Highlights:
- GAAP revenue of $217.8 million and non-GAAP revenue of $218.4
million
- GAAP diluted earnings per share of $0.61 and non-GAAP diluted
earnings per share of $0.77
- Operating cash flows of $114.1 million
- GAAP operating profit margin of 36.8% and non-GAAP operating
profit margin of 47.3%
- Record high deferred revenue & backlog of $477.5 million at
March 31, 2015
- Repurchase of 1.5 million shares in the first quarter at an
average price of $83.38 per share
- Annual Meeting of Stockholders on May 14, 2015 and 2015
Investor Day on June 2, 2015
ANSYS, Inc. (Nasdaq:ANSS), today announced growth in both revenue
and diluted earnings per share for the first quarter of 2015. The
Company reported revenue growth of 8% in constant currency and GAAP
and non-GAAP diluted earnings per share of $0.61 and $0.77,
respectively, for the quarter. Recurring revenue, which is
comprised of lease license and annual maintenance revenue, totaled
76% of revenue for the first quarter.
"Our Q1 results reflect most major metrics of the
business performing in line with our Q1 guidance range, highlighted
by solid margins and cash flows from operations, as well as a
record deferred revenue and backlog balance of over $477 million.
We saw solid execution in North America and Asia-Pacific with 11%
and 9% revenue growth in constant currency, respectively. As
expected, we continued to be negatively impacted in Europe by the
combination of the uncertain macroeconomic environment, stiff
currency headwinds and slower than planned sales capacity
expansion, with revenue growth year-over-year of 5% in constant
currency," commented Jim Cashman, ANSYS President and Chief
Executive Officer. "During the quarter, we continued to make
important progress on sales hiring in most geographies and on our
product portfolio. With the release of ANSYS® 16.0 in Q1, we have
significantly extended the ease-of-use and scalability of our
world-class engineering simulation platform. These remain key areas
of focus as we continue to drive our long-term growth opportunity
with ongoing investments in customer engagement and research and
development initiatives."
ANSYS' first quarter financial results are presented below. The
2015 and 2014 non-GAAP results exclude the income statement effects
of acquisition adjustments to deferred revenue, the impact of
stock-based compensation and acquisition-related amortization of
intangible assets, as well as acquisition-related transaction
costs.
GAAP and non-GAAP results reflect:
|
GAAP |
Non-GAAP |
(in millions, except EPS and %'s) |
Q1 2015 |
Q1 2014 |
% Change |
Q1 2015 |
Q1 2014 |
% Change |
|
|
|
|
|
|
|
Revenue |
$ 217.8 |
$ 215.3 |
1% |
$ 218.4 |
$ 216.5 |
1% |
Net income |
$ 56.1 |
$ 56.5 |
(1%) |
$ 70.8 |
$ 71.9 |
(2%) |
Earnings per share |
$ 0.61 |
$ 0.60 |
2% |
$ 0.77 |
$ 0.76 |
1% |
Operating profit margin |
36.8% |
36.7% |
|
47.3% |
47.2% |
|
Operating cash flow |
$ 114.1 |
$ 131.6 |
(13%)* |
|
|
|
* The Q1 2014 operating cash flows included a $26.8 million tax
refund.
The non-GAAP financial results highlighted above, and the
non-GAAP financial outlook for 2015 discussed below, represent
non-GAAP financial measures. Reconciliations of these measures to
the appropriate GAAP measures for the three months ended March 31,
2015 and 2014, and for the 2015 financial outlook, are included in
the condensed financial information included in this release.
Management's Remaining 2015 Financial Outlook
The Company has provided its second quarter and fiscal year 2015
revenue and earnings per share guidance below. The earnings per
share guidance is provided on both a GAAP 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
transaction costs.
Second Quarter and Fiscal Year 2015 Guidance
The Company currently expects the following for the quarter
ending June 30, 2015:
- GAAP revenue in the range of $229.6 - $237.6 million
- Non-GAAP revenue in the range of $230.0 - $238.0
million
- GAAP diluted earnings per share of $0.59 - $0.66
- Non-GAAP diluted earnings per share of $0.78 - $0.82
The Company currently expects the following for the fiscal year
ending December 31, 2015:
- GAAP revenue in the range of $941.6 - $966.6 million
- Non-GAAP revenue in the range of $943.0 - $968.0 million
- GAAP diluted earnings per share of $2.74 - $2.85
- Non-GAAP diluted earnings per share of $3.40 - $3.49
The Company's Q2 and FY 2015 guidance reflected above includes
expected charges of $1.2 - $2.2 million, or $0.01 - $0.02 diluted
earnings per share, related to organizational changes, primarily in
Europe.
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
May 6, 2015 to discuss first quarter results. The Company will
provide its prepared remarks on the Company's investor relations
homepage and as an exhibit in its Form 8-K in advance of the call
to provide shareholders and analysts with additional time and
detail for analyzing its results in preparation for the conference
call. The prepared remarks will not be read on the call – only
brief remarks will be made prior to the Q&A session.
To participate in the live conference call, dial 866-652-5200
(US) or 412-317-6060 (Canada & Int'l). 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 10063486. The archived webcast can be
accessed, along with other financial information, on ANSYS' web
site at: http://investors.ansys.com
ANSYS, INC. AND
SUBSIDIARIES |
Condensed Consolidated Balance
Sheets |
(in thousands) |
(Unaudited) |
|
|
|
|
March 31, 2015 |
December 31, 2014 |
|
|
|
ASSETS: |
|
|
|
|
|
Cash & short-term investments |
$ 761,183 |
$ 788,778 |
Accounts receivable, net |
80,949 |
101,229 |
Goodwill |
1,315,045 |
1,312,182 |
Other intangibles, net |
244,777 |
259,312 |
Other assets |
279,140 |
312,602 |
|
|
|
Total assets |
$ 2,681,094 |
$ 2,774,103 |
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS' EQUITY: |
|
|
|
|
|
Deferred revenue |
$ 343,814 |
$ 332,664 |
Other liabilities |
186,015 |
223,938 |
Stockholders' equity |
2,151,265 |
2,217,501 |
|
|
|
Total liabilities &
stockholders' equity |
$ 2,681,094 |
$ 2,774,103 |
|
ANSYS, INC. AND
SUBSIDIARIES |
Consolidated Statements of
Income |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
Three Months
Ended |
|
March 31, 2015 |
March 31, 2014 |
Revenue: |
|
|
Software licenses |
$ 124,969 |
$ 126,429 |
Maintenance and
service |
92,812 |
88,842 |
|
|
|
Total revenue |
217,781 |
215,271 |
|
|
|
Cost of sales: |
|
|
Software licenses |
7,209 |
7,144 |
Amortization |
9,357 |
9,315 |
Maintenance and
service |
19,322 |
21,286 |
Total cost of
sales |
35,888 |
37,745 |
|
|
|
Gross profit |
181,893 |
177,526 |
|
|
|
|
|
|
Operating expenses: |
|
|
Selling, general and
administrative |
56,749 |
53,550 |
Research and
development |
40,009 |
40,120 |
Amortization |
5,077 |
4,794 |
Total operating
expenses |
101,835 |
98,464 |
|
|
|
Operating income |
80,058 |
79,062 |
|
|
|
Interest expense |
(154) |
(248) |
Interest income |
656 |
841 |
Other income (expense), net |
767 |
(198) |
|
|
|
Income before income tax provision |
81,327 |
79,457 |
|
|
|
Income tax provision |
25,195 |
22,915 |
|
|
|
Net income |
$ 56,132 |
$ 56,542 |
|
|
|
Earnings per share – basic: |
|
|
Basic earnings per
share |
$ 0.62 |
$ 0.61 |
Weighted average shares -
basic |
90,059 |
92,483 |
|
|
|
Earnings per share – diluted: |
|
|
Diluted earnings per
share |
$ 0.61 |
$ 0.60 |
Weighted average shares -
diluted |
92,140 |
94,949 |
|
ANSYS, INC. AND
SUBSIDIARIES |
Reconciliation of
Non-GAAP Measures |
(Unaudited) |
(in thousands, except
percentages and per share data) |
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
|
|
|
March 31,
2015 |
March 31,
2014 |
|
|
As Reported |
Adjustments |
Non- GAAP
Results |
As Reported |
Adjustments |
Non- GAAP
Results |
|
|
|
|
|
|
|
Total revenue |
$217,781 |
$ 593 (1) |
$218,374 |
$215,271 |
$ 1,224 (4) |
$216,495 |
|
80,058 |
23,133 (2) |
103,191 |
79,062 |
23,101 (5) |
102,163 |
Operating income |
|
36.8% |
|
47.3% |
36.7% |
|
47.2% |
Operating profit margin |
|
$56,132 |
$14,682 (3) |
$70,814 |
$56,542 |
$15,378 (6) |
$71,920 |
Net income |
|
|
|
|
|
|
|
Earnings per share – diluted: |
Diluted earnings per share |
$ 0.61 |
|
$ 0.77 |
$ 0.60 |
|
$ 0.76 |
Weighted average
shares – diluted |
92,140 |
|
92,140 |
94,949 |
|
94,949 |
|
|
|
|
|
|
|
|
(1) Amount represents the revenue not reported during the
period as a result of the acquisition accounting adjustment
associated with accounting for deferred revenue in business
combinations. |
|
|
|
|
|
|
|
(2) Amount represents $14.4 million of amortization expense
associated with intangible assets acquired in business
combinations, $7.8 million of stock-based compensation expense, the
$0.6 million adjustment to revenue as reflected in (1) above and
$0.3 million of transaction expenses related to business
combinations. |
|
|
|
|
|
|
|
(3) Amount represents the impact of the adjustments to
operating income referred to in (2) above, adjusted for the related
income tax impact of $8.5 million. |
|
|
|
|
|
|
|
(4) Amount represents the revenue not reported during the
period as a result of the acquisition accounting adjustment
associated with accounting for deferred revenue in business
combinations. |
|
|
|
|
|
|
|
(5) Amount represents $14.1 million of amortization expense
associated with intangible assets acquired in business
combinations, $7.5 million of stock-based compensation expense, the
$1.2 million adjustment to revenue as reflected in (4) above and
$0.3 million of transaction expenses related to business
combinations. |
|
|
|
|
|
|
|
(6) Amount represents the impact of the adjustments to
operating income referred to in (5) above, adjusted for the related
income tax impact of $7.7 million. |
|
ANSYS, INC. AND
SUBSIDIARIES |
Reconciliation of
Forward-Looking Guidance |
Quarter Ending June 30,
2015 |
|
|
|
Diluted Earnings Per Share Range |
U.S. GAAP guidance |
$0.59 - $0.66 |
Adjustment to exclude acquisition accounting
adjustment to deferred revenue |
$0.00 - $0.01 |
Adjustment to exclude acquisition–related
amortization |
$0.10 - $0.11 |
Adjustment to exclude stock–based
compensation |
$0.06 - $0.07 |
Non-GAAP guidance |
$0.78 - $0.82 |
|
|
ANSYS, INC. AND
SUBSIDIARIES |
Reconciliation of
Forward-Looking Guidance |
Year Ending December 31,
2015 |
|
|
|
Diluted Earnings Per Share Range |
U.S. GAAP guidance |
$2.74 - $2.85 |
Adjustment to exclude acquisition accounting
adjustment to deferred revenue |
$0.01 |
Adjustment to exclude acquisition–related
amortization |
$0.38 - $0.39 |
Adjustment to exclude stock–based
compensation |
$0.25 - $0.26 |
Non-GAAP guidance |
$3.40 - $3.49 |
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:
Acquisition accounting for deferred revenue and its
related tax impact. Historically, the Company has
consummated acquisitions in order to support the Company's
strategic and other business objectives. In accordance with
the fair value provisions applicable to the accounting for business
combinations, acquired deferred revenue is often recorded on the
opening balance sheet at an amount that is lower than the
historical carrying value. Although this acquisition
accounting requirement has no impact on the Company's business or
cash flow, it adversely impacts the Company's reported GAAP revenue
in the reporting periods following an acquisition. In order to
provide investors with financial information that facilitates
comparison of both historical and future results, the Company
provides non-GAAP financial measures which exclude the impact of
the acquisition 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) 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
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 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 these
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.
Transaction costs related to business
combinations. The Company incurs expenses for
professional services rendered in connection with business
combinations, which are included in its GAAP presentation of
selling, general and administrative expense. These expenses
are generally not tax-deductible. Management excludes these
acquisition-related transaction costs 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, as it generally would not have otherwise incurred these
expenses in the periods presented as a part of its continuing
operations. The Company believes that these 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.
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
Income |
Non-GAAP Operating Income |
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 brings clarity and insight to customers' most complex
design challenges through fast, accurate and reliable engineering
simulation. Our technology enables organizations ― no matter their
industry ― to predict with confidence that their products will
thrive in the real world. Customers trust our software to help
ensure product integrity and drive business success through
innovation. Founded in 1970, ANSYS employs over 2,750
professionals, many of them experts in engineering fields such as
finite element analysis, computational fluid dynamics, electronics
and electromagnetics, and design optimization. Headquartered south
of Pittsburgh, Pennsylvania, U.S.A., ANSYS has more than 75
strategic sales locations throughout the world with a network of
channel partners in 40+ countries.
Forward Looking Information
Certain statements contained in this 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 second quarter of 2015 and fiscal year 2015
(both GAAP and non-GAAP to exclude acquisition accounting
adjustments to deferred revenue, acquisition-related amortization
and stock-based compensation expense and acquisition-related
transaction costs); statements about management's views concerning
the Company's prospects and outlook for 2015, including statements
and projections relating to the impact of stock-based compensation,
statements regarding management's use of non-GAAP financial
measures, statements regarding the Company's second quarter and
beyond visibility, statements regarding ANSYS 16.0, including
significantly extending the ease-of-use and scalability of our
world-class engineering simulation platform and these remaining key
areas of focus as we continue to drive our long-term growth
opportunity with ongoing investments in customer engagement and
research and development initiatives 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
that adverse conditions in the global and domestic markets
will significantly affect ANSYS' customers' ability to purchase
products from the Company at the same level as prior periods or to
pay for the Company's products and services, the risk that declines
in the ANSYS' customers' business may lengthen customer sales
cycles, the risk of declines in the economy of one or more of
ANSYS' primary geographic regions, the risk that ANSYS' revenues
and operating results will be adversely affected by changes in
currency exchange rates or economic declines in any of the
countries in which ANSYS conducts transactions, 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, uncertainties regarding customer acceptance of new
products including ANSYS® 16.0, the risk that ANSYS' operating
results will be adversely affected by possible delays in
developing, completing or shipping new or enhanced products, the
risk that enhancements to the Company's products or products
acquired in acquisitions may not produce anticipated sales, the
risk that the Company may not be able to recruit and retain key
executives and technical personnel, the risk that third parties may
misappropriate the Company's proprietary technology or develop
similar technology independently, the risk of unauthorized access
to and distribution of the Company's source code, the risk of
difficulties in the relationship with ANSYS' independent regional
channel partners, the risk that ANSYS may not achieve the
anticipated benefits of its acquisitions or that the integration of
the acquired technologies or products with the Company's existing
product lines may not be successful, 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 2014
Annual Report and Form 10-K. 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 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.
Visit www.ansys.com for more information. The ANSYS IR App – now
available for download on iTunes and Google Play.
ANSYS also has a strong presence on the major social
channels. To join the simulation conversation, please visit:
www.ansys.com/Social@ANSYS
ANSS-F
CONTACT: Investors:
Annette N. Arribas, CTP
724.820.3700
annette.arribas@ansys.com
Media:
Tom Smithyman
724.820.4340
tom.smithyman@ansys.com
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