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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): July 29, 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 July 29, 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 July 29, 2004, ANSYS, Inc. issued an earnings release announcing its
financial results for the second quarter ended June 30, 2004. 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: July 29, 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 Business Momentum Continues as Company Announces
Solid Second Quarter Financial Results
Management Raises Full Year Outlook
SOUTHPOINTE, Pa., July 29 /PRNewswire-FirstCall/ -- ANSYS, Inc.
(Nasdaq: ANSS), a global innovator of simulation software and technologies
designed to optimize product development processes, today announced second
quarter results. ANSYS' second quarter GAAP results include:
-- Total revenue of $32.0 million, as compared to $27.6 million in the
second quarter of 2003; total revenue of $63.3 million in the first
six months of 2004 as compared to $52.2 for the six months ended
June 30, 2003;
-- Diluted earnings per share of $0.46 as compared to $0.29 for the
second quarter of 2003; and diluted earnings per share of $0.90
through June 30, 2004 as compared to $0.56 for the first six months of
2003;
-- Cash flows from operations of $13.1 million for the second quarter of
2004 and $26.3 million for the first six months of 2004; and
-- Cash and short-term investment balances of $109.4 million, and no debt
as of June 30, 2004.
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' second quarter adjusted (non-GAAP) results include:
-- Total adjusted revenue of $32.1 million, as compared to $28.8 million
in the second quarter of 2003; total adjusted revenue of $63.5 million
in the first six months of 2004 as compared to $53.8 million for the
first six months of 2003;
-- An overall adjusted operating profit margin, excluding acquisition-
related amortization, of 36% as compared to 28% for the second quarter
of 2003; and an overall adjusted profit margin, excluding acquisition-
related amortization, of 36% as compared to 28% for the first six
months of 2003; and
-- Adjusted diluted earnings per share of $0.50 as compared to $0.37 for
the second quarter of 2003; and adjusted diluted earnings per share of
$0.97 compared to $0.69 for the six month period ended June 30, 2003.
Jim Cashman, ANSYS President and CEO, stated, "We are extremely pleased to
report strong revenue, operating margins, earnings per share and cash flow
results for the second quarter and first half of 2004. Over the past several
quarters, the Company has worked hard to integrate our diversified product and
service offerings, grow sales and continue to improve operational
efficiencies, and we are clearly seeing the results of everyone's efforts."
Cashman further commented, "It is quite gratifying to be able to report
solid results, coming on the heels of our 2004 International ANSYS Conference
and the most recent release of our flagship solution, ANSYS 8.1, and our
industry-leading CFD technology, CFX 5.7. We are convinced that the positive
feedback that we have received from our customers and partners throughout the
world is a testimony to the importance of our continued focus on our long-term
mission. Our real success comes by continuing to focus on what we do best --
creating the ultimate engineering simulation suite driven by the needs of our
customers and partners."
In conclusion, Mr. Cashman said, "We believe that we have made great
strides in delivering value to our stockholders as well as delivering
industry-leading solutions that our customers demand."
Recent highlights for the Company include the following:
Product and Technology
-- Released ANSYS 8.1 which features new high-end simulation
capabilities, as well as design process enhancements that enable these
advances to be applied more easily and accurately
-- Broke simulation solution barrier by becoming the first engineering
simulation company to solve a structural analysis model with more than
100 million degrees of freedom (DOF), making it possible for ANSYS
customers to solve models of complete systems
-- Released CFX-5.7 which continues the rapid advancement in CFD core
technology development and leverages the ANSYS technology to increase
integration into the engineering design cycle
-- Advanced its industry-leading meshing tool for CFD and structural
analysis, ANSYS ICEM CFD AND AI*Environment 5.0, providing integration
of the hex meshing and post-processing modules which enables users
abundant control over geometry, mesh and solver setup
Market and Recognition
-- Expanded strategic global CAE partnership with Autodesk, Inc.,
enabling Autodesk to license ANSYS simulation technologies and package
them as an integral part of Autodesk Inventor Professional (AIP)
9.0 product and future releases
-- Named to BusinessWeek's 100 "Hot Growth Companies" for the fifth
time -- one of only four organizations named by BusinessWeek five
times since 1999
-- Named to FORTUNE Small Business magazine's list of the "100 Fastest-
Growing Small Companies in America"
-- Recognized for third consecutive year in Business 2.0's Annual
"B2 100" Ranking of Fastest Growing Technology Companies
-- ANSYS CEO and President named Entrepreneur of the Year for the
technology category at the Ernst & Young Entrepreneur of the Year
Awards for Western Pennsylvania
The adjusted results highlighted above, and the adjusted estimates for
2004 discussed below, represent non-GAAP (Generally Accepted Accounting
Principles) financial measures. A reconciliation of these measures to the
appropriate GAAP measures, for the three and six months ended June 30, is
included in the condensed financial information included in this release. A
discussion of the impact of these items on the Company's outlook for the
remainder of the year is included in the section below titled, "2004 Outlook."
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 impacted 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
adjusted financial information, which excludes the impact of the purchase
accounting adjustment.
* Acquisition-Related Amortization:
As previously discussed, the Company completed its 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.
ANSYS is providing, and has historically provided, its current quarter
GAAP results as well as financial results that have been adjusted for the
impact of the items described above. The Company believes that these non-GAAP
measures supplement its consolidated GAAP financial statements as they provide
a consistent basis for comparison between quarters that are not influenced by
certain non-cash items and are therefore useful to investors in helping them
to better understand the Company's operating results. In certain instances,
such as when intangibles are acquired through business acquisitions or become
fully amortized, amortization expense associated with acquired intangibles
also makes period-to-period comparisons difficult because amortization expense
may appear in one period but not in the comparable period. Management uses
these non-GAAP financial measures internally to evaluate the Company's core
business performance, however, these measures are not intended to supersede or
replace the GAAP results.
Management's 2004 Outlook
Based on the results of the second quarter and assumptions relating to
currently anticipated revenues and expenditures for the remainder of the year,
the Company currently projects that full year GAAP diluted earnings per share
will be in the range of $1.75 - $1.79 and adjusted diluted earnings per share
will be in the range of $1.90 - $1.94. Management previously forecasted
adjusted diluted earnings per share in the range of $1.76 - $1.80 for 2004.
The approximate $0.15 difference between the GAAP diluted earnings per
share estimate and the adjusted diluted earnings per share estimate discussed
above includes an estimated $0.14 related to acquisition-related amortization
and $0.01 related to the purchase accounting adjustment for acquired deferred
revenue.
ANSYS will hold a conference call at 10:30 Eastern Time on July 29, to
discuss second quarter results as well as to provide guidance regarding
business prospects. The dial in number is 888-942-8131 and the passcode is
"ANSYS". A replay will be available until August 5, 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 http://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 more
than 25 strategic sales locations throughout the world, ANSYS, Inc. employs
approximately 550 people and distributes its 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 statements regarding our current estimates
for full year earnings per share, 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. These include the risk of a general economic downturn in one
or more of ANSYS' primary geographic markets, the risk that the assumptions
underlying ANSYS' earnings per share estimates will change or prove
inaccurate, the risk that ANSYS has overestimated its ability to maintain
growth and profitability and control costs in the current economic
environment, 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 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 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 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 2003 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 channel partners provide sales, support and training for
customers. Information about ANSYS, Inc. and its products can be found on the
Worldwide Web at http://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 and allows greater
transparency to supplemental information used by management in its financial
and operational decision making. Management encourages investors to review
the reconciliations of the non-GAAP financial measures to the most directly
comparable GAAP measures that are provided within the financial information
attached to this news release.
ANSYS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
Revenue:
Software licenses $16,353 $13,962 $32,677 $ 26,404
Maintenance and service 15,649 13,681 30,657 25,839
Total revenue 32,002 27,643 63,334 52,243
Cost of sales:
Software licenses 1,179 1,468 2,516 2,647
Amortization of software
and acquired technologies 754 906 1,509 1,431
Maintenance and service 3,045 3,689 6,128 6,583
Total cost of sales 4,978 6,063 10,153 10,661
Gross profit 27,024 21,580 53,181 41,582
Operating expenses:
Selling and marketing 6,032 6,096 12,086 11,608
Research and development 6,483 6,074 12,830 11,730
Amortization 285 275 572 498
General and administrative 3,546 3,132 7,045 5,776
Total operating expenses 16,346 15,577 32,533 29,612
Operating income 10,678 6,003 20,648 11,970
Other income 146 772 376 1,306
Income before income
tax provision 10,824 6,775 21,024 13,276
Income tax provision 3,247 2,303 6,307 4,525
Net income $7,577 $4,472 $14,717 $8,751
Earnings per share - basic:
Basic earnings per share $0.49 $0.30 $0.96 $0.59
Weighted average
shares - basic 15,400 14,859 15,358 14,743
Earnings per share - diluted:
Diluted earnings per share $0.46 $0.29 $0.90 $0.56
Weighted average
shares - diluted 16,483 15,904 16,431 15,679
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended June 30, 2004
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
Revenue:
Software licenses $16,353 $70(a) $16,423
Maintenance and service 15,649 - 15,649
Total revenue 32,002 70 32,072
Cost of sales:
Software licenses 1,179 - 1,179
Amortization of software and
acquired technologies 754 (602)(b) 152
Maintenance and service 3,045 - 3,045
Total cost of sales 4,978 (602) 4,376
Gross profit 27,024 672 27,696
Operating expenses:
Selling and marketing 6,032 - 6,032
Research and development 6,483 - 6,483
Amortization 285 (285)(b) -
General and administrative 3,546 - 3,546
Total operating expenses 16,346 (285) 16,061
Operating income 10,678 957 11,635
Other income 146 - 146
Income before income
tax provision 10,824 957 11,781
Income tax provision 3,247 335(c) 3,582
Net income $7,577 $622 $8,199
Earnings per share - basic:
Basic earnings per share $0.49 $0.53
Weighted average shares - basic 15,400 15,400
Earnings per share - diluted:
Diluted earnings per share $0.46 $0.50
Weighted average
shares - diluted 16,483 16,483
(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 June 30, 2003
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $13,962 $ 1,116(a) $15,078
Maintenance and service 13,681 - 13,681
Total revenue 27,643 1,116 28,759
Cost of sales:
Software licenses 1,468 - 1,468
Amortization of software and
acquired technologies 906 (680)(b) 226
Maintenance and service 3,689 - 3,689
Total cost of sales 6,063 (680) 5,383
Gross profit 21,580 1,796 23,376
Operating expenses:
Selling and marketing 6,096 - 6,096
Research and development 6,074 - 6,074
Amortization 275 (275)(b) -
General and administrative 3,132 - 3,132
Total operating expenses 15,577 (275) 15,302
Operating income 6,003 2,071 8,074
Other income 772 - 772
Income before income
tax provision 6,775 2,071 8,846
Income tax provision 2,303 724(c) 3,027
Net income $4,472 $1,347 $5,819
Earnings per share - basic:
Basic earnings per share $0.30 $ 0.39
Weighted average shares - basic 14,859 14,859
Earnings per share - diluted:
Diluted earnings per share $0.29 $ 0.37
Weighted average
shares - diluted 15,904 15,904
(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 six months ended June 30, 2004
(in thousands, except per share data)
(Unaudited)
Adjusted
As Reported Adjustments Results
Revenue:
Software licenses $32,677 $192(a) $32,869
Maintenance and service 30,657 - 30,657
Total revenue 63,334 192 63,526
Cost of sales:
Software licenses 2,516 - 2,516
Amortization of software and
acquired technologies 1,509 (1,219)(b) 290
Maintenance and service 6,128 - 6,128
Total cost of sales 10,153 (1,219) 8,934
Gross profit 53,181 1,411 54,592
Operating expenses:
Selling and marketing 12,086 - 12,086
Research and development 12,830 - 12,830
Amortization 572 (572)(b) -
General and administrative 7,045 - 7,045
Total operating expenses 32,533 (572) 31,961
Operating income 20,648 1,983 22,631
Other income 376 - 376
Income before income
tax provision 21,024 1,983 23,007
Income tax provision 6,307 694(c) 7,001
Net income $14,717 $1,289 $16,006
Earnings per share - basic:
Basic earnings per share $0.96 $1.04
Weighted average shares - basic 15,358 15,358
Earnings per share - diluted:
Diluted earnings per share $0.90 $0.97
Weighted average
shares - diluted 16,431 16,431
(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 six months ended June 30, 2003
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $26,404 $1,570(a) $27,974
Maintenance and service 25,839 - 25,839
Total revenue 52,243 1,570 53,813
Cost of sales:
Software licenses 2,647 - 2,647
Amortization of software and
acquired technologies 1,431 (1,078)(b) 353
Maintenance and service 6,583 - 6,583
Total cost of sales 10,661 (1,078) 9,583
Gross profit 41,582 2,648 44,230
Operating expenses:
Selling and marketing 11,608 - 11,608
Research and development 11,730 - 11,730
Amortization 498 (498)(b) -
General and administrative 5,776 - 5,776
Total operating expenses 29,612 (498) 29,114
Operating income 11,970 3,146 15,116
Other income 1,306 - 1,306
Income before income
tax provision 13,276 3,146 16,422
Income tax provision 4,525 1,100(c) 5,625
Net income $8,751 $2,046 $10,797
Earnings per share - basic:
Basic earnings per share $0.59 $0.73
Weighted average
shares - basic 14,743 14,743
Earnings per share - diluted:
Diluted earnings per share $0.56 $0.69
Weighted average
shares - diluted 15,679 15,679
(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 amortization expense
adjustment referred to in (a) and (b) above.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
June 30, December 31,
2004 2003
ASSETS:
Cash & short-term investments $109,371 $83,014
Accounts receivable, net 16,652 20,028
Other assets 76,653 77,517
Total assets $202,676 $180,559
LIABILITIES & STOCKHOLDERS' EQUITY:
Deferred revenue $41,760 $37,874
Other liabilities 14,079 15,611
Stockholders' equity 146,837 127,074
Total liabilities & stockholders' equity $202,676 $180,559
SOURCE ANSYS, Inc.
-0- 07/29/2004
/CONTACT: Lisa M. O'Connor, Treasurer of ANSYS, Inc., +1-724-514-1782, or
lisa.oconnor@ansys.com /
/Web site: http://www.ansys.com
http://www.ansys.com/newsrooms/investor.htm /
(ANSS)
CO: ANSYS, Inc.
ST: Pennsylvania
IN: CPR STW
SU: ERN ERP CCA MAV