EX-99.1 2 e18891ex99_1.txt PRESS RELEASE Exhibit 99.1 Autodesk Second Quarter Revenues Increase 32 Percent Pro-Forma Net Income Increases 225 Percent SAN RAFAEL, Calif., Aug. 19 /PRNewswire-FirstCall/ -- Autodesk, Inc. (Nasdaq: ADSK), the world's leading design software and digital content company, today announced financial results for its second fiscal quarter ended July 31, 2004. For the second quarter, Autodesk reported net revenues of $280 million, a 32 percent increase over $212 million reported in the second quarter of the prior year. Second quarter net income was $39 million, or $0.31 per diluted share on a GAAP basis, and $42 million, or $0.34 per diluted share on a pro-forma basis. Pro-forma net income excludes a $4 million pre-tax restructuring charge. Net income in the second quarter of the prior year was $33 million, or $0.29 per diluted share on a GAAP basis, and $12.9 million or $0.11 per diluted share on a pro-forma basis. Pro-forma net income in the second quarter of the prior year excluded a one-time tax benefit of $19.7 million related to the favorable resolution of an industry wide issue regarding foreign sales corporations. "Autodesk had an outstanding quarter by all measures," said Carol Bartz, Autodesk chairman and CEO. "We are executing on all fronts. Our products are strong and the market is responding to their quick implementation, ease of use and fast return on investment." Autodesk's strong performance was driven by increasing penetration of its 3D products, broad adoption of the AutoCAD 2005 family of products, continued success with the subscription and marketing programs and ongoing commitment to improved productivity and efficiency. Revenue from the company's 3D products Autodesk Inventor Series, Autodesk Inventor Professional, Autodesk Revit and Autodesk Revit Series increased 64 percent over the prior year. During the quarter, the company shipped strong new releases of its Inventor product line, the world's best-selling 3D mechanical design software. Inventor 9 allows users to better manage and communicate design data, deliver designs in less time, get their drawings production-ready in the fastest way possible, and learn and deploy the product quickly. Autodesk Revit, the company's 3D building information modeling solution, also saw strong adoption during the quarter, particularly in China. In addition, the AutoCAD 2005 family of products, which launched in March, continues to gain momentum in the market. Customers increasingly recognize AutoCAD's ability to better manage and publish digital design data to communicate project information for mark up and review. Revenue from the AutoCAD family grew 30% over last year. Customers are seeing the value in the Autodesk Subscription Program, called Maintenance on the financial statements. Subscription revenue increased 45 percent over the prior year to $41 million. In addition, deferred revenue from the Subscription program increased $10 million to $107 million. Autodesk continued to demonstrate progress in improving productivity and profitability. Operating margins increased 11 percentage points over the prior year to 18 percent on a GAAP basis. Pro-forma operating margins, which exclude the $4 million restructuring charge, increased 12 percentage points to 19 percent in the quarter. These results demonstrate the significant leverage in the company's business model. "Autodesk continued to execute flawlessly this quarter," said Bartz. "We have already introduced outstanding new releases of our most significant products, including the AutoCAD family and Inventor. We plan to release new versions of other important products later this year, including 3ds max and Revit. Our refreshed product line and focus on improving our productivity position the company for strong future growth." Business Outlook - The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties some of which are set forth below. Q3 Fiscal 2005 Net revenues for the third quarter of fiscal 2005 are expected to be approximately flat with the second quarter of fiscal 2005. Pro-forma earnings per diluted share for the third quarter of fiscal year 2005 are also expected to be approximately flat with the second quarter. GAAP basis earnings per diluted share are expected to be $0.31. Q4 Fiscal 2005 Net revenues for the fourth quarter of fiscal 2005 are expected to be in the range of $310 million to $320 million. Earnings per diluted share for the fourth quarter of fiscal year 2005 are expected to be in the range of $0.49 to $0.53 on a GAAP basis and $0.51 to $0.55 on a pro-forma basis. Full Year Fiscal 2005 For 2005, annual revenue is expected to be in the range of $1.167 billion to $1.177 billion. Earnings per diluted share for the full year are expected to be in the range of $1.48 to $1.52 on a GAAP basis and $1.60 to $1.64 on a pro-forma basis. A reconciliation of the above non-GAAP net income and EPS amounts to the corresponding GAAP net income and EPS amounts is provided at the end of this press release. Safe Harbor Statement This press release contains forward-looking statements that involve risks and uncertainties, including statements in the paragraphs under "Business Outlook" above and other statements regarding our anticipated product releases and performance. Factors that could cause actual results to differ materially include the following: general market and business conditions, failure to achieve sufficient sell-through in our channels for new or existing products, failure of key new applications to achieve anticipated levels of customer acceptance, pricing pressure, failure to achieve anticipated cost reductions, delays in the release of new products and services, failure to achieve continued success in technology advancements, changes in accounting rules, particularly related to stock option expensing, changes in foreign currency rates, failure to successfully integrate new or acquired businesses, financial and business condition of our reseller and distribution channels, renegotiation or termination of royalty or intellectual property arrangements, and failure to grow lifecycle management or collaboration products. Further information on potential factors that could affect the financial results of Autodesk are included in the company's report on Form 10-K for the year ended January 31, 2004, and Form 10-Q for the quarter ended April 30, 2004, which are on file with the Securities and Exchange Commission. Autodesk will host its second quarter earnings announcement today at 5:00 p.m. Eastern Time. The live announcement may be accessed at 800-291-9234 (passcode: 51779734). An audio webcast will also be available beginning at 5:00 p.m. Eastern Time at www.autodesk.com/investor. A replay of this webcast will be maintained on our website for at least twelve months. About Autodesk Autodesk is the world's leading design software and digital content company, offering customers progressive business solutions through powerful technology products and services. Autodesk helps customers in the building, manufacturing, infrastructure, digital media, and wireless data services fields increase the value of their digital design data and improve efficiencies across their entire project lifecycle management processes. For more information about the company, see www.autodesk.com. Autodesk, Inc. Reconciliation of diluted net income per share on a GAAP basis to non-GAAP diluted net income per share Unaudited Three months Three months ended Fiscal year ended ended January 31, 2005 January 31, 2005 October 31, Low end High end Low end High end 2004 of range of range of range of range Diluted net income per share on a GAAP basis $0.31 $0.49 $0.53 $1.48 $1.52 Restructure costs 0.04 0.03 0.03 0.16 0.16 Income tax effect (0.01) (0.01) (0.01) (0.04) (0.04) Non-GAAP diluted net income per share $0.34 $0.51 $0.55 $1.60 $1.64 NOTE: Autodesk, AutoCAD, Autodesk Inventor, 3ds max and Revit are registered trademarks of Autodesk, Inc., and/or Autodesk Canada, Inc. in the United States and/or other countries. All other brand names, product names, or trademarks belong to their respective holders. Investors: Sue Pirri, sue.pirri@autodesk.com, 415-507-6467 John Clancy, john.clancy@autodesk.com 415-507-6373 Press: Nicole Pack, nicole.pack@autodesk.com, 415-507-6282 Autodesk, Inc. Consolidated Statements of Income (In thousands, except per share data) Three Months Ended Six Months Ended July 31, July 31, 2004 2003 2004 2003 (Unaudited) (Unaudited) Net revenues: License and other $238,445 $183,434 $498,954 $370,315 Maintenance 41,133 28,271 78,500 52,156 Total net revenues 279,578 211,705 577,454 422,471 Costs and expenses: Cost of license and other revenues 36,116 32,455 73,701 67,502 Cost of maintenance revenues 4,100 3,591 8,387 6,786 Marketing and sales 105,013 89,864 214,292 182,218 Research and development 58,342 49,664 116,223 101,243 General and administrative 22,946 22,190 50,019 44,174 Restructuring and other 3,717 -- 11,967 -- Total costs and expenses 230,234 197,764 474,589 401,923 Income from operations 49,344 13,941 102,865 20,548 Interest and other income, net 2,179 3,070 4,595 6,342 Income before income taxes 51,523 17,011 107,460 26,890 Income tax (provision) benefit (12,358) 15,591 (25,790) 13,220 Net income $39,165 $32,602 $81,670 $40,110 Basic net income per share $0.34 $0.29 $0.72 $0.36 Diluted net income per share $0.31 $0.29 $0.66 $0.35 Shares used in computing basic net income per share 114,002 111,480 113,094 111,642 Shares used in computing diluted net income per share 125,304 113,460 123,369 113,462 Autodesk, Inc. Pro Forma Consolidated Statements of Income (See pro forma adjustments listed in the tables below) (In thousands, except per share data) Three Months Ended Six Months Ended July 31, July 31, 2004 2003 2004 2003 (Unaudited) (Unaudited) Net revenues: License and other $238,445 $183,434 $498,954 $370,315 Maintenance 41,133 28,271 78,500 52,156 Total net revenues 279,578 211,705 577,454 422,471 Costs and expenses: Cost of license and other revenues 36,116 32,455 73,701 67,502 Cost of maintenance revenues 4,100 3,591 8,387 6,786 Marketing and sales 105,013 89,864 214,292 182,218 Research and development 58,342 49,664 116,223 101,243 General and administrative 22,946 22,190 50,019 44,174 Total costs and expenses 226,517 197,764 462,622 401,923 Income from operations 53,061 13,941 114,832 20,548 Interest and other income, net 2,179 3,070 4,595 6,342 Income before income taxes 55,240 17,011 119,427 26,890 Provision for income taxes (13,258) (4,083) (28,663) (6,454) Pro forma net income $41,982 $12,928 $90,764 $20,436 Basic pro forma net income per share $0.37 $0.12 $0.80 $0.18 Diluted pro forma net income per share $0.34 $0.11 $0.74 $0.18 Shares used in computing basic pro forma net income per share 114,002 111,480 113,094 111,642 Shares used in computing diluted pro forma net income per share 125,304 113,460 123,369 113,462 Three Months Ended Six Months Ended July 31, July 31, 2004 2003 2004 2003 (Unaudited) (Unaudited) A reconciliation between operating expenses on a GAAP basis and pro forma operating expenses is as follows: GAAP costs and expenses $230,234 $197,764 $474,589 $401,923 Restructuring and other (3,717) -- (11,967) -- Pro forma costs and expenses $226,517 $197,764 $462,622 $401,923 A reconciliation between income from operations on a GAAP basis and pro forma income from operations is as follows: GAAP income from operations $49,344 $13,941 $102,865 $20,548 Restructuring and other 3,717 -- 11,967 -- Pro forma income from operations $53,061 $13,941 $114,832 $20,548 A reconciliation between (provision) benefit for income taxes on a GAAP basis and pro forma provision for income taxes is as follows: GAAP (provision) benefit for income taxes $(12,358) $15,591 $(25,790) $13,220 Non-recurring tax benefit -- $(19,674) -- $(19,674) Income tax effect of pro forma adjustments (900) -- (2,873) -- Pro forma provision for income taxes $(13,258) $(4,083) $(28,663) $(6,454) A reconciliation between net income on a GAAP basis and pro forma net income is as follows: GAAP net income $39,165 $32,602 $81,670 $40,110 Restructuring and other 3,717 -- 11,967 -- Non-recurring tax benefit -- (19,674) -- (19,674) Income tax effect of pro forma adjustments (900) -- (2,873) -- Pro forma net income $41,982 $12,928 $90,764 $20,436 A reconciliation between diluted net income per share on a GAAP basis and diluted pro forma net income per share is as follows: GAAP diluted net income per share $0.313 $0.287 $0.662 $0.354 Restructuring and other $0.030 $-- $0.097 -- Non-recurring tax benefit -- $(0.173) -- $(0.173) Income tax effect of pro forma adjustments $(0.007) $-- $(0.023) $-- Pro forma diluted net income per share $0.336 $0.114 $0.736 $0.181 To supplement our consolidated financial statements presented on a GAAP basis, Autodesk uses pro forma measures of operating results, net income and net income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, the pro forma results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted pro forma results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States. Autodesk, Inc. Consolidated Balance Sheets (In thousands) July 31, January 31, 2004 2004 (Unaudited) (Audited) ASSETS: Current assets: Cash and cash equivalents $345,971 $282,249 Marketable securities 76,390 81,275 Accounts receivable, net 156,273 166,816 Inventories 16,312 17,365 Deferred income taxes 21,504 25,410 Prepaid expenses and other current assets 25,953 24,137 Total current assets 642,403 597,252 Marketable securities 149,313 165,976 Computer equipment, software, furniture and leasehold improvements, at cost: Computer equipment, software and furniture 214,615 206,319 Leasehold improvements 34,071 34,526 Less accumulated depreciation (184,269) (174,371) Net 64,417 66,474 Purchased technologies and capitalized software, net 17,030 19,378 Goodwill, net 166,693 160,094 Other assets 9,550 7,986 $1,049,406 $1,017,160 LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $44,315 $52,307 Accrued compensation 84,864 92,830 Accrued income taxes 45,544 50,695 Deferred revenues 149,390 127,276 Other accrued liabilities 61,139 61,814 Total current liabilities 385,252 384,922 Deferred income taxes, net 2,097 7,849 Other liabilities 992 2,746 Stockholders' equity: Preferred stock -- -- Common stock and additional paid-in capital 531,001 473,673 Accumulated other comprehensive loss (9,521) (4,754) Deferred compensation (486) (451) Retained earnings 140,071 153,175 Total stockholders' equity 661,065 621,643 $1,049,406 $1,017,160 Autodesk, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) Six Months Ended July 31, 2004 2003 (Unaudited) Operating Activities Net income $81,670 $40,110 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 25,372 24,129 Stock compensation expense 377 1,013 Net loss on fixed asset disposals 282 -- Write-downs of cost method investments -- 26 Tax benefits from employee stock plans 24,414 -- Restructuring related charges, net 5,648 -- Changes in operating assets and liabilities 884 (17,707) Net cash provided by operating activities 138,647 47,571 Investing Activities Net sales and maturities of available-for-sale marketable securities 20,165 30,839 Business combinations, net of cash acquired (15,775) (13,865) Capital and other expenditures (11,750) (5,150) Other investing activities (1,490) 1,448 Net cash (used in) provided by investing activities (8,850) 13,272 Financing activities Proceeds from issuance of common stock, net of issuance costs 160,879 21,467 Repurchase of common stock (216,410) (45,671) Dividends paid (6,741) (6,680) Net cash used in financing activities (62,272) (30,884) Effect of exchange rate changes on cash and cash equivalents (3,803) 3,088 Net increase in cash and cash equivalents 63,722 33,047 Cash and cash equivalents at beginning of year 282,249 186,377 Cash and cash equivalents at end of period $345,971 $219,424 Supplemental cash flow information: Net cash paid (received) during the period for income taxes $7,365 $(573) Fiscal Year 2005 QTR 1 QTR 2 QTR 3 QTR 4 YTD2005 Financial Statistics (in millions): Total net revenues $297.9 $279.6 $577.5 License and other revenues $260.5 $238.5 $499.0 Maintenance revenues $37.4 $41.1 $78.5 Gross Margin 86% 86% 86% GAAP Operating Expenses $202.5 $190.0 $392.5 GAAP Operating Margin 18% 18% 18% GAAP Net Income $42.5 $39.2 $81.7 GAAP Earnings Per Share (diluted) $0.36 $0.31 $0.66 Pro Forma Operating Expenses (1) (2) $194.2 $186.3 $380.5 Pro Forma Operating Margin (1) (3) 21% 19% 20% Pro Forma Net Income (1) (4) $48.8 $42.0 $90.8 Pro Forma Earnings Per Share (diluted) (1) (5) $0.41 $0.34 $0.74 Total Cash and Marketable Securities $519.4 $571.7 $571.7 Days Sales Outstanding 43 51 51 Capital Expenditures $5.9 $9.9 $15.8 Cash from Operations $55.2 $83.4 $138.6 GAAP Depreciation and Amortization $12.5 $12.9 $25.4 Revenue by Geography (in millions): Americas $121.5 $115.1 $236.6 Europe $108.8 $98.9 $207.7 Asia/Pacific $67.6 $65.6 $133.2 Revenue by Division (in millions) (6): Design Solutions Segment $261.8 $244.3 $506.1 Manufacturing Solutions Division $44.8 $44.2 $89.0 Infrastructure Solutions Division $33.7 $31.9 $65.6 Building Solutions Group $27.2 $28.8 $56.0 Platform Technology Group & Other $156.1 $139.4 $295.5 Discreet Segment $36.1 $35.3 $71.4 Upgrade revenue (in millions): Upgrade revenue $66.2 $46.0 $112.2 Operating Income (Loss) by Segment (in millions)(6): Design Solutions $115.0 $98.8 $213.8 Discreet $1.7 $5.1 $6.8 Unallocated amounts $(63.2) $(54.5) $(117.7) Headcount: Headcount 3,409 3,443 3,443 Common Stock Statistics: Stock Outstanding (Pro Forma EPS Calculation-diluted) 119,283,000 125,304,000 123,369,000 Stock Repurchased 5,182,600 1,659,800 6,842,400 AutoCAD Statistics: Total AutoCAD-based Installed Base* 3,469,400 3,514,600 3,514,600 * Includes prior period adjustment of approximately 28,000 seats. (1) To supplement our consolidated financial statements presented on a GAAP basis, Autodesk uses pro forma measures of operating results, net income and net income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For example, the pro forma results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted pro forma results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States. (2) GAAP Operating Expenses $202.5 $190.0 $-- $-- $392.5 Restructuring and other $(8.3) $(3.7) $-- $-- $(12.0) Pro Forma Operating Expenses $194.2 $186.3 $-- $-- $380.5 (3) GAAP Operating Margin 18% 18% 0% 0% 18% Restructuring and other 3% 1% 0% 0% 2% Pro Forma Operating Margin 21% 19% 0% 0% 20% (4) GAAP Net Income $42.5 $39.2 $-- $-- $81.7 Restructuring and other $8.3 $3.7 $-- $-- $12.0 Income tax effect $(2.0) $(0.9) $-- $-- $(2.9) Pro Forma Net Income $48.8 $42.0 $-- $-- $90.8 (5) GAAP Earnings Per Share (diluted) $0.356 $0.313 $-- $-- $0.662 Restructuring and other $0.069 $0.030 $-- $-- $0.097 Income tax effect $(0.017) $(0.007) $-- $-- $(0.023) Pro Forma Earnings Per Share (diluted) $0.409 $0.336 $-- $-- $0.736 (6) In the first quarter of fiscal 2005, Autodesk modified its segment disclosure. For purposes of comparison with previous periods, the segment data has been restated to reflect the current segment reporting. SOURCE Autodesk, Inc. -0- 08/19/2004 /CONTACT: Investors, Sue Pirri, sue.pirri@autodesk.com, +1-415-507-6467, or John Clancy, john.clancy@autodesk.com, +1-415-507-6373, or Media, Nicole Pack, nicole.pack@autodesk.com, +1-415-507-6282, all of Autodesk, Inc./ /Web site: http://www.autodesk.com / (ADSK) CO: Autodesk, Inc. ST: California IN: CPR STW MLM ITE SU: ERN ERP CCA