UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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 1, 2007
__________________
ANSYS,
INC.
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
0-20853
(Commission
File Number)
|
04-3219960
(I.R.S.
Employer
Identification
No.)
|
|
275
Technology Drive, Canonsburg, PA
(Address
of Principal Executive Offices)
|
15317
(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):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition
On
November 1, 2007, ANSYS, Inc. issued an earnings release announcing its
financial results for the third quarter ended September 30, 2007. 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
|
|||
|
|
|
99.1
|
Press
Release of the Registrant dated November 1,
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: November 1, 2007 | By: | /s/ MARIA T. SHIELDS |
|
Maria T. Shields - Chief Financial Officer, VP of Finance and Administration |
||
| (Ms. Shields is the Principal Financial and Accounting Officer and has been duly authorized to sign on behalf of the Registrant) | ||
INDEX
TO EXHIBITS
|
Exhibit Number
|
|
Description
of Exhibit
|
|
99.1
|
|
Press
Release of the Registrant dated November 1,
2007
|
 |
Contact:
|
|
|
Investors:
|
Maria
Shields
|
|
|
|
724.514.3077
|
|
|
|
maria.shields@ansys.com
|
|
|
|
|
|
|
NEWS
RELEASE
|
Media:
|
Kelly
Wall
|
|
|
724.514.3076
|
|
|
FOR
IMMEDIATE RELEASE
|
|
kelly.wall@ansys.com
|
ANSYS
REPORTS CONTINUED GROWTH MOMENTUM THAT RESULTS IN
STRONGEST
THIRD QUARTER IN COMPANY’S HISTORY,
DRIVEN
BY ORGANIC REVENUE GROWTH
Company
Increases 2007 Guidance and Provides Initial 2008
Outlook
SOUTHPOINTE,
PA - November 1, 2007 -
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 third quarter non-GAAP operating results. The Company has
also provided its initial outlook for the 2008 fiscal year.
Jim
Cashman, President and CEO commented on the company’s third quarter 2007
performance by saying, “This was a very solid quarter for ANSYS. Most notably,
this quarter’s performance stands out as it represents an “apples- to- apples”
comparison of our business with Non-GAAP organic revenue growth at 21.5% (18%
in
constant currencies). We believe that the strength of the results hints at
increasing potential and validates our strategy to engage our customers at
new
levels, driven by the breadth and depth of our world-class simulation
capabilities. It also reinforces the importance of our continued focus on
integration to build the foundation for the future.”
Cashman
continued, ”While a great deal of work remains to be done, our strategies and
vision have continued to be validated. The opportunity over the long haul
appears to be solidifying, and we believe that the ANSYS trajectory of future
technology, coupled with our focus on execution and understanding the business
drivers, should enable us to cope with the challenges of the future. This is
a
real testament to all of our employees, partners and expanding array of
customers that have propelled us in this endeavor. As we close in on this year,
our outlook is positive, our business momentum is good and we are continuing
to
invest to support the needs of our customers and our business, all with an
eye
toward generating long-term shareholder value.”
ANSYS’
third quarter and year-to-date 2007 financial results are presented below.
The
non-GAAP results exclude the income statement effects of stock-based
compensation, purchase accounting for deferred revenue and acquisition-related
amortization of intangible assets. The nine-month results for 2006 also exclude
a one-time charge related to in-process research and development associated
with
the acquisition of Fluent. Non-GAAP and GAAP results reflect:
|
·
|
Total
non-GAAP revenue of $94.0 million in the third quarter of 2007 as
compared
to $77.4 million in the third quarter of 2006; total non-GAAP revenue
of
$275.9 million in the first nine months of 2007 as compared to $191.6
million in the first nine months of 2006; total GAAP revenue of $94.0
million in the third quarter of 2007 as compared to $70.1 million
in the
third quarter of 2006; total GAAP revenue of $274.1 million in the
first
nine months of 2007 as compared to $178.4 million in the first nine
months
of 2006;
|
(more)
|
·
|
A
non-GAAP operating profit margin of 43.8% in the third quarter of
2007 as
compared to 37.1% in the third quarter of 2006; a non-GAAP operating
profit margin of 43.3% in the first nine months of 2007 as compared
to
39.0% in the first nine months of 2006; a GAAP operating profit margin
of
33.6% in the third quarter of 2007 as compared to 18.3% in the third
quarter of 2006; a GAAP operating profit margin of 32.4% in the first
nine
months of 2007 as compared to 9.1% in the first nine months of 2006;
|
|
·
|
Non-GAAP
net income of $25.0 million in the third quarter of 2007 as compared
to
$18.2 million in the third quarter of 2006; non-GAAP net income of
$73.0
million in the first nine months of 2007 as compared to $49.2 million
in
the first nine months of 2006; GAAP net income of $18.7 million in
the
third quarter of 2007 as compared to GAAP net income of $8.4 million
in
the third quarter of 2006; GAAP net income of $53.1 million in the
first
nine months of 2007 as compared to GAAP net income of $1.9 million
in the
first nine months of 2006; and
|
|
·
|
Non-GAAP
diluted earnings per share of $0.31 in the third quarter of 2007
as
compared to $0.23 in the third quarter of 2006; non-GAAP diluted
earnings
per share of $0.90 in the first nine months of 2007 as compared to
$0.66
in the first nine months of 2006; GAAP diluted earnings per share
of $0.23
in the third quarter of 2007 as compared to GAAP diluted earnings
per
share of $0.10 in the third quarter of 2006; GAAP diluted earnings
per
share of $0.66 in the first nine months of 2007 as compared to GAAP
diluted earnings per share of $0.03 in the first nine months of
2006.
|
The
Company’s GAAP results reflect stock-based compensation charges of approximately
$ 2.1 million ($1.7 million after tax) or $0.02 diluted earnings per share
for
the third quarter of 2007 and approximately $6.4 million ($5.3 million after
tax) or $0.06 diluted earnings per share for the first nine months of 2007.
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 nine months ended September 30, 2007 and 2006, and for the 2007
and
2008 financial outlook, is included in the condensed financial information
included in this release.
On
May
14, 2007, 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 May 25, 2007 to receive one share of common stock for every
outstanding share of common stock held on that date. The stock dividend was
distributed on June 4, 2007. The share data and earnings per share data in
this
press release give effect to the stock split, applied retroactively, to all
periods presented.
Management’s
Remaining 2007 and Initial 2008 Financial Outlook
The
Company has provided its 2007 and 2008 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 and
acquisition-related amortization of intangible assets.
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 $1.7 million during the third quarter of 2007 related to
disqualified incentive stock options; however, only $36,000 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.
(more)
Impact
of Adoption of FIN 48
Effective
January 1, 2007, the Company adopted FASB Interpretation No. (FIN) 48,
“Accounting for Uncertainty in Income Taxes” - an Interpretation of SFAS No.
109, “Accounting for Income Taxes.” Pursuant to FIN 48, ANSYS identified,
evaluated and measured the amount of income tax benefits to be recognized for
its income tax positions. The adoption of FIN 48 resulted in an increase to
income tax expense in the third quarter of 2007 of $591,000 and a corresponding
adverse impact on the effective tax rate of 1.9%. Income taxes as a percentage
of GAAP earnings before income taxes were approximately 39.6% in the third
quarter of 2007 as compared to 25.3% in the third quarter of 2006. This rate
fluctuates over time based on the income tax rates in the various jurisdictions
in which the Company operates, and based on the level of profits in those
jurisdictions.
Fourth
Quarter 2007 Guidance
The
Company currently expects the following for the quarter ending December 31,
2007:
|
·
|
GAAP
revenue in the range of $99 - $101 million
|
|
·
|
Non-GAAP
revenue in the range of $99 - $101
million
|
|
·
|
GAAP
diluted earnings per share of $0.23 - $0.24
|
|
·
|
Non-GAAP
diluted earnings per share of $0.32 -
$0.33
|
Fiscal
Year 2007 Guidance
The
Company currently expects the following for the fiscal year ending December
31,
2007:
|
·
|
GAAP
revenue in the range of $373 - $375
million
|
|
·
|
Non-GAAP
revenue in the range of $375 - $377
million
|
|
·
|
GAAP
diluted earnings per share of $0.89 - $0.91
|
|
·
|
Non-GAAP
diluted earnings per share of $1.22 -
$1.23
|
(more)
Fiscal
Year 2008 Guidance
The
Company currently expects the following for the fiscal year ending December
31,
2008:
|
·
|
GAAP
revenue in the range of $425 - $432
million
|
|
·
|
Non-GAAP
revenue in the range of $425 - $432
million
|
|
·
|
GAAP
diluted earnings per share of $1.04 - $1.11
|
|
·
|
Non-GAAP
diluted earnings per share of $1.39 -
$1.42
|
Non-GAAP
revenue and diluted earnings per share are supplemental financial measures
and
should not be considered as a substitute for, or superior to, revenue and
diluted earnings per share determined in accordance with GAAP.
ANSYS
will hold a conference call at 10:30 a.m. Eastern Time on November 1, 2007
to
discuss third quarter results. To participate in the live conference call,
dial
913-312-0841 or 888-218-8184 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.
(more)
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.
(more)
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
Profi
|
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.
(more)
Certain
statements contained in the press release regarding matters that are not
historical facts, including, but not limited to, statements regarding our
projections for revenue and earnings per share for the fourth
quarter
of
2007
and
for
fiscal
years
of
2007 and
2008 (both GAAP and non-GAAP to exclude purchase accounting for deferred
revenue, acquisition-related amortization and stock-based compensation expense),
statements about management's views concerning the Company's prospects in
the
remainder of 2007 and subsequent years, statements and projections relating
to
the impact of stock-based compensation, statements regarding management's
use of
non-GAAP financial measures, statements regarding the impact of the integration
of the Fluent operations, and
our
continued focus on integration to build the foundation for the future,
statements
regarding our increasing potential and integration efforts for the future,
statements regarding the validation of our strategies and vision, including
our strategy to engage customers at new levels, statements regarding the
breadth
and depth of our world-class simulation capabilities, statements
regarding our future opportunities, including the trajectory of our future
technology and our focus on business drivers, statements regarding the expansion
of our array of customers, and statements regarding our outlook, business
momentum and investment in the needs of our customers and business and our
goal
of generating long-term shareholder value 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
2007
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.
(more)
|
ANSYS,
INC. AND SUBSIDIARIES
|
||||||||||
|
Consolidated
Statements of Income
|
||||||||||
|
(in
thousands, except per share data)
|
||||||||||
|
(Unaudited)
|
|
Three
Months Ended
|
Nine
months Ended
|
||||||||||||
|
September
30,
2007
|
September
30,
2006
|
September
30,
2007
|
September
30,
2006
|
||||||||||
|
Revenue:
|
|||||||||||||
|
Software
licenses
|
$
|
61,099
|
$
|
42,213
|
$
|
177,723
|
$
|
103,728
|
|||||
|
Maintenance
and service
|
32,935
|
27,904
|
96,381
|
74,664
|
|||||||||
|
Total
revenue
|
94,034
|
70,117
|
274,104
|
178,392
|
|||||||||
|
Cost
of sales:
|
|||||||||||||
|
Software
licenses
|
2,236
|
1,748
|
6,756
|
4,938
|
|||||||||
|
Amortization
of software and
|
|||||||||||||
|
acquired
technology
|
5,395
|
5,138
|
16,119
|
9,785
|
|||||||||
|
Maintenance
and service
|
11,760
|
10,434
|
34,327
|
22,918
|
|||||||||
|
Total
cost of sales
|
19,391
|
17,320
|
57,202
|
37,641
|
|||||||||
|
Gross
profit
|
74,643
|
52,797
|
216,902
|
140,751
|
|||||||||
|
Operating
expenses:
|
|||||||||||||
|
Selling,
general and administrative
|
26,596
|
24,333
|
80,582
|
58,192
|
|||||||||
|
Research
and development
|
14,198
|
13,295
|
40,846
|
34,274
|
|||||||||
|
Amortization
|
2,239
|
2,314
|
6,647
|
4,018
|
|||||||||
|
In-process
research and development
|
-
|
-
|
-
|
28,100
|
|||||||||
|
Total
operating expenses
|
43,033
|
39,942
|
128,075
|
124,584
|
|||||||||
|
Operating
income
|
31,610
|
12,855
|
88,827
|
16,167
|
|||||||||
|
Interest
expense
|
(1,600
|
)
|
(2,996
|
)
|
(5,549
|
)
|
(5,179
|
)
|
|||||
|
Interest
income
|
1,273
|
941
|
3,248
|
3,717
|
|||||||||
|
Other
(expense) income
|
(337
|
)
|
412
|
(735
|
)
|
335
|
|||||||
|
Income
before income tax provision
|
30,946
|
11,212
|
85,791
|
15,040
|
|||||||||
|
Income
tax provision
|
12,250
|
2,840
|
32,688
|
13,148
|
|||||||||
|
Net
income
|
$
|
18,696
|
$
|
8,372
|
$
|
53,103
|
$
|
1,892
|
|||||
|
Earnings
per share - basic(a):
|
|||||||||||||
|
Basic
earnings per share
|
$
|
0.24
|
$
|
0.11
|
$
|
0.68
|
$
|
0.03
|
|||||
|
Weighted
average shares - basic
|
77,981
|
76,804
|
77,653
|
71,220
|
|||||||||
|
Earnings
per share - diluted(a):
|
|||||||||||||
|
Diluted
earnings per share
|
$
|
0.23
|
$
|
0.10
|
$
|
0.66
|
$
|
0.03
|
|||||
|
Weighted
average shares - diluted
|
81,196
|
80,580
|
80,938
|
75,054
|
|||||||||
(a)
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.
(more)
|
ANSYS,
INC. AND SUBSIDIARIES
|
||||||||
|
Reconciliation
of Non-GAAP Measures
|
||||||||
|
For
the three months ended September 30, 2007
|
||||||||
|
(in
thousands, except percentages and per share
data)
|
||||||||
|
(Unaudited)
|
|
As
Reported
|
Adjustments
|
Non-GAAP
Results
|
||||||||
|
Total
revenue:
|
$
|
94,034
|
$
|
94,034
|
||||||
|
Operating
income
|
31,610
|
$
|
$
9,575(1
|
)
|
41,185
|
|||||
|
Operating
profit margin
|
33.6
|
%
|
43.8
|
%
|
||||||
|
Net
income
|
$
|
18,696
|
$
|
$
6,254(2
|
)
|
$
|
24,950
|
|||
|
Earnings
per share - diluted:
|
||||||||||
|
Diluted
earnings per share
|
$
|
0.23
|
$
|
0.31
|
||||||
|
Weighted
average shares - diluted
|
81,196
|
81,196
|
||||||||
|
(1)
|
Amount
represents $7.5 million of amortization expense associated with intangible
assets acquired in business acquisitions, including amounts primarily
related to acquired software, customer list and non-compete agreements
and
a $2.1 million charge for stock-based compensation in accordance
with SFAS
No. 123R, “Share-Based Payment.”
|
|
(2)
|
Amount
represents the impact of the adjustments to operating income referred
to
in (1) above, adjusted for the related income tax impact of $3.3
million.
|
|
ANSYS,
INC. AND SUBSIDIARIES
|
||||||||
|
Reconciliation
of Non-GAAP Measures
|
||||||||
|
For
the three months ended September 30, 2006
|
||||||||
|
(in
thousands, except per share data)
|
||||||||
|
(Unaudited)
|
|
As
Reported
|
Adjustments
|
Non-GAAP
Results
|
||||||||
|
Total
revenue:
|
$
|
70,117
|
$
|
$
7,264(1
|
)
|
$
|
77,381
|
|||
|
Operating
(loss) income
|
12,855
|
15,872(2
|
)
|
28,727
|
||||||
|
Operating
profit margin
|
18.3
|
%
|
37.1
|
%
|
||||||
|
Net
(loss) income
|
$
|
8,372
|
$
|
$
9,856(3
|
)
|
$
|
18,228
|
|||
|
Earnings
per share - diluted:
|
||||||||||
|
Diluted
earnings per share
|
$
|
0.10
|
$
|
0.23
|
||||||
|
Weighted
average shares - diluted
|
80,580
|
80,580
|
||||||||
|
(1)
|
Amount
represents the revenue not reported during the period as a result
of the
purchase accounting adjustment associated with EITF 01-3, “Accounting
in a Business Combination for Deferred Revenue of an
Acquiree.”
|
|
(2)
|
Amount
represents $7.4 million of amortization expense associated with intangible
assets acquired in business acquisitions, including amounts primarily
related to acquired software, customer list and non-compete agreements,
a
$1.2 million charge for stock-based compensation in accordance with
SFAS
No. 123R, “Share-Based Payment,” as well as the $7.3 million adjustment to
revenue as reflected in (1) above.
|
|
(3)
|
Amount
represents the impact of the adjustments to operating income referred
to
in (2) above, adjusted for the related income tax impact of $6.0
million.
|
(more)
|
ANSYS,
INC. AND SUBSIDIARIES
|
||||||||
|
Reconciliation
of Non-GAAP Measures
|
||||||||
|
For
the nine months ended September 30, 2007
|
||||||||
|
(in
thousands, except percentages and per share
data)
|
||||||||
|
(Unaudited)
|
|
As
Reported
|
Adjustments
|
Non-GAAP
Results
|
||||||||
|
Total
revenue:
|
$
|
274,104
|
$
|
1,829(1
|
)
|
$
|
275,933
|
|||
|
Operating
income
|
88,827
|
30,588(2
|
)
|
119,415
|
||||||
|
Operating
profit margin
|
32.4
|
%
|
43.3
|
%
|
||||||
|
Net
income
|
$
|
53,103
|
$
|
19,921(3
|
)
|
$
|
73,024
|
|||
|
Earnings
per share - diluted:
|
||||||||||
|
Diluted
earnings per share
|
$
|
0.66
|
$
|
0.90
|
||||||
|
Weighted
average shares - diluted
|
80,938
|
80,938
|
||||||||
|
(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 $22.4 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 $6.4 million charge for stock-based compensation in
accordance with SFAS No. 123R, “Share-Based Payment,” as well as the $1.8
million adjustment to revenue as reflected in (1) above.
|
|
(3)
|
Amount
represents the impact of the adjustments to operating income referred
to
in (1) above, adjusted for the related income tax impact of $10.7
million.
|
|
ANSYS,
INC. AND SUBSIDIARIES
|
||||||||
|
Reconciliation
of Non-GAAP Measures
|
||||||||
|
For
the nine months ended September 30, 2006
|
||||||||
|
(in
thousands, except per share data)
|
||||||||
|
(Unaudited)
|
|
As
Reported
|
Adjustments
|
Non-GAAP
Results
|
||||||||
|
Total
revenue:
|
$
|
178,392
|
$
|
13,203(1
|
)
|
$
|
191,595
|
|||
|
Operating
income
|
16,167
|
58,497(2
|
)
|
74,664
|
||||||
|
Operating
profit margin
|
9.1
|
%
|
39.0
|
%
|
||||||
|
Net
(loss) income
|
$
|
1,892
|
$
|
47,288(3
|
)
|
$
|
49,180
|
|||
|
Earnings
per share - diluted:
|
||||||||||
|
Diluted
earnings per share
|
$
|
0.03
|
$
|
0.66
|
||||||
|
Weighted
average shares - diluted
|
75,054
|
75,054
|
||||||||
|
(1)
|
Amount
represents the revenue not reported during the period as a result
of the
purchase accounting adjustment associated with EITF 01-3, “Accounting
in a Business Combination for Deferred Revenue of an
Acquiree.”
|
|
(2)
|
Amount
represents $13.5 million of amortization expense associated with
intangible assets acquired in business acquisitions, including amounts
primarily related to acquired software, customer list and non-compete
agreements, a $3.7million charge for stock-based compensation in
accordance with SFAS No. 123R, “Share-Based Payment,” $28.1 million of
acquired in-process research and development expense that was purchased
in
the Fluent acquisition and immediately expensed, as well as the $13.2
million adjustment to revenue as reflected in (1) above.
|
|
(3)
|
Amount
represents the impact of the adjustments to operating income referred
to
in (2) above, adjusted for the related income tax impact of $11.2
million.
|
(more)
|
ANSYS,
INC. AND SUBSIDIARIES
|
|||||||||
|
Condensed
Consolidated Balance Sheets
|
|||||||||
|
(in
thousands)
|
|||||||||
|
(Unaudited)
|
|
September
30,
|
December
31,
|
||||||
|
2007
|
2006
|
||||||
|
ASSETS:
|
|||||||
|
Cash
& short-term investments
|
$
|
150,867
|
$
|
104,486
|
|||
|
Accounts
receivable, net
|
39,490
|
37,341
|
|||||
|
Goodwill
|
430,728
|
428,959
|
|||||
|
Other
intangibles, net
|
183,965
|
204,115
|
|||||
|
Other
assets
|
120,410
|
103,142
|
|||||
|
Total
assets
|
$
|
925,460
|
$
|
878,043
|
|||
|
LIABILITIES
& STOCKHOLDERS' EQUITY:
|
|||||||
|
Deferred
revenue
|
$
|
113,198
|
$
|
101,226
|
|||
|
Long-term
debt (including current portion)
|
75,501
|
123,320
|
|||||
|
Other
liabilities
|
123,238
|
118,704
|
|||||
|
Stockholders'
equity
|
613,523
|
534,793
|
|||||
|
Total
liabilities & stockholders' equity
|
$
|
925,460
|
$
|
878,043
|
|||
(more)
ANSYS,
INC. AND SUBSIDIARIES
Reconciliation
of Forward-Looking Guidance
Quarter
Ending December 31. 2007
|
Earnings
Per Share Range -
Diluted
|
||||
|
U.S.
GAAP expectation
|
$
|
0.23
- $0.24
|
||
|
Adjustment
to exclude acquisition-related amortization
|
$
|
0.06
|
||
|
Adjustment
to exclude stock-based compensation
|
$
|
0.03
|
||
|
Non-GAAP
expectation
|
$
|
0.32
- $0.33
|
||
ANSYS,
INC. AND SUBSIDIARIES
Reconciliation
of Forward-Looking Guidance
Year
Ending December 31, 2007
|
Earnings
Per Share Range -
Diluted
|
||||
|
U.S.
GAAP expectation
|
$
|
0.89
- $0.91
|
||
|
Adjustment
to exclude purchase accounting adjustments to deferred
revenue
|
$
|
0.01
|
||
|
Adjustment
to exclude acquisition-related amortization
|
$
|
0.22
- $0.23
|
||
|
Adjustment
to exclude stock-based compensation
|
$
|
0.09
|
||
|
Non-GAAP
expectation
|
$
|
1.22
- $1.23
|
||
Reconciliation
of Forward-Looking Guidance
Year
Ending December 31, 2008
|
Earnings
Per Share Range -
Diluted
|
||||
|
U.S.
GAAP expectation
|
$
|
1.04
- $1.11
|
||
|
Adjustment
to exclude acquisition-related amortization
|
$
|
0.19
- $0.21
|
||
|
Adjustment
to exclude stock-based compensation
|
$
|
0.12
- $0.14
|
||
|
Non-GAAP
expectation
|
$
|
1.39
- $1.42
|
||
#
#
#