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Second Quarter Results Set Path for a Year of Record Results
SOUTHPOINTE, Pa., Aug. 2 /PRNewswire-FirstCall/ -- 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 second quarter non-GAAP operating results.
Commenting on the second quarter performance, Jim Cashman, ANSYS
President and CEO stated, "This quarter's results continue the momentum
that we have seen building over the past several quarters and reflect the
strength of our diversified global business. We have made encouraging
progress during the recent quarter and first half of 2007 to capture the
strength of combining the ANSYS and Fluent businesses into a broad
portfolio of unprecedented engineering simulation solutions. Compared to a
year ago, this quarter's non- GAAP revenues increased over 35% while
non-GAAP diluted earnings per share increased 43%. We have also continued
to focus on strengthening our margins and balance sheet. These efforts
produced record cash flows from operations of $37 million for the second
quarter and $59 million for the first six months of 2007. Based on our
first half performance, we are increasing our 2007 full year guidance and
believe we are poised to drive 2007 to be the most successful year in the
Company's 37 year history."
ANSYS' second 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 2006 non-GAAP
results 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 $92.3 million in the second quarter of 2007
as compared to $68.2 million in the second quarter of 2006; total non-
GAAP revenue of $181.9 million in the first six months of 2007 as
compared to $114.2 million in the first six months of 2006; total GAAP
revenue of $92.2 million in the second quarter of 2007 as compared to
$62.3 million in the second quarter of 2006; total GAAP revenue of
$180.1 million in the first six months of 2007 as compared to $108.3
million in the first six months of 2006;
-- A non-GAAP operating profit margin of 43.4% in the second quarter of
2007 as compared to 38.1% in the second quarter of 2006; a non-GAAP
operating profit margin of 43.0% in the first six months of 2007 as
compared to 40.2% in the first six months of 2006; a GAAP operating
profit margin of 33.0% in the second quarter of 2007 as compared to
(23.3%) in the second quarter of 2006; a GAAP operating profit margin
of 31.8% in the first six months of 2007 as compared to 3.1% in the
first six months of 2006;
-- Non-GAAP net income of $24.6 million in the second quarter of 2007 as
compared to $16.5 million in the second quarter of 2006; non-GAAP net
income of $48.1 million in the first six months of 2007 as compared to
$31.0 million in the first six months of 2006; GAAP net income of $18.3
million in the second quarter of 2007 as compared to GAAP net loss of
$19.4 million in the second quarter of 2006; GAAP net income of $34.4
million in the first six months of 2007 as compared to GAAP net loss of
$6.5 million in the first six months of 2006; and
-- Non-GAAP diluted earnings per share of $0.30 in the second quarter of
2007 as compared to $0.21 in the second quarter of 2006; non-GAAP
diluted earnings per share of $0.59 in the first six months of 2007 as
compared to $0.43 in the first six months of 2006; GAAP diluted
earnings per share of $0.23 in the second quarter of 2007 as compared
to GAAP diluted loss per share of ($0.27) in the second quarter of
2006; GAAP diluted earnings per share of $0.43 in the first six months
of 2007 as compared to GAAP diluted loss per share of ($0.09) in the
first six months of 2006.
The Company's GAAP results reflect stock-based compensation charges of
approximately $2.1 million ($1.8 million after tax) or $0.02 diluted
earnings per share for the second quarter of 2007 and approximately $4.3
million ($3.6 million after tax) or $0.04 diluted earnings per share for
the first six 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 six months ended June 30, 2007 and 2006,
and for the 2007 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 Financial Outlook
The Company has provided its 2007 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, 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 approximately $2.0 million during the first six months of 2007
related to disqualified incentive stock options; however, only $137,000 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.
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 second quarter and first six
months of 2007 of $470,000 and $1.1 million, respectively, and a
corresponding adverse impact on the effective tax rate of 1.6% and 1.9%,
respectively. Income taxes as a percentage of GAAP earnings before income
taxes were approximately 37% in each of the first two quarters of 2007.
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.
Third Quarter 2007 Guidance
The Company currently expects the following for the quarter ending
September 30, 2007:
-- GAAP revenue in the range of $89 - $90 million
-- Non-GAAP revenue in the range of $89 - $90 million
-- GAAP diluted earnings per share of $0.18 - $0.20
-- Non-GAAP diluted earnings per share of $0.26 - $0.27
Fiscal Year 2007 Guidance
The Company currently expects the following for the fiscal year ending
December 31, 2007:
-- GAAP revenue in the range of $367 - $371 million
-- Non-GAAP revenue in the range of $369 - $373 million
-- GAAP diluted earnings per share of $0.79 - $0.84
-- Non-GAAP diluted earnings per share of $1.14 - $1.16
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 August
2, 2007 to discuss second quarter results. To participate in the live
conference call, dial 913-312-6673 or 866-293-8973 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.
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 second 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.
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 Profit 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.
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 third
quarter and fiscal year 2007 (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, including the possibility of 2007 being a record year for company
results and the most successful year in the Company's history, statements
and projections relating to the impact of stock-based compensation,
statements regarding management's use of non-GAAP financial measures,
statements regarding the strength of our diversified global business,
statements regarding our momentum, statements regarding our progress during
the recent quarter and first half of 2007, statements regarding the
strength of combining the ANSYS and Fluent businesses, statements regarding
the unprecedented nature of our engineering simulation solutions,
statements regarding our continued focus on strengthening our margins and
balance sheet, statements regarding record cash flows from operations, and
statements regarding our positioning to drive 2007 to be the most
successful year in the Company's history, 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.
ANSYS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Revenue:
Software licenses $59,412 $34,763 $116,624 $61,515
Maintenance and
service 32,799 27,501 63,446 46,760
Total revenue 92,211 62,264 180,070 108,275
Cost of sales:
Software licenses 2,308 1,700 4,520 3,190
Amortization of
software and
acquired technology 5,382 3,739 10,724 4,647
Maintenance and
service 11,241 8,014 22,567 12,484
Total cost
of sales 18,931 13,453 37,811 20,321
Gross profit 73,280 48,811 142,259 87,954
Operating expenses:
Selling, general
and administrative 27,095 22,020 53,986 33,859
Research and
development 13,576 11,622 26,648 20,979
Amortization 2,213 1,576 4,408 1,704
In-process research
and development - 28,100 - 28,100
Total operating
expenses 42,884 63,318 85,042 84,642
Operating income (loss) 30,396 (14,507) 57,217 3,312
Interest expense (1,966) (2,179) (3,949) (2,183)
Interest income 1,113 1,260 1,975 2,776
Other expense (482) (263) (398) (77)
Income before income
tax provision 29,061 (15,689) 54,845 3,828
Income tax provision 10,805 3,704 20,438 10,308
Net income (loss) $18,256 $(19,393) $34,407 $(6,480)
Earnings per share -
basic(a):
Basic earnings
per share $0.24 $(0.27) $0.44 $(0.09)
Weighted average
shares - basic 77,611 72,612 77,488 68,428
Earnings per share -
diluted(a):
Diluted earnings (loss)
per share $0.23 $(0.27) $0.43 $(0.09)
Weighted average
shares - diluted 80,886 72,612 80,809 68,428
(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.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended June 30, 2007
(in thousands, except percentages and per share data)
(Unaudited)
As Reported Adjustments Non-GAAP Results
Total revenue: $92,211 $ 69(1) $92,280
Operating income 30,396 9,671(2) 40,067
Operating profit margin 33.0% 43.4%
Net income $ 18,256 $6,365(3) $24,621
Earnings per share - diluted(a):
Diluted earnings per share $0.23 $0.30
Weighted average shares
- diluted 80,886 80,886
(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 $7.5 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 $2.1 million charge for stock-based
compensation in accordance with SFAS No. 123R, "Share-Based Payment,"
as well as the $69,000 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 $3.3 million.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the three months ended June 30, 2006
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Non-GAAP Results
Total revenue: $62,264 $5,939(1) $68,203
Operating (loss) income (14,507) 40,480(2) 25,973
Operating profit margin (23.3%) 38.1%
Net (loss) income $(19,393) $35,850(3) $16,457
Earnings per share - diluted(a):
Diluted (loss)
earnings per share $(0.27) $0.21
Weighted average shares
- diluted 72,612 4,208(4) 76,820
(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 $5.2 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, $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 $5.9 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 $4.6 million.
(4) Amount represents common stock equivalents that are dilutive in the
calculation of non-GAAP diluted earnings per share.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the six months ended June 30, 2007
(in thousands, except percentages and per share data)
(Unaudited)
As Reported Adjustments Non-GAAP Results
Total revenue: $180,070 $1,829(1) $181,899
Operating income 57,217 21,013(2) 78,230
Operating profit margin 31.8% 43.0%
Net income $34,407 $13,667(3) $48,074
Earnings per share - diluted(a):
Diluted earnings per share $0.43 $0.59
Weighted average shares
- diluted 80,809 80,809
(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 $14.9 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 $4.3 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 (2) above, adjusted for the related income tax impact
of $7.3 million.
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
For the six months ended June 30, 2006
(in thousands, except per share data)
(Unaudited)
As Reported Adjustments Non-GAAP Results
Total revenue: $108,275 $5,939(1) $114,214
Operating income 3,312 42,625(2) 45,937
Operating profit margin 3.1% 40.2%
Net (loss) income $(6,480) $37,432(3) $30,952
Earnings per share - diluted(a):
Diluted (loss)
earnings per share $(0.09) $0.43
Weighted average shares
- diluted 68,428 4,106(4) 72,534
(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 $6.1 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 $2.5 million charge for stock-based
compensation, $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 $5.9 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 $5.2 million.
(4) Amount represents common stock equivalents that are dilutive in the
calculation of non-GAAP diluted earnings per share.
ANSYS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
June 30, December 31,
2007 2006
ASSETS:
Cash & short-term investments $137,971 $104,486
Accounts receivable, net 41,079 37,341
Goodwill 431,624 428,959
Other intangibles, net 189,723 204,115
Other assets 106,394 103,142
Total assets $906,791 $878,043
LIABILITIES & STOCKHOLDERS' EQUITY:
Deferred revenue $124,660 $101,226
Long-term debt (including current portion) 98,459 123,320
Other liabilities 104,277 118,704
Stockholders' equity 579,395 534,793
Total liabilities & stockholders' equity $906,791 $878,043
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Quarter Ending September 30, 2007
Earnings Per Share
Range - Diluted
U.S. GAAP expectation $0.18 - $0.20
Adjustment to exclude purchase accounting
adjustments to deferred revenue -
Adjustment to exclude acquisition-related
amortization $0.05 - $0.06
Adjustment to exclude stock-based compensation $0.02
Non-GAAP expectation $0.26 - $0.27
ANSYS, INC. AND SUBSIDIARIES
Reconciliation of Forward-Looking Guidance
Year Ending December 31, 2007
Earnings Per Share
Range - Diluted
U.S. GAAP expectation $0.79 - $0.84
Adjustment to exclude purchase accounting
adjustments to deferred revenue $0.01 - $0.02
Adjustment to exclude acquisition-related
amortization $0.22 - $0.23
Adjustment to exclude stock-based
compensation $0.09 - $0.10
Non-GAAP expectation $1.14 - $1.16
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