
shares - diluted 40,387 34,054 38,199 33,692
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended December 31, 2006
(in thousands, except percentages and per share data)
(Unaudited)
Non-GAAP
As Reported Adjustments Results
----------- ----------- -----------
Total revenue: $ 85,248 $ 5,184(1) $ 90,432
Operating income 19,989 14,504(2) 34,493
Operating profit margin 23.4% 38.1%
Net income $ 12,264 $ 9,221(3) $ 21,485
Earnings per share - diluted:
Diluted earnings per share $ 0.30 $ 0.53
Weighted average shares - diluted 40,387 40,387
(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 $1.9 million charge for stock-based compensation in
accordance with the Company's adoption of SFAS No. 123R, "Share-Based
Payment," as well as the $5.2 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
$5.3 million.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended December 31, 2005
(in thousands, except percentages and per share data)
(Unaudited)
Non-GAAP
As Reported Adjustments Results
----------- ----------- -----------
Total revenue: $ 43,721 - $ 43,721
Operating income 17,762 $ 963(1) 18,725
Operating profit margin 40.6% 42.8%
Net income $ 13,271 $ 625(2) $ 13,896
Earnings per share - diluted:
Diluted earnings per share $ 0.39 $ 0.41
Weighted average shares - diluted 34,054 34,054
(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
$338,000.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the twelve months ended December 31, 2006
(in thousands, except percentages and per share data)
(Unaudited)
Non-GAAP
As Reported Adjustments Results
----------- ----------- -----------
Total revenue: $ 263,640 $ 18,387(1) $ 282,027
Operating income 36,156 73,001(2) 109,157
Operating profit margin 13.7% 38.7%
Net income $ 14,156 $ 56,509(3) $ 70,665
Earnings per share - diluted
Diluted earnings per share $ 0.37 $ 1.85
Weighted average shares - diluted 38,199 38,199
(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 $20.9 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 $5.6 million charge for stock-based compensation in
accordance with the Company's 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 $18.4 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
$16.5 million.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the twelve months ended December 31, 2005
(in thousands, except percentages and per share data)
(Unaudited)
Non-GAAP
As Reported Adjustments Results
----------- ----------- -----------
Total revenue: $ 158,036 - $ 158,036
Operating income 58,840 $ 4,230(1) 63,070
Operating profit margin 37.2% 39.9%
Net income $ 43,903 $ 2,749(2) $ 46,652
Earnings per share - diluted:
Diluted earnings per share $ 1.30 $ 1.38
Weighted average shares - diluted 33,692 33,692
(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
$1.5 million.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
December 31, December 31,
2006 2005
------------ ------------
ASSETS:
Cash & short-term investments $ 104,486 $ 194,232
Accounts receivable, net 37,341 19,134
Goodwill 428,959 43,277
Other intangibles, net 204,115 10,122
Other assets 103,142 38,744
Total assets $ 878,043 $ 305,509
LIABILITIES & STOCKHOLDERS' EQUITY:
Deferred revenue $ 101,226 $ 48,234
Long-term debt (including current portion) 123,320 -
Other liabilities 118,704 32,298
Stockholders' equity 534,793 224,977
Total liabilities & stockholders' equity $ 878,043 $ 305,509
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Quarter Ending March 31. 2007
Earnings Per Share
Range - Diluted
------------------
U.S. GAAP expectation $0.28 - $0.34
Adjustment to exclude purchase accounting
adjustments to deferred revenue $0.02 - $0.03
Adjustment to exclude acquisition-related
amortization $0.10 - $0.12
Adjustment to exclude stock-based compensation $0.04 - $0.05
Non-GAAP expectation $0.48 - $0.50
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Year Ending December 31, 2007
Earnings Per Share
Range - Diluted
------------------
U.S. GAAP expectation $1.37 - $1.46
Adjustment to exclude purchase accounting
adjustments to deferred revenue $0.02 - $0.03
Adjustment to exclude acquisition-related
amortization $0.42 - $0.45
Adjustment to exclude stock-based compensation $0.18 - $0.20
Non-GAAP expectation $2.05 - $2.08
SOURCE ANSYS, Inc.
-0- 02/20/2007
/CONTACT: Media, Kelly Wall, +1-724-514-3076, or kelly.wall@ansys.com, or
Investors, Lisa O'Connor, +1-724-514-1782, or lisa.oconnor@ansys.com, both of
ANSYS, Inc./
/Web site: http://www.ansys.com
http://www.ansys.com/corporate/investors.asp /