ANSYS Announces Comparative Revenue Growth of 22% and Adjusted Earnings Per Share Growth of 26% for the First Quarter of 2001

Apr 18, 2001, 01:00 ET from ANSYS, Inc.

    SOUTHPOINTE, Pa., April 18 /PRNewswire/ -- ANSYS, Inc. (Nasdaq:   ANSS), a
 global leader in design analysis and optimization software, today announced
 first quarter 2001 results. ANSYS' first quarter results, excluding the impact
 of a modification in annual lease revenue recognition, discussed below, and
 acquisition-related amortization, reflect:
 
    -- A 22% increase in total adjusted revenue to $21.3 million from
        $17.4 million in the first quarter of 2000, including a 17% increase in
        software license revenue and a 31% increase in maintenance and service
        revenue.
    -- An overall gross profit margin of 87% and an operating margin,
        excluding total amortization, of 34%.
     -- A 26% increase in first quarter adjusted earnings per share to $0.34
       from $0.27 in the first quarter of 2000.
     -- Cash flows from operations of $6.3 million in the first quarter of
        2001.
 
     Impact of Modification of Annual Lease Revenue Recognition:
     ANSYS' first quarter results reflect the effects of a modification of its
 previous revenue recognition policy for annual software leases to be compliant
 with a new Technical Practice Aid ("TPA") issued by the AICPA.  ANSYS'
 previous policy was to recognize a portion of the license fee from annual
 leases as software license revenue upon inception or renewal of the lease,
 while the remaining portion was recognized ratably over the remaining lease
 period.  The TPA now requires all revenue from annual software lease licenses
 to be recognized ratably over the annual lease term.  This results in more of
 the revenue being recognized from annual software leases over the life of the
 leases and less of the revenue being recognized upon the inception or renewal
 of these leases than under ANSYS' previous policy.
     This modification reduced the Company's first quarter reported revenue by
 approximately $3 million; however, it will not have any effect on ANSYS'
 current cash flow or its revenue and operating results over the term of the
 relevant leases.  Additionally, it should improve the visibility with respect
 to the Company's future revenue, as approximately $3 million of software
 license revenue from first quarter annual leases will be recognized over the
 remaining terms of the leases.
     As a result of the change in its revenue recognition policy, ANSYS'
 reported financial results are not for the current quarter, and will not be
 for subsequent quarters, comparable with prior periods.  Additionally, sales
 and renewals of annual lease licenses have historically been most significant
 in the first quarter of the fiscal year.  As a result, management anticipates
 that the magnitude of the impact of this modification will be most apparent in
 the first quarter as compared to the remaining quarters in 2001.  To ensure
 that investors and other interested parties can compare the current quarter
 results to historical results, ANSYS is providing its reported financial
 results, as well as its results adjusted for the impact of the revenue policy
 modification.
 
     First Quarter 2001 Comparative Results:
     ANSYS reported $18.2 million in revenue and $0.21 adjusted diluted
 earnings per share for the first quarter of 2001.  On a comparative basis, had
 the accounting revenue recognition modification not been made, ANSYS would
 have reported first quarter 2001 revenue of $21.3 million, an increase of
 22.4%, compared to $17.4 million reported in the first quarter of 2000.  The
 Company also would have reported adjusted diluted earnings per share of $0.34,
 excluding acquisition-related amortization and the effects of the previously
 mentioned accounting modification, based on 15.5 million weighted average
 common shares outstanding.  In the first quarter of 2000, ANSYS reported $0.27
 diluted earnings per share, based on 16.8 million weighted average common
 shares outstanding.
     Geographically, the first quarter of 2001 reflected notably strong sales
 growth in the Company's General International Area, predominantly led by
 Japan, while sales in North America and Europe remained relatively stable.
 Excluding the impact of the accounting modification, software license revenue
 grew 17% and maintenance and service revenue grew 31% in the quarter.
 Operating income, excluding the effects of the accounting modification and
 total amortization, rose 32% resulting in an overall operating profit margin
 of 34%.  The strong operating performance resulted in $6.3 million in cash
 generated from the Company's operating activities in the first quarter of
 2001.
     Jim Cashman, ANSYS President and CEO, stated, "The challenging economic
 environment has put even greater pressure on companies to bring products more
 efficiently to market while maintaining the highest of quality and safety
 standards.  This market dynamic validates our market strategy and product
 positioning, and creates increasing demand for ANSYS' products and services.
 We remain optimistic about the future and continue to see new commitments to
 ANSYS solutions from key customers across all major industries and
 geographies, including Mitsubishi Electric, IBM, Dresser Industries, Denso,
 Raytheon, Nippon Telegraph and Telephone, Alstom and Robert Bosch."
     Cashman continued, "We are proud of the operating accomplishments made
 during the first quarter and our continued rapid pace of innovation.  We
 continue to believe that our geographical and industry breadth provides some
 insulation from economic slowdowns.  However, we are closely watching market
 conditions and customer buying patterns.  In March, we announced DesignSpace
 6.0, the latest up-front simulation tool available in ANSYS' complete range of
 computer-aided engineering software solutions.  During the quarter we also
 presented our first College Design Engineering Award to the University of
 Evansville, Indiana.  ANSYS, which participates in numerous university
 partnerships, believes that education of users in the university environment
 will expand adoption of our technology."
     Cashman further commented,  "ANSYS repurchased a total of 978,487 shares
 at a total cost of $11.2 million in the first quarter of 2001, and continues
 to maintain an active open market repurchase program.  We also experienced
 strong operating cash flow and ended the quarter with approximately
 $42 million in cash and short-term investments on our balance sheet."
     ANSYS will hold a conference call at 5:30 P.M. Eastern Time on April 18,
 2001 to discuss first quarter results and the Company's business prospects.
 The dial in number is 800-857-7001 and the passcode is "ANSYS."  A replay will
 be available until April 20th by dialing 888-568-0627.  The conference call
 will be webcast live and can be accessed, along with other financial
 information, on the Company's website, located at www.ansys.com.
 
     Some matters discussed in this news release constitute forward-looking
 statements under the "safe harbor" provisions of the Private Securities
 Litigation Reform Act of 1995 that involve risks and uncertainties.  These
 forward looking statements include guidance relative to the impact of an
 accounting modification and the resulting improvement in visibility of the
 Company's future revenue, comments regarding the challenging economic
 environment putting pressure on companies to bring products to market more
 efficiently while maintaining the highest of quality and safety standards,
 economic conditions increasing the demand for the Company's products and
 services, validation of our market strategy and product positioning, believing
 that education of users in the university environment will expand adoption of
 our technology and optimism about future periods.
     All forward looking statements in this press release are subject to risks
 and uncertainties, such as a general economic downturn in one or more of the
 Company's primary geographic markets, failure to correctly anticipate the
 effects of a general economic downturn on the demand for the Company's
 products and services, risks of problems arising from customer contract
 cancellations, uncertainties regarding customer acceptance of new products,
 possible delays in developing, completing, or shipping new or enhanced
 products, changes in the price of our common stock affecting our willingness
 to continue the stock repurchase program, fluctuations in quarterly results,
 including uncertainties regarding the timing of orders from significant
 customers and regional economies 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 2000 Annual Report and Form 10-K and the
 most recent quarterly report on Form 10-Q.
     ANSYS, Inc. is committed to providing the most open and flexible analysis
 solutions to meet customer requirements for engineering software in today's
 competitive marketplace.  ANSYS, Inc. partners with leading design software
 suppliers to develop state-of-the-art CAD-integrated products. A global
 network of ANSYS Support Distributors provides sales, support and training for
 customers. Information about ANSYS, Inc. and its products can be found on the
 Worldwide Web at http://www.ansys.com.
 
     Note: ANSYS and DesignSpace are registered in the U.S. Patent and
 Trademark Office.  All other trademarks and registered 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
                                                     March 31,     March 31,
                                                       2001           2000
     Revenue:
      Software licenses                               $ 9,482       $ 10,507
      Maintenance and service                           8,740          6,873
        Total revenue                                  18,222         17,380
 
     Cost of sales:
      Software licenses                                 1,110          1,094
      Maintenance and service                           1,553            909
        Total cost of sales                             2,663          2,003
 
     Gross profit                                      15,559         15,377
 
     Operating expenses:
       Selling and marketing                            4,934          3,835
       Research and development                         3,915          3,411
       Amortization                                     1,325            208
       General and administrative                       2,571          2,689
         Total operating expenses                      12,745         10,143
 
     Operating income                                   2,814          5,234
 
     Other income                                         644            997
 
     Income before income tax provision                 3,458          6,231
 
     Income tax provision                               1,087          1,744
 
     Net income                                        $2,371         $4,487
 
     Net income per basic common share:
       Basic earnings per share                         $0.16          $0.28
       Weighted average shares - basic                 14,914         16,253
 
 
     Net income per diluted common share:
       Diluted earnings per share                       $0.15          $0.27
       Weighted average shares - diluted               15,493         16,845
 
     Net income before
      acquisition-related amortization                 $3,249         $4,487
        Adjusted diluted earnings per share             $0.21          $0.27
 
 
                          ANSYS, INC. AND SUBSIDIARIES
                       Consolidated Statements of Income
                          Earnings Release Supplement
                     (in thousands, except per share data)
                                  (Unaudited)
 
                                             Three Months Ended
                                    March 31,        March 31,    March 31,
                                       2001            2001          2000
                                     Reported        Adjusted*     Reported
     Revenue:
      Software licenses              $ 9,482        $ 12,271*     $ 10,507
      Maintenance and service          8,740           9,001*        6,873
        Total revenue                 18,222          21,272        17,380
 
     Cost of sales:
       Software licenses               1,110           1,110         1,094
       Maintenance and service         1,553           1,553           909
         Total cost of sales           2,663           2,663         2,003
 
     Gross profit                     15,559          18,609        15,377
 
     Operating expenses:
       Selling and marketing           4,934           4,934         3,835
       Research and development        3,915           3,915         3,411
       Amortization                    1,325           1,325           208
       General and administrative      2,571           2,571         2,689
         Total operating expenses     12,745          12,745        10,143
 
     Operating income                  2,814           5,864         5,234
 
     Other income                        644             644           997
 
     Income before income
      tax provision                    3,458           6,508         6,231
 
     Income tax provision              1,087           2,049         1,744
 
     Net income                       $2,371          $4,459        $4,487
 
     Net income per basic
      common share:
       Basic earnings per share        $0.16           $0.30         $0.28
       Weighted average shares
        - basic                       14,914          14,914        16,253
 
     Net income per diluted
      common share:
       Diluted earnings per share      $0.15           $0.29         $0.27
       Weighted average shares
        - diluted                     15,493          15,493        16,845
 
     Net income before
      acquisition-related
      amortization                    $3,249          $5,337        $4,487
       Adjusted diluted earnings
        per share                      $0.21           $0.34         $0.27
 
     * Modified to reflect estimates of revenue as if revenue was recognized
      for Q1 2001 consistently with the revenue recognition method of the
      prior year quarter.
 
 
                            ANSYS, INC. AND SUBSIDIARIES
                       Condensed Consolidated Balance Sheets
                                   (in thousands)
                                    (unaudited)
 
                                                     March 31,    December 31,
                                                       2001           2000
     ASSETS:
 
     Cash & short-term investments                    $41,974        $47,540
     Accounts receivable, net                          10,896         14,403
     Other assets                                      31,131         32,282
         Total assets                                 $84,001       $ 94,225
 
     LIABILITIES & STOCKHOLDERS' EQUITY:
 
     Current liabilities                              $22,933        $24,861
     Stockholders' equity                              61,068         69,364
 
         Total liabilities & stockholders' equity     $84,001        $94,225
 
 

SOURCE ANSYS, Inc.
    SOUTHPOINTE, Pa., April 18 /PRNewswire/ -- ANSYS, Inc. (Nasdaq:   ANSS), a
 global leader in design analysis and optimization software, today announced
 first quarter 2001 results. ANSYS' first quarter results, excluding the impact
 of a modification in annual lease revenue recognition, discussed below, and
 acquisition-related amortization, reflect:
 
    -- A 22% increase in total adjusted revenue to $21.3 million from
        $17.4 million in the first quarter of 2000, including a 17% increase in
        software license revenue and a 31% increase in maintenance and service
        revenue.
    -- An overall gross profit margin of 87% and an operating margin,
        excluding total amortization, of 34%.
     -- A 26% increase in first quarter adjusted earnings per share to $0.34
       from $0.27 in the first quarter of 2000.
     -- Cash flows from operations of $6.3 million in the first quarter of
        2001.
 
     Impact of Modification of Annual Lease Revenue Recognition:
     ANSYS' first quarter results reflect the effects of a modification of its
 previous revenue recognition policy for annual software leases to be compliant
 with a new Technical Practice Aid ("TPA") issued by the AICPA.  ANSYS'
 previous policy was to recognize a portion of the license fee from annual
 leases as software license revenue upon inception or renewal of the lease,
 while the remaining portion was recognized ratably over the remaining lease
 period.  The TPA now requires all revenue from annual software lease licenses
 to be recognized ratably over the annual lease term.  This results in more of
 the revenue being recognized from annual software leases over the life of the
 leases and less of the revenue being recognized upon the inception or renewal
 of these leases than under ANSYS' previous policy.
     This modification reduced the Company's first quarter reported revenue by
 approximately $3 million; however, it will not have any effect on ANSYS'
 current cash flow or its revenue and operating results over the term of the
 relevant leases.  Additionally, it should improve the visibility with respect
 to the Company's future revenue, as approximately $3 million of software
 license revenue from first quarter annual leases will be recognized over the
 remaining terms of the leases.
     As a result of the change in its revenue recognition policy, ANSYS'
 reported financial results are not for the current quarter, and will not be
 for subsequent quarters, comparable with prior periods.  Additionally, sales
 and renewals of annual lease licenses have historically been most significant
 in the first quarter of the fiscal year.  As a result, management anticipates
 that the magnitude of the impact of this modification will be most apparent in
 the first quarter as compared to the remaining quarters in 2001.  To ensure
 that investors and other interested parties can compare the current quarter
 results to historical results, ANSYS is providing its reported financial
 results, as well as its results adjusted for the impact of the revenue policy
 modification.
 
     First Quarter 2001 Comparative Results:
     ANSYS reported $18.2 million in revenue and $0.21 adjusted diluted
 earnings per share for the first quarter of 2001.  On a comparative basis, had
 the accounting revenue recognition modification not been made, ANSYS would
 have reported first quarter 2001 revenue of $21.3 million, an increase of
 22.4%, compared to $17.4 million reported in the first quarter of 2000.  The
 Company also would have reported adjusted diluted earnings per share of $0.34,
 excluding acquisition-related amortization and the effects of the previously
 mentioned accounting modification, based on 15.5 million weighted average
 common shares outstanding.  In the first quarter of 2000, ANSYS reported $0.27
 diluted earnings per share, based on 16.8 million weighted average common
 shares outstanding.
     Geographically, the first quarter of 2001 reflected notably strong sales
 growth in the Company's General International Area, predominantly led by
 Japan, while sales in North America and Europe remained relatively stable.
 Excluding the impact of the accounting modification, software license revenue
 grew 17% and maintenance and service revenue grew 31% in the quarter.
 Operating income, excluding the effects of the accounting modification and
 total amortization, rose 32% resulting in an overall operating profit margin
 of 34%.  The strong operating performance resulted in $6.3 million in cash
 generated from the Company's operating activities in the first quarter of
 2001.
     Jim Cashman, ANSYS President and CEO, stated, "The challenging economic
 environment has put even greater pressure on companies to bring products more
 efficiently to market while maintaining the highest of quality and safety
 standards.  This market dynamic validates our market strategy and product
 positioning, and creates increasing demand for ANSYS' products and services.
 We remain optimistic about the future and continue to see new commitments to
 ANSYS solutions from key customers across all major industries and
 geographies, including Mitsubishi Electric, IBM, Dresser Industries, Denso,
 Raytheon, Nippon Telegraph and Telephone, Alstom and Robert Bosch."
     Cashman continued, "We are proud of the operating accomplishments made
 during the first quarter and our continued rapid pace of innovation.  We
 continue to believe that our geographical and industry breadth provides some
 insulation from economic slowdowns.  However, we are closely watching market
 conditions and customer buying patterns.  In March, we announced DesignSpace
 6.0, the latest up-front simulation tool available in ANSYS' complete range of
 computer-aided engineering software solutions.  During the quarter we also
 presented our first College Design Engineering Award to the University of
 Evansville, Indiana.  ANSYS, which participates in numerous university
 partnerships, believes that education of users in the university environment
 will expand adoption of our technology."
     Cashman further commented,  "ANSYS repurchased a total of 978,487 shares
 at a total cost of $11.2 million in the first quarter of 2001, and continues
 to maintain an active open market repurchase program.  We also experienced
 strong operating cash flow and ended the quarter with approximately
 $42 million in cash and short-term investments on our balance sheet."
     ANSYS will hold a conference call at 5:30 P.M. Eastern Time on April 18,
 2001 to discuss first quarter results and the Company's business prospects.
 The dial in number is 800-857-7001 and the passcode is "ANSYS."  A replay will
 be available until April 20th by dialing 888-568-0627.  The conference call
 will be webcast live and can be accessed, along with other financial
 information, on the Company's website, located at www.ansys.com.
 
     Some matters discussed in this news release constitute forward-looking
 statements under the "safe harbor" provisions of the Private Securities
 Litigation Reform Act of 1995 that involve risks and uncertainties.  These
 forward looking statements include guidance relative to the impact of an
 accounting modification and the resulting improvement in visibility of the
 Company's future revenue, comments regarding the challenging economic
 environment putting pressure on companies to bring products to market more
 efficiently while maintaining the highest of quality and safety standards,
 economic conditions increasing the demand for the Company's products and
 services, validation of our market strategy and product positioning, believing
 that education of users in the university environment will expand adoption of
 our technology and optimism about future periods.
     All forward looking statements in this press release are subject to risks
 and uncertainties, such as a general economic downturn in one or more of the
 Company's primary geographic markets, failure to correctly anticipate the
 effects of a general economic downturn on the demand for the Company's
 products and services, risks of problems arising from customer contract
 cancellations, uncertainties regarding customer acceptance of new products,
 possible delays in developing, completing, or shipping new or enhanced
 products, changes in the price of our common stock affecting our willingness
 to continue the stock repurchase program, fluctuations in quarterly results,
 including uncertainties regarding the timing of orders from significant
 customers and regional economies 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 2000 Annual Report and Form 10-K and the
 most recent quarterly report on Form 10-Q.
     ANSYS, Inc. is committed to providing the most open and flexible analysis
 solutions to meet customer requirements for engineering software in today's
 competitive marketplace.  ANSYS, Inc. partners with leading design software
 suppliers to develop state-of-the-art CAD-integrated products. A global
 network of ANSYS Support Distributors provides sales, support and training for
 customers. Information about ANSYS, Inc. and its products can be found on the
 Worldwide Web at http://www.ansys.com.
 
     Note: ANSYS and DesignSpace are registered in the U.S. Patent and
 Trademark Office.  All other trademarks and registered 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
                                                     March 31,     March 31,
                                                       2001           2000
     Revenue:
      Software licenses                               $ 9,482       $ 10,507
      Maintenance and service                           8,740          6,873
        Total revenue                                  18,222         17,380
 
     Cost of sales:
      Software licenses                                 1,110          1,094
      Maintenance and service                           1,553            909
        Total cost of sales                             2,663          2,003
 
     Gross profit                                      15,559         15,377
 
     Operating expenses:
       Selling and marketing                            4,934          3,835
       Research and development                         3,915          3,411
       Amortization                                     1,325            208
       General and administrative                       2,571          2,689
         Total operating expenses                      12,745         10,143
 
     Operating income                                   2,814          5,234
 
     Other income                                         644            997
 
     Income before income tax provision                 3,458          6,231
 
     Income tax provision                               1,087          1,744
 
     Net income                                        $2,371         $4,487
 
     Net income per basic common share:
       Basic earnings per share                         $0.16          $0.28
       Weighted average shares - basic                 14,914         16,253
 
 
     Net income per diluted common share:
       Diluted earnings per share                       $0.15          $0.27
       Weighted average shares - diluted               15,493         16,845
 
     Net income before
      acquisition-related amortization                 $3,249         $4,487
        Adjusted diluted earnings per share             $0.21          $0.27
 
 
                          ANSYS, INC. AND SUBSIDIARIES
                       Consolidated Statements of Income
                          Earnings Release Supplement
                     (in thousands, except per share data)
                                  (Unaudited)
 
                                             Three Months Ended
                                    March 31,        March 31,    March 31,
                                       2001            2001          2000
                                     Reported        Adjusted*     Reported
     Revenue:
      Software licenses              $ 9,482        $ 12,271*     $ 10,507
      Maintenance and service          8,740           9,001*        6,873
        Total revenue                 18,222          21,272        17,380
 
     Cost of sales:
       Software licenses               1,110           1,110         1,094
       Maintenance and service         1,553           1,553           909
         Total cost of sales           2,663           2,663         2,003
 
     Gross profit                     15,559          18,609        15,377
 
     Operating expenses:
       Selling and marketing           4,934           4,934         3,835
       Research and development        3,915           3,915         3,411
       Amortization                    1,325           1,325           208
       General and administrative      2,571           2,571         2,689
         Total operating expenses     12,745          12,745        10,143
 
     Operating income                  2,814           5,864         5,234
 
     Other income                        644             644           997
 
     Income before income
      tax provision                    3,458           6,508         6,231
 
     Income tax provision              1,087           2,049         1,744
 
     Net income                       $2,371          $4,459        $4,487
 
     Net income per basic
      common share:
       Basic earnings per share        $0.16           $0.30         $0.28
       Weighted average shares
        - basic                       14,914          14,914        16,253
 
     Net income per diluted
      common share:
       Diluted earnings per share      $0.15           $0.29         $0.27
       Weighted average shares
        - diluted                     15,493          15,493        16,845
 
     Net income before
      acquisition-related
      amortization                    $3,249          $5,337        $4,487
       Adjusted diluted earnings
        per share                      $0.21           $0.34         $0.27
 
     * Modified to reflect estimates of revenue as if revenue was recognized
      for Q1 2001 consistently with the revenue recognition method of the
      prior year quarter.
 
 
                            ANSYS, INC. AND SUBSIDIARIES
                       Condensed Consolidated Balance Sheets
                                   (in thousands)
                                    (unaudited)
 
                                                     March 31,    December 31,
                                                       2001           2000
     ASSETS:
 
     Cash & short-term investments                    $41,974        $47,540
     Accounts receivable, net                          10,896         14,403
     Other assets                                      31,131         32,282
         Total assets                                 $84,001       $ 94,225
 
     LIABILITIES & STOCKHOLDERS' EQUITY:
 
     Current liabilities                              $22,933        $24,861
     Stockholders' equity                              61,068         69,364
 
         Total liabilities & stockholders' equity     $84,001        $94,225
 
 SOURCE  ANSYS, Inc.