EX-99.1 2 ai3982ex991.txt EXHIBIT 99.1 Exhibit 99.1 ANSYS REPORTS BEST THIRD QUARTER IN COMPANY HISTORY WITH CONTINUED STRONG INCREASES IN REVENUE AND EARNINGS COMPANY RAISES OUTLOOK FOR 2005 SOUTHPOINTE, Pa., Nov. 3 /PRNewswire-FirstCall/ -- ANSYS, Inc. (Nasdaq: ANSS), a global innovator of simulation software and technologies designed to optimize product development processes, today announced third quarter 2005 results. ANSYS' third quarter GAAP results include: - Total revenue of $39.0 million, as compared to $32.3 million in the third quarter of 2004; total revenue of $114.3 million in the first nine months of 2005 as compared to $95.7 million for the nine months ended September 30, 2004; - Net income of $11.2 million, as compared to $7.6 million in the third quarter of 2004; net income of $30.6 million in the first nine months of 2005 as compared to $22.3 million for the first nine months of 2004; - An operating profit margin of 36.7% as compared to 32.4% for the third quarter of 2004; an operating profit margin of 35.9% as compared to 32.5% for the first nine months of 2004; - Diluted earnings per share of $0.33, as compared to $0.23 for the third quarter of 2004; diluted earnings per share of $0.91 through September 30, 2005 as compared to $0.68 for the first nine months of 2004; - Cash flows from operations of $14.2 million for the third quarter of 2005 and $47.1 million for the first nine months of 2005; and - Cash and short-term investment balances totaling $174.5 million as of September 30, 2005. Excluding acquisition-related amortization, ANSYS' third quarter adjusted (non-GAAP) results include: - An adjusted operating profit margin of 39.4% as compared to 35.1% for the third quarter of 2004; an adjusted operating profit margin of 38.8% as compared to 35.3% for the first nine months of 2004; and - Adjusted diluted earnings per share of $0.35 as compared to $0.25 for the third quarter of 2004; and adjusted diluted earnings per share of $0.97 as compared to $0.73 for the nine-month period ended September 30, 2004. Third Quarter 2005 Tax Benefit: The GAAP and adjusted results summarized above include a third quarter tax benefit of $500,000 related to the completion and filing of the Company's 2004 federal and state tax returns. This benefit had the effect of increasing net income by approximately $500,000 in the 2005 third quarter and year-to-date results. "This quarter marked yet another period of strong revenue and earnings growth for the Company," said ANSYS President and CEO Jim Cashman. "As a leader in our industry, we remain focused on the overall direction and health of the business. Looking ahead, our energy and resources will be dedicated to expanding our global markets at a significant pace and striving to develop and deliver innovative engineering simulation solutions to our customers." Mr. Cashman continued, "Our growth in the third quarter continued to be spread across all major geographic regions and among a broad array of industries. We believe that our success is a result of the mounting competitive and market pressures that our customers and businesses, in general, are facing. Our solutions enable customers who are driven to find new ways to create more innovative, higher quality products, to deliver them to market faster and to minimize development and warranty costs." During the third quarter of 2005, ANSYS repurchased approximately 115,000 shares at a total cost of $4.4 million. As of September 30, 2005, 2.0 million shares remain authorized for repurchase under the Company's stock repurchase program. The adjusted results highlighted above, and the adjusted estimates for 2005 discussed below, represent non-GAAP (Generally Accepted Accounting Principles) financial measures. A reconciliation of these measures to the appropriate GAAP measures, for the three months and nine months ended September 30, is included in the condensed financial information included in this release. Adjustments to Reported GAAP Financial Results - Acquisition-Related Amortization: As previously announced, the Company completed its acquisition of Century Dynamics, Inc. in January 2005. In previous years, the Company also acquired CFX, CADOE S.A. and ICEM CFD Engineering. These acquisitions have all been accounted for as purchases, resulting in the recording of a significant amount of 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 acquisition-related amortization. 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 Remainder 2005 and Initial 2006 Outlook Based on anticipated revenues and expenditures for the remainder of 2005, the Company currently projects that fourth quarter 2005 diluted earnings per share, adjusted to exclude acquisition-related amortization, will be in the range of $0.35 to $0.36 based on revenues of $40 to $42 million. The Company's current outlook relative to 2005 fourth quarter GAAP diluted earnings per share estimate will be in the range of $0.33 to $0.34. The Company currently projects that 2006 fiscal year adjusted diluted earning per share will be in the range of $1.45 to $1.47 based on revenues of $175 to $178 million. The preceding estimates do not reflect expenses associated with employee stock options. The Company expects to begin recording stock option expense effective January 1, 2006 in accordance with recent guidance issued by the Securities and Exchange Commission. Adjusted diluted earnings per share is a supplemental non-GAAP financial measure. Due to the ongoing implementation of Statement of Financial Accounting Standards 123R and the uncertainties related to the magnitude of the Company's equity-based compensation expense during fiscal 2006, we are not able to estimate at this time the magnitude of the impact of equity-based compensation expense on our adjusted diluted earnings per share for the 2006 fiscal year. Adjusted diluted earnings per share should not be considered as a substitute for net income per diluted share determined in accordance with GAAP. ANSYS will hold a conference call at 10:30 Eastern Time on November 3, 2005 to discuss third quarter results as well as to provide guidance regarding business prospects. The dial in number is 800-811-8830 or 913-981-4904 and the passcode is "ANSYS." A replay will be available until August 10, by dialing 888-203-1112 or 719-457-0820 and the passcode is "ANSYS" or "26797". 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/corporate/investors.asp. 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 25 strategic sales locations throughout the world, ANSYS, Inc. and its subsidiaries employ approximately 600 people and distribute ANSYS products through a network of channel partners in over 40 countries. Visit http://www.ansys.com for more information. Certain statements contained in the press release regarding matters that are not historical facts, including statements regarding our current estimates for the fourth quarter and full year revenue growth and earnings per share, projections for 2006 and statements regarding the focus of our energy and resources are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. All forward-looking statements in this press release are subject to risks and uncertainties. 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 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 2004 Annual Report and Form 10-K. 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, CFX, AUTODYN, 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 operating profit margin and adjusted diluted earnings per share are discussed in this earnings release because management uses this information in evaluating the results of the continuing operations of the 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 ----------------------- ----------------------- Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Revenue: Software licenses $ 20,978 $ 16,585 $ 61,247 $ 49,262 Maintenance and service 18,057 15,733 53,068 46,390 Total revenue 39,035 32,318 114,315 95,652 Cost of sales: Software licenses 1,334 1,162 3,747 3,678 Amortization of software and acquired technology 877 758 2,665 2,267 Maintenance and service 3,822 3,521 11,476 9,649 Total cost of sales 6,033 5,441 17,888 15,594 Gross profit 33,002 26,877 96,427 80,058 Operating expenses: Selling and marketing 6,432 5,757 19,003 17,843 Research and development 7,667 6,611 22,486 19,441 Amortization 298 285 1,009 857 General and administrative 4,276 3,763 12,851 10,808 Total operating expenses 18,673 16,416 55,349 48,949 Operating income 14,329 10,461 41,078 31,109 Other income 1,141 415 2,800 791 Income before income tax provision 15,470 10,876 43,878 31,900 Income tax provision 4,296 3,277 13,246 9,584 Net income $ 11,174 $ 7,599 $ 30,632 $ 22,316 Earnings per share - basic: Basic earnings per share $ 0.35 $ 0.24 $ 0.97 $ 0.72 Weighted average shares - basic 31,851 31,075 31,670 30,835 Earnings per share - diluted: Diluted earnings per share $ 0.33 $ 0.23 $ 0.91 $ 0.68 Weighted average shares - diluted 33,922 33,231 33,667 32,895
ANSYS, INC. AND SUBSIDIARIES Reconciliation of Non-GAAP Measures For the three months ended September 30, 2005 (in thousands, except per share data) (Unaudited) As Adjusted Reported Adjustments Results ------------ ------------ ------------ Revenue: Software licenses $ 20,978 - $ 20,978 Maintenance and service 18,057 - 18,057 Total revenue 39,035 - 39,035 Cost of sales: Software licenses 1,334 - 1,334 Amortization of software and acquired technology 877 (745)(a) 132 Maintenance and service 3,822 - 3,822 Total cost of sales 6,033 (745) 5,288 Gross profit 33,002 745 33,747 Operating expenses: Selling and marketing 6,432 - 6,432 Research and development 7,667 - 7,667 Amortization 298 (298)(a) - General and administrative 4,276 - 4,276 Total operating expenses 18,673 (298) 18,375 Operating income 14,329 1,043 15,372 Other income 1,141 - 1,141 Income before income tax provision 15,470 1,043 16,513 Income tax provision 4,296 364(b) 4,660 Net income $ 11,174 $ 679 $ 11,853 Earnings per share - basic: Basic earnings per share $ 0.35 $ 0.37 Weighted average shares - basic 31,851 31,851 Earnings per share - diluted: Diluted earnings per share $ 0.33 $ 0.35 Weighted average shares - diluted 33,922 33,922 (a) Amount represents amortization expense associated with intangible assets acquired in business acquisitions, including amounts primarily related to acquired software, customer list and non-compete agreements. (b) Amount represents the income tax impact of the amortization expense adjustments referred to in (a) above. ANSYS, INC. AND SUBSIDIARIES Reconciliation of Non-GAAP Measures For the three months ended September 30, 2004 (in thousands, except per share data) (Unaudited) Adjusted As Reported Adjustments Results ------------ ------------ ------------ Revenue: Software licenses $ 16,585 - $ 16,585 Maintenance and service 15,733 - 15,733 Total revenue 32,318 - 32,318 Cost of sales: Software licenses 1,162 - 1,162 Amortization of software and acquired technology 758 (610)(a) 148 Maintenance and service 3,521 - 3,521 Total cost of sales 5,441 (610) 4,831 Gross profit 26,877 610 27,487 Operating expenses: Selling and marketing 5,757 - 5,757 Research and development 6,611 - 6,611 Amortization 285 (285)(a) - General and administrative 3,763 - 3,763 Total operating expenses 16,416 (285) 16,131 Operating income 10,461 895 11,356 Other income 415 - 415 Income before income tax provision 10,876 895 11,771 Income tax provision 3,277 314(b) 3,591 Net income $ 7,599 $ 581 $ 8,180 Earnings per share - basic: Basic earnings per share $ 0.24 $ 0.26 Weighted average shares - basic 31,075 31,075 Earnings per share - diluted: Diluted earnings per share $ 0.23 $ 0.25 Weighted average shares - diluted 33,231 33,231 (a) Amount represents amortization expense associated with intangible assets acquired in business acquisitions, including amounts primarily related to acquired software, customer list and non-compete agreements. (b) Amount represents the income tax impact of the amortization expense adjustments referred to in (a) above. ANSYS, INC. AND SUBSIDIARIES Reconciliation of Non-GAAP Measures For the nine months ended September 30, 2005 (in thousands, except per share data) (Unaudited)
Adjusted As Reported Adjustments Results ------------ ------------ ------------ Revenue: Software licenses $ 61,247 - $ 61,247 Maintenance and service 53,068 - 53,068 Total revenue 114,315 - 114,315 Cost of sales: Software licenses 3,747 - 3,747 Amortization of software and acquired technology 2,665 (2,258)(a) 407 Maintenance and service 11,476 - 11,476 Total cost of sales 17,888 (2,258) 15,630 Gross profit 96,427 2,258 98,685 Operating expenses: Selling and marketing 19,003 - 19,003 Research and development 22,486 - 22,486 Amortization 1,009 (1,009)(a) - General and administrative 12,851 - 12,851 Total operating expenses 55,349 (1,009) 54,340 Operating income 41,078 3,267 44,345 Other income 2,800 - 2,800 Income before income tax provision 43,878 3,267 47,145 Income tax provision 13,246 1,143 (b) 14,389 Net income $ 30,632 $ 2,124 $ 32,756 Earnings per share - basic: Basic earnings per share $ 0.97 $ 1.03 Weighted average shares - basic 31,670 31,670 Earnings per share - diluted: Diluted earnings per share $ 0.91 $ 0.97 Weighted average shares - diluted 33,667 33,667
(a) Amount represents amortization expense associated with intangible assets acquired in business acquisitions, including amounts primarily related to acquired software, customer list and non-compete agreements. (b) Amount represents the income tax impact of the amortization expense adjustments referred to in (a) above. ANSYS, INC. AND SUBSIDIARIES Reconciliation of Non-GAAP Measures For the nine months ended September 30, 2004 (in thousands, except per share data) (Unaudited)
Adjusted As Reported Adjustments Results ------------ ------------ ------------ Revenue: Software licenses $ 49,262 - $ 49,262 Maintenance and service 46,390 - 46,390 Total revenue 95,652 - 95,652 Cost of sales: Software licenses 3,678 - 3,678 Amortization of software and acquired technology 2,267 (1,829)(a) 438 Maintenance and service 9,649 - 9,649 Total cost of sales 15,594 (1,829) 13,765 Gross profit 80,058 1,829 81,887 Operating expenses: Selling and marketing 17,843 - 17,843 Research and development 19,441 - 19,441 Amortization 857 (857)(a) - General and administrative 10,808 - 10,808 Total operating expenses 48,949 (857) 48,092 Operating income 31,109 2,686 33,795 Other income 791 - 791 Income before income tax provision 31,900 2,686 34,586 Income tax provision 9,584 940(b) 10,524 Net income $ 22,316 $ 1,746 $ 24,062 Earnings per share - basic: Basic earnings per share $ 0.72 $ 0.78 Weighted average shares - basic 30,835 30,835 Earnings per share - diluted: Diluted earnings per share $ 0.68 $ 0.73 Weighted average shares - diluted 32,895 32,895
(a) Amount represents amortization expense associated with intangible assets acquired in business acquisitions, including amounts primarily related to acquired software, customer list and non-compete agreements. (b) Amount represents the income tax impact of the amortization expense adjustments referred to in (a) above. ANSYS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands) (Unaudited)
September 30, December 31, 2005 2004 ------------- ------------ ASSETS: Cash & short-term investments $ 174,472 $ 138,446 Accounts receivable, net 16,448 18,792 Other assets 82,098 82,408 Total assets $ 273,018 $ 239,646 LIABILITIES & STOCKHOLDERS' EQUITY: Deferred revenue $ 46,079 $ 43,906 Other liabilities 17,903 20,271 Stockholders' equity 209,036 175,469 Total liabilities & stockholders' equity $ 273,018 $ 239,646
SOURCE ANSYS, Inc. -0- 11/03/2005 /CONTACT: Lisa O'Connor of ANSYS, Inc., +1-724-514-1782, or lisa.oconnor@ansys.com / /Web site: http://www.ansys.com http://www.ansys.com/corporate/investors.asp /