CIMdata PLM Industry Summary Online Archive
1 May 2008
Financial News
ANSYS, Inc. Starts 2008 With Record First Quarter Results
ANSYS, Inc. announced a new Company record for first quarter non-GAAP operating results.
"ANSYS is off to a strong start in 2008, as evidenced by our record first quarter financial performance. As our products and solutions continue to gain traction, adoption levels continue to increase. Customers are realizing the value our expanded portfolio of advanced technologies can provide. These are certainly exciting times at ANSYS, with continued record performance, the recent announcement of our signing a definitive agreement to purchase Ansoft Corporation, and the continued execution of our long-term strategic vision," stated Jim Cashman, ANSYS President and CEO. "I am very proud of the ANSYS team for delivering another solid quarter, while at the same time planning and finalizing the logistics related to the upcoming closing of the Ansoft acquisition, which is currently anticipated to occur during the second quarter."
ANSYS' first quarter 2008 financial results are presented below. The non-GAAP results exclude the income statement effects of stock-based compensation and acquisition-related amortization of intangible assets. The 2007 non-GAAP results also exclude the effects of purchase accounting adjustments to deferred revenue. Non-GAAP and GAAP results reflect:
• Total revenue of $109.5 million in the first quarter of 2008 as compared to total non-GAAP revenue of $89.6 million and total GAAP revenue of $87.9 million in the first quarter of 2007;
• A non-GAAP operating profit margin of 47.3% in the first quarter of 2008 as compared to 42.6% in the first quarter of 2007; a GAAP operating profit margin of 38.2% in the first quarter of 2008 as compared to 30.5% in the first quarter of 2007;
• Non-GAAP net income of $32.5 million in the first quarter of 2008 as compared to $23.5 million in the first quarter of 2007; GAAP net income of $25.9 million in the first quarter of 2008 as compared to GAAP net income of $16.2 million in the first quarter of 2007; and
• Non-GAAP diluted earnings per share of $0.40 in the first quarter of 2008 as compared to $0.29 in the first quarter of 2007; GAAP diluted earnings per share of $0.32 in the first quarter of 2008 as compared to GAAP diluted earnings per share of $0.20 in the first quarter of 2007.
The Company's GAAP results reflect stock-based compensation charges of approximately $2.8 million ($2.2 million after tax) or $0.03 diluted earnings per share for the first quarter of 2008.
Continuing his comments, Cashman noted, "ANSYS delivered another outstanding quarter highlighted by strong revenue growth and operating margins. Looking ahead, as a result of our solid first quarter results, combined with our second quarter and beyond visibility, we are increasing our outlook for the year. We believe we are well positioned to leverage our extensive customer base, strategic vision, technology leadership, and solid business model, to drive continued growth and momentum during the remainder of 2008."
Management's Remaining 2008 Financial Outlook
The Company has provided its 2008 revenue and earnings per share guidance below. The earnings per share guidance is provided on both a GAAP basis and a non-GAAP basis. Non-GAAP diluted earnings per share excludes charges for stock-based compensation 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. 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 $670,000 during the first quarter of 2008 related to disqualified incentive stock options; however, only $65,000 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.
Second Quarter 2008 Guidance - Excluding future results attributable to the acquisition of Ansoft Corporation The Company currently expects the following for the quarter ending June 30, 2008:
• GAAP revenue in the range of $109 - $111 million
• GAAP diluted earnings per share of $0.28 - $0.29
• Non-GAAP diluted earnings per share of $0.36 - $0.37
Fiscal Year 2008 Guidance - Excluding future results attributable to the acquisition of Ansoft Corporation
The Company currently expects the following for the fiscal year ending December 31, 2008:
• GAAP revenue in the range of $448 - $452 million
• GAAP diluted earnings per share of $1.19 - $1.25
• Non-GAAP diluted earnings per share of $1. 54 - $1.57
Non-GAAP diluted earnings per share is a supplemental financial measure and should not be considered as a substitute for, or superior to, diluted earnings per share determined in accordance with GAAP.
Conference Call Information
ANSYS will hold a conference call at 10:30 a.m. Eastern Time on May 1, 2008 to discuss first quarter results. The replay will be available for one week by dialing 888-203-1112 or 719-457-0820 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.
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