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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 4, 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 (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
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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))
Item 9.01 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 November 4, 2004
Item 7.01 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 November 4, 2004, ANSYS, Inc. issued an earnings release announcing its
financial results for the third quarter ended September 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: November 4, 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 Announces Strong Double-Digit Revenue and Earnings Growth
Company Delivers a Record Third Quarter and Increases 2004 Outlook
SOUTHPOINTE, Pa., Nov. 4 /PRNewswire-FirstCall/ -- ANSYS, Inc.
(Nasdaq: ANSS), a global innovator of simulation software and technologies
designed to optimize product development processes, today announced third
quarter results. ANSYS' third quarter GAAP results include:
- Total revenue of $32.3 million, as compared to $28.0 million in the
third quarter of 2003; total revenue of $95.7 million in the first nine
months of 2004 as compared to $80.3 million for the nine months ended
September 30, 2003;
- Diluted earnings per share of $0.23 for the third quarter of 2004 as
compared to $0.17 for the third quarter of 2003; and diluted earnings
per share of $0.68 through September 30, 2004 as compared to $0.45
through September 30, 2003;
- Cash flows from operations of $13.4 million for the third quarter of
2004 and $39.7 million for the first nine months of 2004; and
- Cash and short-term investment balances of $124.3 million, and no debt
as of September 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' third quarter adjusted (non-GAAP) results include:
- Total adjusted revenue of $32.4 million, as compared to $28.9 million
in the third quarter of 2003; total adjusted revenue of $95.9 million
in the first nine months of 2004 as compared to $82.7 million for
the first nine months of 2003;
- An overall adjusted operating profit margin, excluding acquisition-
related amortization, of 35% as compared to 34% for the third quarter
of 2003; and an overall adjusted profit margin, excluding acquisition-
related amortization, of 36% as compared to 30% for the first nine
months of 2003; and
- Adjusted diluted earnings per share of $0.25 as compared to $0.20 for
the third quarter of 2003; and adjusted diluted earnings per share of
$0.74 as compared to $0.55 for the nine-month period ended
September 30, 2003.
Jim Cashman, ANSYS President and CEO, stated, "We are pleased to report
another strong quarter of results that exceeded our expectations. These
results are a good illustration of our long-term strategy in action: leading
the market in customer-focused R&D investment; reinvesting profits to expand
our global sales and marketing reach; and integrating acquisitions that
leverage our investment in business infrastructure to maximize shareholder
return. This strategy has enabled us to deliver on our business and financial
commitments and allows us to continue to build a foundation for future
growth."
Cashman further commented, "We have good momentum as we head into our most
significant quarter of the year and are actively preparing for our next
milestone with the upcoming launch of our latest releases of ANSYS, CFX and
ICEM CFD integrated simulation solutions. Our dedicated employees and
partners throughout the world are committed to working hard to deliver these
solutions for our customers and another record year for ANSYS in 2004."
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 nine months ended September 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, "Management's
2004 Outlook."
On August 5, 2004, the Company announced that its Board of Directors
approved a 2-for-1 stock split of the Company's common shares. The stock
split was payable in the form of a stock dividend and entitled each
stockholder of record at the close of business on September 3, 2004, to
receive one share of common stock for every outstanding share of common stock
held on that date. The stock dividend was distributed on October 4, 2004.
The share data and earnings per share data in this press release give effect
to the stock split, applied retroactively, to all periods presented.
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
business performance, however, these measures are not intended to supersede or
replace the GAAP results.
Management's 2004 Outlook
Based on anticipated revenues and expenditures for the remainder of the
year, the Company currently projects that fourth quarter 2004 GAAP diluted
earnings per share will be in the range of $0.24 - $0.26 and adjusted diluted
earnings per share will be in the range of $0.26 - $0.28. The approximate
$0.02 difference between the GAAP diluted earnings per share estimate and the
adjusted diluted earnings per share estimate discussed above is primarily
related to acquisition-related amortization.
Based on the third quarter year to date results and fourth quarter
estimates mentioned above, the Company currently projects that 2004 fiscal
year GAAP diluted earnings per share will be in the range of $0.92 - $0.94 and
adjusted diluted earnings per share will be in the range of $1.00 - $1.02.
The approximate $0.08 difference between the GAAP diluted earnings per share
estimate and the adjusted diluted earnings per share estimate discussed above
includes an estimated $0.07 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 November 4, to
discuss third 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 November 11, by dialing
866-441-8824. 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' anticipated revenues and expenditures estimates 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 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, ANSYS Workbench, CFX, 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.
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 Nine months ended
September 30, September 30, September 30, September 30,
2004 2003 2004 2003
Revenue:
Software licenses $16,585 $ 14,053 $ 49,262 $40,457
Maintenance and
service 15,733 13,985 46,390 39,824
Total revenue 32,318 28,038 95,652 80,281
Cost of sales:
Software licenses 1,162 1,226 3,678 3,873
Amortization of
software and acquired
technology 758 871 2,267 2,302
Maintenance and
service 3,521 3,199 9,649 9,782
Total cost of sales 5,441 5,296 15,594 15,957
Gross profit 26,877 22,742 80,058 64,324
Operating expenses:
Selling and marketing 5,757 5,646 17,843 17,254
Research and
development 6,611 5,879 19,441 17,609
Amortization 285 276 857 774
General and
administrative 3,763 3,022 10,808 8,798
Total operating
expenses 16,416 14,823 48,949 44,435
Operating income 10,461 7,919 31,109 19,889
Other income (expense) 415 (808) 791 498
Income before income
tax provision 10,876 7,111 31,900 20,387
Income tax provision 3,277 1,750 9,584 6,275
Net income $7,599 $5,361 $22,316 $ 14,112
Earnings per share - basic(a):
Basic earnings per
share $0.24 $0.18 $0.72 $0.47
Weighted average
shares - basic 31,075 30,212 30,835 29,728
Earnings per share - diluted(a):
Diluted earnings per
share $0.23 $0.17 $0.68 $0.45
Weighted average
shares - diluted 33,231 32,472 32,895 31,608
(a) The share data and earnings per share data in this press release give
effect for the two-for-one stock split on October 4, 2004, applied
retroactively, to all periods presented.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended September 30, 2004
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $16,585 $66(a) $16,651
Maintenance and service 15,733 - 15,733
Total revenue 32,318 66 32,384
Cost of sales:
Software licenses 1,162 - 1,162
Amortization of software and
acquired technology 758 (610)(b) 148
Maintenance and service 3,521 - 3,521
Total cost of sales 5,441 (610) 4,831
Gross profit 26,877 676 27,553
Operating expenses:
Selling and marketing 5,757 - 5,757
Research and development 6,611 - 6,611
Amortization 285 (285)(b) -
General and administrative 3,763 - 3,763
Total operating expenses 16,416 (285) 16,131
Operating income 10,461 961 11,422
Other income 415 - 415
Income before income tax
provision 10,876 961 11,837
Income tax provision 3,277 336(c) 3,613
Net income $7,599 $625 $8,224
Earnings per share - basic(d):
Basic earnings per share $0.24 $0.26
Weighted average shares
- basic 31,075 31,075
Earnings per share - diluted(d):
Diluted earnings per share $0.23 $0.25
Weighted average shares
- diluted 33,231 33,231
(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.
(d) The share data and earnings per share data in this press release give
effect for the two-for-one stock split, applied retroactively, to all
periods presented.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended September 30, 2003
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $14,053 $885(a) $14,938
Maintenance and service 13,985 - 13,985
Total revenue 28,038 885 28,923
Cost of sales:
Software licenses 1,226 - 1,226
Amortization of software and
acquired technology 871 (747)(b) 124
Maintenance and service 3,199 - 3,199
Total cost of sales 5,296 (747) 4,549
Gross profit 22,742 1,632 24,374
Operating expenses:
Selling and marketing 5,646 - 5,646
Research and development 5,879 - 5,879
Amortization 276 (276)(b) -
General and administrative 3,022 - 3,022
Total operating expenses 14,823 (276) 14,547
Operating income 7,919 1,908 9,827
Other income (expense) (808) - (808)
Income before income tax
provision 7,111 1,908 9,019
Income tax provision 1,750 668(c) 2,418
Net income $5,361 $ 1,240 $6,601
Earnings per share - basic(d):
Basic earnings per share $0.18 $0.22
Weighted average shares
- basic 30,212 30,212
Earnings per share - diluted(d):
Diluted earnings per share $0.17 $0.20
Weighted average shares
- diluted 32,472 32,472
(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.
(d) The share data and earnings per share data in this press release give
effect for the two-for-one stock split, applied retroactively, to all
periods presented.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the nine months ended September 30, 2004
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $ 49,262 $258(a) $49,520
Maintenance and service 46,390 - 46,390
Total revenue 95,652 258 95,910
Cost of sales:
Software licenses 3,678 - 3,678
Amortization of software and
acquired technology 2,267 (1,829)(b) 438
Maintenance and service 9,649 - 9,649
Total cost of sales 15,594 (1,829) 13,765
Gross profit 80,058 2,087 82,145
Operating expenses:
Selling and marketing 17,843 - 17,843
Research and development 19,441 - 19,441
Amortization 857 (857)(b) -
General and administrative 10,808 - 10,808
Total operating expenses 48,949 (857) 48,092
Operating income 31,109 2,944 34,053
Other income 791 - 791
Income before income tax
provision 31,900 2,944 34,844
Income tax provision 9,584 1,030(c) 10,614
Net income $ 22,316 $ 1,914 $24,230
Earnings per share - basic(d):
Basic earnings per share $0.72 $0.79
Weighted average shares
- basic 30,835 30,835
Earnings per share - diluted(d):
Diluted earnings per share $0.68 $0.74
Weighted average shares
- diluted 32,895 32,895
(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.
(d) The share data and earnings per share data in this press release give
effect for the two-for-one stock split, applied retroactively, to all
periods presented.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the nine months ended September 30, 2003
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Adjusted
Results
Revenue:
Software licenses $ 40,457 $ 2,455(a) $42,912
Maintenance and service 39,824 - 39,824
Total revenue 80,281 2,455 82,736
Cost of sales:
Software licenses 3,873 - 3,873
Amortization of software and
acquired technology 2,302 (1,825)(b) 477
Maintenance and service 9,782 - 9,782
Total cost of sales 15,957 (1,825) 14,132
Gross profit 64,324 4,280 68,604
Operating expenses:
Selling and marketing 17,254 - 17,254
Research and development 17,609 - 17,609
Amortization 774 (774)(b) -
General and administrative 8,798 - 8,798
Total operating expenses 44,435 (774) 43,661
Operating income 19,889 5,054 24,943
Other income 498 - 498
Income before income tax
provision 20,387 5,054 25,441
Income tax provision 6,275 1,769(c) 8,044
Net income $14,112 $ 3,285 $17,397
Earnings per share - basic(d):
Basic earnings per share $0.47 $0.59
Weighted average shares
- basic 29,728 29,728
Earnings per share - diluted(d):
Diluted earnings per share $0.45 $0.55
Weighted average shares
- diluted 31,608 31,608
(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.
(d) The share data and earnings per share data in this press release
give effect for the two-for-one stock split, applied retroactively,
to all periods presented.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
September 30, December 31,
2004 2003
ASSETS:
Cash & short-term investments $124,260 $83,014
Accounts receivable, net 14,716 20,028
Other assets 73,903 77,517
Total assets $212,879 $180,559
LIABILITIES & STOCKHOLDERS' EQUITY:
Deferred revenue $38,726 $37,874
Other liabilities 15,505 15,611
Stockholders' equity 158,648 127,074
Total liabilities & stockholders' equity $212,879 $180,559
SOURCE ANSYS, Inc.
-0- 11/04/2004
/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