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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 12, 2004
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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 File Number) (I.R.S. Employer
Incorporation or Organization) 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
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c)
Exhibits
Exhibit
Number Description
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99.1 Press Release of the Registrant dated February 12, 2004
Item 9. Regulation FD Disclosure
The Information contained in this Item 9 of this Current Report on Form
8-K is being furnished pursuant to "Item 12. Results of Operations and Financial
Condition" of Form 8-K.
The information in this Current Report is being furnished and shall not be
deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of such Section. The
information in this Current Report shall not be incorporated by reference into
any registration statement or other document pursuant to the Securities Act of
1933, except as shall be expressly set forth by specific reference in such
filing.
On February 12, 2004, ANSYS, Inc. issued an earnings release announcing
its financial results for the fourth quarter ended December 31, 2003. A copy of
the earnings release is attached as Exhibit 99.1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
ANSYS, INC.
(Registrant)
Date: February 12, 2004 By: /s/ MARIA T. SHIELDS
-------------------------------------------
Maria T. Shields - Chief Financial Officer,
VP of Finance and Administration
(Ms. Shields is the Principal Financial and
Accounting Officer and has been duly
authorized to sign on behalf of the
Registrant)
Exhibit 99.1
ANSYS, Inc. 2003 Results Set New Record Levels for Revenue and Earnings
SOUTHPOINTE, Pa., Feb. 12 /PRNewswire-FirstCall/ -- ANSYS, Inc.
(Nasdaq: ANSS), a global innovator of simulation software and technologies
designed to optimize product development processes, today announced record
fourth quarter and annual 2003 results. ANSYS' fourth quarter and year-to-
date GAAP results include:
- Total revenue of $33.3 million, as compared to $25.3 million in the
fourth quarter of 2002; total revenue of $113.5 million in 2003 as
compared to $91.0 million in 2002;
- Diluted earnings per share of $0.45 as compared to $0.41 in the fourth
quarter of 2002; diluted earnings per share of $1.34 in 2003 as
compared to $1.22 in 2002; and
- Cash flows from operations of $10.1 million in the fourth quarter of
2003 and $38.8 million for the year 2003.
Excluding the adverse impact on reported software license revenue of
purchase accounting adjustments related to the Company's February 2003
acquisition of CFX and acquisition-related amortization (see discussion
below), ANSYS' fourth quarter and year-to-date adjusted (non-GAAP) results
include:
- Total adjusted revenue of $33.8 million, as compared to $25.3 million
in the fourth quarter of 2002; total adjusted revenue of $116.5 million
in 2003 as compared to $91.0 million in 2002;
- An overall adjusted operating profit margin, excluding total
amortization, of 35% as compared to 39% for the fourth quarter of
2002; and an overall adjusted operating profit margin, excluding total
amortization, of 32% in 2003 as compared to 32% in 2002; and
- Adjusted diluted earnings per share of $0.50 as compared to $0.43 for
the fourth quarter of 2002; adjusted diluted earnings per share of
$1.60 in 2003 as compared to $1.29 in 2002.
ANSYS President and CEO, Jim Cashman, commenting on the Company's 2003
results, said, "There are four significant factors that have given us the
opportunity to achieve increasingly high levels of business performance.
First, we have progressed our vision of providing solutions for total product
innovation through simulation-driven design. Second, we have maintained a
commitment to technical excellence and R&D investment, which has allowed us to
drive this vision in a meaningful timeframe. Next, we have stayed true to our
business model and disciplines, even in the more difficult economic times of
recent, and finally, we have remained committed to the long-standing
relationships that we have with our customers, employees and business
partners."
Cashman added, "With these factors in mind, we view 2004 as a year that
presents an expanding series of opportunities to continue to advance our
technology and service strategies to address the ever-increasing needs and
business pressures that our customers face. We believe that ANSYS is ideally
positioned to articulate and demonstrate a compelling business proposition to
both new and existing customers."
The adjusted results highlighted above represent non-GAAP (Generally
Accepted Accounting Principles) financial measures. A reconciliation of these
measures to the appropriate GAAP measures is included in the condensed
financial statements included in this release.
Adjustments to Reported GAAP Financial Results
- Purchase Accounting Adjustment for Acquired Deferred Revenue:
As announced February 26, 2003, ANSYS acquired CFX for approximately
$22 million in cash. In accordance with the fair value provisions of EITF
01-3 "Accounting in a Business Combination for Deferred Revenue of an
Acquiree," acquired deferred software license revenue of approximately
$4.8 million was recorded on the opening balance sheet, which was
approximately $3.4 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 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 and will continue to
provide adjusted financial information, which excludes the impact of the
purchase accounting adjustment, through this twelve-month period.
- Acquisition Related Amortization:
As previously discussed, the Company completed its recent acquisition of
CFX in February 2003. Prior to that, the Company also acquired CADOE S.A. and
ICEM CFD Engineering in November 2001 and August 2000, respectively. These
acquisitions have all been accounted for as purchases, resulting in the
recording of a significant amount of goodwill and identifiable intangible
assets. As a result of the amortization associated with intangible assets,
ANSYS' quarterly and year-to-date financial results are not comparable with
prior periods.
To enable investors and other interested parties to compare 2003 financial
results to historical and future periods, ANSYS is providing its 2003 fourth
quarter and year-to-date reported GAAP results as well as financial results
that have been adjusted for the impact of the items described above.
Fourth Quarter 2003 and Year Ended December 31, 2003 Reported GAAP Results
ANSYS reported net income for the fourth quarter of $7.2 million, or $0.45
diluted earnings per share, based on 16.4 million weighted average shares
outstanding. For the quarter ended December 31, 2002, ANSYS reported net
income of $6.3 million, or $0.41 diluted earnings per share, based on
15.4 million weighted average shares outstanding. For the year ended
December 31, 2003, ANSYS reported net income of $21.3 million, or diluted
earnings per share of $1.34, based on 15.9 million weighted average shares
outstanding. For the year ended December 31, 2002, ANSYS reported net income
of $19.0 million, or diluted earnings per share of $1.22, based on
15.6 million weighted average shares outstanding. Cash and short-term
investments at December 31, 2003 totaled $83.0 million and ANSYS remains debt
free.
ANSYS will hold a conference call at 10:30 A.M. Eastern Time on
February 12, 2004 to discuss fourth quarter results as well as to provide
guidance regarding 2004 business prospects. The dial in number is
800-857-7001 and the passcode is "ANSYS". A replay will be available until
February 19, 2004 by dialing 800-731-6045. The conference call will be
webcast live as well as archived and can be accessed, along with other
financial information, on ANSYS' website, located
at www.ansys.com/newsrooms/investor.htm .
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. ANSYS 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. Headquartered in Canonsburg, Pennsylvania U.S.A. with
approximately 25 strategic sales locations throughout the world, ANSYS, Inc.
employs more than 600 people and distributes its products through a network of
channel partners in 40 countries. Visit www.ansys.com for more information.
Some matters discussed in this news release constitute forward-looking
statements under the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties. These
forward-looking statements include statements with respect to our integrations
of CFX and our position to demonstrate a compelling business proposition.
All forward-looking statements in this press release are subject to risks
and uncertainties, such as the risk of a general economic downturn in one or
more of ANSYS' primary geographic markets, the risk that ANSYS has
overestimated its ability to maintain growth and profitability and control
costs in the current economic environment, the risk that the CFX business will
not perform consistent with operations or that ANSYS will experience
unforeseen difficulties integrating this newly-acquired business, the risk
that ANSYS' sales will be adversely impacted at a later stage in the current
economic downturn, 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 in an unstable economy,
risks of problems arising from customer contract cancellations, uncertainties
regarding customer acceptance of new products, the risk that ongoing pressure
on customer spending will not allow investment in sales, technology innovation
and development of key strategic partnerships, the risk that ANSYS' strategic
plan will not increase shareholder value over the long run, 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 including those described above may not
produce anticipated benefits, the risk that changes in the price of our common
stock or the existence of competing uses for available cash will affect our
willingness to continue the stock repurchase program, uncertainties regarding
fluctuations in quarterly results, including uncertainties regarding the
timing of orders from significant customers and regional economies, 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 2002
Annual Report and Form 10-K and the most recent quarterly report on Form 10-Q.
ANSYS, Inc. is committed to providing the most open and flexible analysis
solutions to meet customer requirements for engineering software in today's
competitive marketplace. ANSYS, Inc. partners with leading design software
suppliers to develop state-of-the-art CAD-integrated products. ANSYS and its
global network of ANSYS Support Distributors provide sales, support and
training for customers. Information about ANSYS, Inc. and its products can be
found on the Worldwide Web at www.ansys.com .
ANSYS, DesignSpace, ANSYS DesignModeler, ANSYS DesignXplorer VT, ANSYS
DesignXplorer, ANSYS ProFEA, ANSYS Emax, ANSYS Workbench environment, Multi-
field, CFX, AI*Environment, AI*NASTRAN, CADOE S.A. and any and all ANSYS, Inc.
product names referenced on any media, manual or the like, are registered
trademarks or trademarks of subsidiaries of ANSYS, Inc. located in the United
States or other countries. NASTRAN is a registered trademark of the National
Aeronautics Space Administration. All other product names mentioned are
trademarks or registered trademarks of their respective manufacturers.
Reconciliation of Non-GAAP Measures
This earnings release contains non-GAAP financial measures. For purposes
of Regulation G, a non-GAAP financial measure is a numerical measure of a
registrant's historical or future financial performance, financial position or
cash flows that excludes amounts, or is subject to adjustments that have the
effect of excluding amounts, that are included in the most directly comparable
measure calculated and presented in accordance with GAAP in the statement of
income, balance sheet or statement of cash flows of the issuer; or includes
amounts, or is subject to adjustments that have the effect of including
amounts, that are excluded from the most directly comparable measure so
calculated and presented. In this regard, GAAP refers to generally accepted
accounting principles in the United States. Pursuant to the requirements of
Regulation G, the Company has provided a reconciliation of the adjusted
(non-GAAP) financial measures to the most directly comparable GAAP financial
measures.
Adjusted software license revenue, adjusted operating profit margin,
adjusted net income and adjusted diluted earnings per share are presented in
this earnings release because management uses this information in evaluating
the results of the continuing operations of business and believes that this
information provides the users of the financial statements a valuable insight
into the operating results. Additionally, management believes that it is in
the best interest of its investors to provide financial information that will
facilitate comparison of both historical and future results.
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,
2003 2002 2003 2002
Revenue:
Software licenses $17,951 $14,052 $58,408 $48,177
Maintenance and service 15,303 11,215 55,127 42,834
Total revenue 33,254 25,267 113,535 91,011
Cost of sales:
Software licenses 1,492 1,041 5,365 3,897
Amortization of software
and acquired
technologies 726 371 3,028 1,471
Maintenance and service 3,330 2,038 13,112 7,863
Total cost of sales 5,548 3,450 21,505 13,231
Gross profit 27,706 21,817 92,030 77,780
Operating expenses:
Selling and marketing 7,523 4,997 24,777 20,089
Research and development 6,183 4,693 23,792 19,605
Amortization 281 194 1,055 818
General and
administrative 3,291 2,632 12,089 10,194
Total operating
expenses 17,278 12,516 61,713 50,706
Operating income 10,428 9,301 30,317 27,074
Other (loss) income (141) (215) 357 311
Income before income
tax provision 10,287 9,086 30,674 27,385
Income tax provision 3,086 2,817 9,361 8,426
Net income $7,201 $6,269 $21,313 $18,959
Earnings per share - basic:
Basic earnings per
share $0.47 $0.43 $1.42 $1.30
Weighted average shares
- basic 15,239 14,557 14,958 14,598
Earnings per share - diluted:
Diluted earnings per
share $0.45 $0.41 $1.34 $1.22
Weighted average
shares - diluted 16,398 15,374 15,938 15,594
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended December 31, 2003
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
Revenue:
Software licenses $17,951 $545(a) $18,496
Maintenance and service 15,303 - 15,303
Total revenue 33,254 545 33,799
Cost of sales:
Software licenses 1,492 - 1,492
Amortization of software and
acquired technologies 726 (621)(b) 105
Maintenance and service 3,330 - 3,330
Total cost of sales 5,548 (621) 4,927
Gross profit 27,706 1,166 28,872
Operating expenses:
Selling and marketing 7,523 - 7,523
Research and development 6,183 - 6,183
Amortization 281 (281)(b) -
General and administrative 3,291 - 3,291
Total operating expenses 17,278 (281) 16,997
Operating income 10,428 1,447 11,875
Other (loss) income (141) - (141)
Income before income tax
provision 10,287 1,447 11,734
Income tax provision 3,086 506 (c) 3,592
Net income $7,201 $941 $8,142
Earnings per share - basic:
Basic earnings per share $0.47 $0.54
Weighted average
shares - basic 15,239 15,239
Earnings per share - diluted:
Diluted earnings per share $0.45 $0.50
Weighted average
shares - diluted 16,398 16,398
(a) 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."
(b) 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.
(c) Amount represents the income tax impact of the revenue and
amortization expense adjustments referred to in (a) and (b) above.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended December 31, 2002
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
Revenue:
Software licenses $14,052 $- $14,052
Maintenance and service 11,215 - 11,215
Total revenue 25,267 - 25,267
Cost of sales:
Software licenses 1,041 - 1,041
Amortization of software and
acquired technologies 371 (241)(a) 130
Maintenance and service 2,038 - 2,038
Total cost of sales 3,450 (241) 3,209
Gross profit 21,817 241 22,058
Operating expenses:
Selling and marketing 4,997 - 4,997
Research and development 4,693 - 4,693
Amortization 194 (194)(a) -
General and administrative 2,632 - 2,632
Total operating expenses 12,516 (194) 12,322
Operating income 9,301 435 9,736
Other income (215) - (215)
Income before income
tax provision 9,086 435 9,521
Income tax provision 2,817 152(b) 2,969
Net income $6,269 $283 $6,552
Earnings per share - basic:
Basic earnings per share $0.43 $ 0.45
Weighted average
shares - basic 14,557 14,557
Earnings per share - diluted:
Diluted earnings per share $0.41 $ 0.43
Weighted average
shares - diluted 15,374 15,374
(a) Amount represents amortization expense associated with intangible
assets acquired in business acquisitions, including amounts primarily
related to acquired software, customer list and non-compete
agreements.
(b) Amount represents the income tax impact of the amortization expense
adjustment referred to in (a) above.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the twelve months ended December 31, 2003
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
Revenue:
Software licenses $58,408 $3,000(a) $61,408
Maintenance and service 55,127 - 55,127
Total revenue 113,535 3,000 116,535
Cost of sales:
Software licenses 5,365 - 5,365
Amortization of software and
acquired technologies 3,028 (2,446)(b) 582
Maintenance and service 13,112 - 13,112
Total cost of sales 21,505 (2,446) 19,059
Gross profit 92,030 5,446 97,476
Operating expenses:
Selling and marketing 24,777 - 24,777
Research and development 23,792 - 23,792
Amortization 1,055 (1,055)(b) -
General and administrative 12,089 - 12,089
Total operating expenses 61,713 (1,055) 60,658
Operating income 30,317 6,501 36,818
Other income 357 - 357
Income before income tax
provision 30,674 6,501 37,175
Income tax provision 9,361 2,275(c) 11,636
Net income $21,313 $4,226 $25,539
Earnings per share - basic:
Basic earnings per share $ 1.42 $1.71
Weighted average
shares - basic 14,958 14,958
Earnings per share - diluted:
Diluted earnings per share $1.34 $1.60
Weighted average
shares - diluted 15,938 15,938
(a) 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."
(b) 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.
(c) Amount represents the income tax impact of the revenue and
amortization expense adjustments referred to in (a) and (b) above.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the twelve months ended December 31, 2002
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
Revenue:
Software licenses $48,177 $- $48,177
Maintenance and service 42,834 - 42,834
Total revenue 91,011 - 91,011
Cost of sales:
Software licenses 3,897 - 3,897
Amortization of software and
acquired technologies 1,471 (923)(a) 548
Maintenance and service 7,863 - 7,863
Total cost of sales 13,231 (923) 12,308
Gross profit 77,780 923 78,703
Operating expenses:
Selling and marketing 20,089 - 20,089
Research and development 19,605 - 19,605
Amortization 818 (818)(a) -
General and administrative 10,194 - 10,194
Total operating expenses 50,706 (818) 49,888
Operating income 27,074 1,741 28,815
Other income 311 - 311
Income before income tax
provision 27,385 1,741 29,126
Income tax provision 8,426 609(b) 9,035
Net income $18,959 $1,132 $20,091
Earnings per share - basic:
Basic earnings per share $ 1.30 $1.38
Weighted average
shares - basic 14,598 14,598
Earnings per share - diluted:
Diluted earnings per share $ 1.22 $1.29
Weighted average
shares - diluted 15,594 15,594
(a) Amount represents amortization expense associated with intangible
assets acquired in business acquisitions, including amounts primarily
related to acquired software, customer list and non-compete
agreements.
(b) Amount represents the income tax impact of the amortization expense
adjustment referred to in (a) above.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
December 31, December 31,
2003 2002
ASSETS:
Cash & short-term investments $ 83,015 $61,132
Accounts receivable, net 20,028 15,875
Other assets 76,304 49,994
Total assets $179,347 $127,001
LIABILITIES & STOCKHOLDERS' EQUITY:
Deferred revenue $37,874 $ 26,395
Other liabilities 14,399 9,213
Stockholders' equity 127,074 91,393
Total liabilities & stockholders' equity $179,347 $127,001
SOURCE ANSYS, Inc.
-0- 02/12/2004
/CONTACT: Lisa M. O'Connor, Treasurer of ANSYS, Inc., +1-724-514-1782/
/Web site: http://www.ansys.com
http://www.ansys.com/newsrooms/investor.htm /
(ANSS)
CO: ANSYS, Inc.
ST: Pennsylvania
IN: CPR STW
SU: CCA ERN MAV