ANSYS, Inc. Reports Record Revenue and Earnings Results for Fourth Quarter and Fiscal Year 2011

CIMdata PLM Industry Summary Online Archive

23 February 2012

Financial News

ANSYS, Inc. Reports Record Revenue and Earnings Results for Fourth Quarter and Fiscal Year 2011

Highlights

•Fourth quarter GAAP revenue of $198.2 million and non-GAAP revenue of $202.9 million

•Fiscal year 2011 GAAP revenue of $691.4 million and non-GAAP revenue of $701.1 million

•Fourth quarter GAAP diluted earnings per share of $0.50* and non-GAAP diluted earnings per share of $0.68*, including a $0.05 tax charge due to the unanticipated tax rate change discussed below

•Fiscal year 2011 GAAP diluted earnings per share of $1.91* and non-GAAP diluted earnings per share of $2.53*, including a $0.05 tax charge due to the unanticipated tax rate change discussed below

•Operating cash flows of $77.6 million for the fourth quarter and $307.7 million for fiscal year 2011

•Fourth quarter and fiscal year 2011 GAAP operating profit margins of 36.9% and 38.4%, respectively, and non-GAAP operating profit margins of 49.1% and 50.2%, respectively

*Net income and EPS amounts include a $4.8 million, or $0.05 per share, charge related to a tax rate change in Japan that occurred after the Company provided its fourth quarter 2011 financial guidance (see below.)

ANSYS, Inc. reported fourth quarter and fiscal year 2011 results with total non-GAAP revenue up 22% as compared to Q4 2010, while non-GAAP net income increased 7% and was impacted significantly by a $4.8 million charge related to a tax rate change in Japan. 2011 non-GAAP revenue and net income each increased 21% as compared to 2010. Non-GAAP earnings per share were also significantly affected by the $0.05 Japan tax charge and increased 5% for the quarter and 19% for 2011.

Commenting on the Company's fourth quarter and fiscal year 2011 performance, Jim Cashman, ANSYS president & CEO, stated, "We are pleased to announce a strong finish to another milestone quarter and year for ANSYS. 2011 was an exciting year for us on many fronts, including four consecutive quarters of strong revenue, earnings, margins and cash flows, which exceeded our initial annual commitments coming into the year. All major regions saw double-digit revenue growth in both real and constant currencies for the quarter and the year. We closed out the year with the release of ANSYS 14.0®, further strengthening our leadership position with the industry's broadest and deepest suite of advanced engineering simulation technology, enabling customers to predict with confidence that their products will thrive in the real world. Our execution and solid business momentum in 2011, combined with our strong financial results, position us to prevail in the engineering simulation market — and to continue delivering on our promise of long-term value to our stockholders, customers, employees and partners. This was validated late in 2011 when Investor's Business Daily awarded ANSYS a 99 rating on its Composite Ratings of publicly traded companies, placing us among the top one percent of all stocks reviewed by that publication. As more companies around the world recognize the power of simulation, we will continue to strive to expand our presence across a wide array of customers, industries and markets. Everything that we have built and accomplished over the past 41 years gives us confidence that 2012 and beyond will present great opportunities for ANSYS."

ANSYS' fourth quarter and 2011 financial results are presented in the company’s unabridged press release. The 2011 non-GAAP results exclude the income statement effects of acquisition accounting adjustments to deferred revenue, as well as the impact of stock-based compensation, acquisition-related amortization of intangible assets and transaction costs related to the Apache acquisition. The 2010 non-GAAP results exclude the income statement effects of stock-based compensation and acquisition-related amortization of intangible assets.

GAAP and non-GAAP results reflect:

•Total GAAP revenue of $198.2 million in the fourth quarter of 2011 as compared to $166.6 million in the fourth quarter of 2010; total GAAP revenue of $691.4 million in 2011 as compared to $580.2 million in 2010; total non-GAAP revenue of $202.9 million in the fourth quarter of 2011 as compared to $166.6 million in the fourth quarter of 2010; total non-GAAP revenue of $701.1 million in 2011 as compared to $580.2 million in 2010;

•A GAAP operating profit margin of 36.9% in the fourth quarter of 2011 as compared to 39.3% in the fourth quarter of 2010; a GAAP operating profit margin of 38.4% in 2011 as compared to 37.8% in 2010; a non-GAAP operating profit margin of 49.1% in the fourth quarter of 2011 as compared to 49.7% in the fourth quarter of 2010; a non-GAAP operating profit margin of 50.2% in 2011 as compared to 49.5% in 2010;

•GAAP net income of $47.5 million in the fourth quarter of 2011 as compared to $49.1 million in the fourth quarter of 2010; GAAP net income of $180.7 million in 2011 as compared to $153.1 million in 2010; non-GAAP net income of $64.8 million in the fourth quarter of 2011 as compared to $60.6 million in the fourth quarter of 2010; non-GAAP net income of $239.0 million in 2011 as compared to $198.1 million in 2010;

•GAAP diluted earnings per share of $0.50 in the fourth quarter of 2011 as compared to $0.52 in the fourth quarter of 2010; GAAP diluted earnings per share of $1.91 in 2011 as compared to $1.64 in 2010; non-GAAP diluted earnings per share of $0.68 in the fourth quarter of 2011 as compared to $0.65 in the fourth quarter of 2010; non-GAAP diluted earnings per share of $2.53 in 2011 as compared to $2.13 in 2010; and

•Operating cash inflows of $77.6 million in the fourth quarter of 2011 as compared to $25.3 million of cash outflows in the fourth quarter of 2010; operating cash flows of $307.7 million for fiscal year 2011 as compared to operating cash flows of $166.9 million for fiscal year 2010. Operating cash flows in the fourth quarter and fiscal year 2010 included net incremental tax payments of $66.1 million and $55.1, respectively, related to the 2010 restructuring of the Company's Japan subsidiaries.

The fourth quarter and fiscal year 2011 GAAP and non-GAAP results discussed above include approximately $4.8 million, or $0.05 per share, related to income tax expense associated with reductions to the Japanese corporate tax rate, beginning with the 2013 tax year. This legislation, enacted on November 30, 2011, resulted in an additional $4.8 million in deferred tax expense due to the reduction in the value of certain net deferred tax assets of the Company's Japanese subsidiaries. Because of the timing of the enactment date of this legislation, the effects of the legislation on the fourth quarter and fiscal year 2011 results were not considered in the financial guidance most recently provided by the Company on November 3, 2011.

The Company's GAAP results reflect stock-based compensation charges of approximately $6.5 million ($4.8 million after tax) or $0.05 diluted earnings per share for the fourth quarter of 2011 and approximately $23.1 million ($17.5 million after tax) or $0.19 diluted earnings per share for fiscal year 2011.

The non-GAAP financial results highlighted above, and the non-GAAP financial outlook for 2011 and 2012 discussed below, represent non-GAAP financial measures. Reconciliations of these measures to the appropriate GAAP measures for the three and twelve months ended December 31, 2011 and 2010, and for the 2012 financial outlook, are included in the condensed financial information included in this release.

Management's 2012 Financial Outlook

The Company's first quarter and 2012 revenue and earnings per share guidance is provided below. The Company last provided its guidance on November 3, 2011. The previously provided guidance has been updated to factor in unfavorable currency changes that are partially offset by an improved business outlook. 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, the income statement effects of acquisition accounting for deferred revenue, acquisition-related amortization of intangible assets and acquisition-related expenses.

First Quarter 2012 Guidance

The Company currently expects the following for the quarter ending March 31, 2012:

•GAAP Revenue in the range of $182.8 - $189.8 million

•Non-GAAP Revenue in the range of $185.0 - $192.0 million

•GAAP diluted earnings per share of $0.43 - $0.49•Non-GAAP diluted earnings per share of $0.64 - $0.67

Fiscal Year 2012 Guidance

The Company currently expects the following for the fiscal year ending December 31, 2012:

•GAAP revenue in the range of $804.6 - $826.6 million

•Non-GAAP revenue in the range of $808.0 - $830.0 million

•GAAP diluted earnings per share of $2.01 - $2.17

•Non-GAAP diluted earnings per share of $2.77 - $2.87

These statements are forward-looking and actual results may differ materially. 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 February 23, 2012 to discuss fourth quarter and fiscal year 2011 results. 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 pass code 10008769. The archived webcast can be accessed, along with other financial information, on ANSYS' website at http://investors.ansys.com.

For Financial Tables, access the unabridged press release.

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