CIMdata PLM Industry Summary Online Archive

5 November 2009

Financial News

ANSYS, Inc. Reports Solid Revenue Results with Strong Margins and Non-GAAP EPS Outperformance for the Third Quarter 2009

Highlights

•  Non-GAAP revenue of $128.8 million and GAAP revenue of $128.2 million

•  Non-GAAP diluted earnings per share of $0.45, or $0.46 adjusted for restructuring charges and GAAP diluted earnings per share of $0.33

•  Operating cash flows of $34.1 million

•  Non-GAAP operating profit margin of 50.0%; GAAP operating profit margin of 37.2%

ANSYS, Inc. announced third quarter 2009 results.

Commenting on the Company's third quarter 2009 performance, Jim Cashman, ANSYS president & CEO stated, "Our Q3 results continue to reflect a resilient business in a turbulent global economy. Our business model again delivered good operating margins and solid cash flows, driven by a relatively stable organic business in constant currencies. These results are a reflection of our strong value proposition, combined with strong customer relationships built over many years, and our dedicated employees. This also marks the one-year anniversary of the Ansoft acquisition and, even in the current macro environment, we have started to see some stabilization of this business."

Cashman continued, "While we are still facing the realities of ongoing pressure on customer spending and prolonged sales cycles, ANSYS delivered revenue in the upper end of the guidance range, which resulted in overachievement in our non-GAAP earnings. Since we do not know the timing or shape of any global recovery, we have maintained our focus on improving our business and investing in initiatives that will drive our long-term performance, while also continuing our disciplined expense management practices. We are encouraged by our third quarter results and believe that the actions that we have taken to date should position us positively as demand improves."

ANSYS' third quarter 2009 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. These third quarter non-GAAP results include approximately $1.5 million ($1.0 million after tax) of restructuring charges. The year-to-date results include approximately $2.8 million ($1.8 million after tax) of restructuring charges and $2.0 million of second quarter tax benefits related to settlements of tax years previously under audit. Excluding these items, the Company's non-GAAP diluted earnings per share for the three and nine months ended September 30, 2009, would have been $0.46 and $1.25, respectively.

Non-GAAP and GAAP results reflect:

•  Total non-GAAP revenue of $128.8 million in the third quarter of 2009 as compared to $128.8 million in the third quarter of 2008; total non-GAAP revenue of $374.4 million in the first nine months of 2009 as compared to $349.6 million in the first nine months of 2008; total GAAP revenue of $128.2 million in the third quarter of 2009 as compared to $122.2 million in the third quarter of 2008; total GAAP revenue of $366.5 million in the first nine months of 2009 as compared to $343.0 million in the first nine months of 2008;

•  A non-GAAP operating profit margin of 50.0% in the third quarter of 2009 as compared to 45.6% in the third quarter of 2008; a non-GAAP operating profit margin of 47.8% in the first nine months of 2009 as compared to 47.0% in the first nine months of 2008; a GAAP operating profit margin of 37.2% in the third quarter of 2009 as compared to 31.3% in the third quarter of 2008; a GAAP operating profit margin of 33.6% in the first nine months of 2009 as compared to 36.1% in the first nine months of 2008;

•  Non-GAAP net income of $41.4 million in the third quarter of 2009 as compared to $38.7 million in the third quarter of 2008; non-GAAP net income of $114.8 million in the first nine months of 2009 as compared to $105.8 million in the first nine months of 2008; GAAP net income of $30.5 million in the third quarter of 2009 as compared to $25.8 million in the third quarter of 2008; GAAP net income of $78.8 million in the first nine months of 2009 as compared to $79.8 million in the first nine months of 2008; and

•  Non-GAAP diluted earnings per share of $0.45 in the third quarter of 2009 as compared to $0.43 in the third quarter of 2008; non-GAAP diluted earnings per share of $1.25 in the first nine months of 2009 as compared to $1.25 in the first nine months of 2008; GAAP diluted earnings per share of $0.33 in the third quarter of 2009 as compared to $0.29 in the third quarter of 2008; GAAP diluted earnings per share of $0.86 in the first nine months of 2009 as compared to $0.94 in the first nine months of 2008.

•  Operating cash flows of $34.1 million in the third quarter of 2009 as compared to $42.7 million in the third quarter of 2008; operating cash flows of $128.8 million in the first nine months of 2009 as compared to operating cash flows of $135.0 million in the first nine months of 2008.

The Company's GAAP results reflect stock-based compensation charges of approximately $3.2 million ($2.5 million after tax) or $0.03 diluted earnings per share for the second quarter of 2009 and approximately $9.3 million ($7.4 million after tax) or $0.08 diluted earnings per share for the first nine months of 2009. The non-GAAP financial results highlighted above, and the non-GAAP financial outlook for 2009 and 2010 discussed below, represent non-GAAP financial measures. Reconciliations of these measures to the appropriate GAAP measures, for the three and nine months ended September 30, 2009 and 2008, and for the 2009 financial outlook, are included in the condensed financial information included in this release.

Management's Remaining 2009 and Preliminary 2010 Financial Outlook

The Company is providing its 2009 revenue and earnings per share guidance below, as well as its preliminary outlook for 2010. The 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 effects of purchase accounting for deferred revenue and acquisition-related amortization of intangible assets.

Fourth Quarter 2009 Guidance

The Company currently expects the following for the quarter ending December 31, 2009:

•  GAAP revenue in the range of $135.8 - $141.8 million

•  Non-GAAP revenue in the range of $136 - $142 million

•  GAAP diluted earnings per share of $0.34 - $0.38

•  Non-GAAP diluted earnings per share of $0.47 - $0.49

Fiscal Year 2009 Guidance

The Company currently expects the following for the fiscal year ending December 31, 2009:

•  GAAP revenue in the range of $502.3 - $508.3 million

•  Non-GAAP revenue in the range of $510.4 - $516.4 million

•  GAAP diluted earnings per share of $1.20 - $1.24

•  Non-GAAP diluted earnings per share of $1.72 - $1.74

Fiscal Year 2010 Preliminary Outlook

The Company currently expects the following for the fiscal year ending December 31, 2010:

•  GAAP revenue growth: 8% - 13%

•  GAAP operating margin: 35% - 37%

•  GAAP tax rate: 34% - 36%

•  GAAP diluted EPS growth: 8% - 18%

•  Non-GAAP revenue growth: 6% - 11%

•  Non-GAAP operating margin: 47% - 49%

•  Non-GAAP tax rate: 34% - 36%

•  Non-GAAP diluted EPS growth: 5% - 10%

The fourth quarter and fiscal year 2009 guidance excludes restructuring charges, as well as certain tax-related items as follows:

Excluded from fourth quarter 2009 guidance:

•  Non-recurring pre-tax restructuring charges of approximately $1.1 - $1.9 million associated with continued headcount right-sizing initiatives.

•  Up to $3 million in tax charges related to cash repatriation activities that are expected to occur in the fourth quarter.

Excluded from fiscal year 2009 guidance:

•  Non-recurring pre-tax restructuring charges of approximately $3.9 - $4.7 million associated with headcount right-sizing initiatives, $2.8 million of which was recorded in the results for the nine months ended September 30, 2009.

•  Up to $3 million in tax charges related to cash repatriation activities that are expected to occur in the fourth quarter.

•  Approximately $2 million in tax benefits related to settlements of tax years previously under audit, all of which was recorded in the results for the nine months ended September 30, 2009.

Conference Call Information

ANSYS will hold a conference call at 10:30 a.m. Eastern Time on November 5, 2009 to discuss third quarter results. The call will be recorded and a replay will be available approximately one hour after the call ends. The replay will be available for ten days by dialing 877-344-7529 (US), or 412-317-0088 (Canada and Int'l) and entering the passcode 434689. The archived webcast can be accessed, along with other financial information, on ANSYS' website at http://investors.ansys.com.

Become a member of the CIMdata PLM Community to receive your daily PLM news and much more.

Tell us what you think of the CIMdata Newsletter. Send your feedback.

CIMdata is committed to your privacy. Your personal information will never be sold or shared outside of CIMdata without your express permission.

Subscribe