Dassault Systemes (DS) (NASDAQ: DASTY) (Paris:DSY) reported financial results for the fourth quarter and year ended December 31, 2007. Summary Financial Highlights
-- Q4 GAAP total revenue up 10% and non-GAAP up 12%, both in constant currencies
-- 2007 GAAP total revenue up 15% and non-GAAP up 14%, both in constant currencies
-- Q4 EPS EUR 0.64 on GAAP basis and EUR 0.78 on non-GAAP basis
-- DS outlines 2008 financial objectives: about 12% non-GAAP software revenue growth in constant currencies; 10-12% non-GAAP EPS growth; 27-27.5% non-GAAP operating margin
Fourth Quarter and Full Year 2007 Financial Summary
GAAP Non-GAAP
In millions of Euro, --------------------------------------------
except per share data Growth Growth
in in
Growth cc* Growth cc*
----------------------------------------------------------------------
Q4 Total Revenue 363.1 4% 10% 371.1 5% 12%
----------------------------------------------------------------------
Q4 Software Revenue 308.3 8% 14% 316.3 9% 16%
----------------------------------------------------------------------
Q4 EPS 0.64 -3% 0.78 8%
----------------------------------------------------------------------
Q4 Operating Margin 28.9% 34.9%
----------------------------------------------------------------------
----------------------------------------------------------------------
2007 Total Revenue 1,258.8 9% 15% 1,275.9 8% 14%
----------------------------------------------------------------------
2007 Software Revenue 1,063.3 10% 16% 1,080.4 10% 16%
----------------------------------------------------------------------
2007 EPS 1.49 -1% 1.98 8%
----------------------------------------------------------------------
2007 Operating Margin 20.1% 26.2%
----------------------------------------------------------------------
* In constant currencies.
Bernard Charles, Dassault Systemes President and Chief Executive Officer, commented: "2007 was a year of exceptional progress for Dassault Systemes. We made significant headway in transforming our go-to-market sales model, most visibly assuming control of our PLM indirect channel, while expanding the IBM PLM offering as well as better leveraging our direct sales force capacity and increasing our sales capacity in Mainstream 3D. As a result, we enter 2008 with expanded resources in all of our sales channels.
"With the introduction of PLM 2.0 our customers will benefit from PLM online for all. Following several years of development, our Version 6 platform provides an unmatched level of integration and openness, covering a wide variety of PLM business processes driven by user experiences at all stages.
"Our 2007 financial performance benefited from the strength of our brands and the diversification of our revenues by geographic regions. Our non-GAAP software revenue growth reached 16% in constant currencies in 2007.
"Looking to 2008, the investments we have made in strengthening our product portfolio and sales channels provide solid underpinnings to our financial objectives despite the potentially mixed macro-economic backdrop." Fourth Quarter Financial Highlights
Thibault de Tersant, Senior Executive Vice President and CFO, commented: "Fourth quarter software revenue growth, expense levels and EPS results were in line with our expectations. PLM consulting services tracked to plan. Nonetheless, total services and other revenue came in about EUR 4 million lower than anticipated with the majority of the weakness located in our former IBM business partner operations. We saw year-on-year improvement in our non-GAAP operating margin, increasing to 35%, but the extent of the improvement was limited by the services results."
-- In constant currencies, fourth quarter revenue in Asia increased 21% (non-GAAP up 22%), followed by the Americas with growth of 10% (non-GAAP up 10%) and Europe with growth of 6% (non-GAAP up 8%).
-- GAAP PLM software revenue increased 14% and non-GAAP PLM software revenue increased 17%, both in constant currencies.
-- GAAP Mainstream 3D software revenue increased 16% in constant currencies. Non-GAAP Mainstream 3D software revenue increased 12% in constant currencies in the fourth quarter. SolidWorks new seat growth was 12%.
-- GAAP recurring software revenue represented 55% of software revenue for the fourth quarter. Non-GAAP recurring software revenue, representing 54% of non-GAAP software revenue in the quarter, increased 24% in constant currencies.
-- Services and other revenue, representing 15% of total revenue, decreased approximately 7% in constant currencies in the fourth quarter principally reflecting a strong base of comparison with the year-ago quarter.
-- GAAP operating margin was 28.9% in the quarter. Non-GAAP operating margin increased to 34.9%, compared to 34.3% in the year-ago period.
-- GAAP earnings per diluted share decreased 3% for the fourth quarter. Non-GAAP earnings per diluted share increased 8% in the fourth quarter primarily reflecting an increase in non-GAAP operating income of 7% and a lower effective tax rate offset in part by a decrease in financial revenue.
-- New wins in the fourth quarter included: Michael Kors in apparel with ENOVIA, Pelamis Wave Power in energy with SIMULIA, and Avtovaz in automotive in Russia with CATIA. Full Year 2007 Financial Highlights
-- In constant currencies, Asia posted revenue growth of 24% (non-GAAP up 24%) on strong growth in Japan and throughout most of Asia, the Americas increased 20% (non-GAAP up 19%) and Europe was higher by 6% (non-GAAP up 7%).
-- GAAP PLM software revenue increased 17% in constant currencies. Non-GAAP PLM software revenue increased 16% in constant currencies.
-- CATIA non-GAAP software revenue growth of 14% in constant
currencies benefited from increased leasing activity, growth in
maintenance, increasing interest in CATIA PLM Express in the
mid-market and the inclusion of ICEM.
-- ENOVIA non-GAAP software revenue growth of 32% reflected key
new wins in target industries including high tech and apparel,
growth with existing customers and the inclusion of ENOVIA
MatrixOne for a full year.
-- SIMULIA posted a record year on expanding relationships with
customers.
-- The GAAP PLM indirect channel software revenue grew by
double-digits in constant currencies during 2007. In total the
PLM indirect channel accounted for approximately one-quarter of
DS' total revenue in 2007. At the end of 2007 DS was directly
responsible for 25 regions. In addition to revenue growth, PLM
indirect channel capacity grew by over 15% during 2007.
-- GAAP Mainstream 3D software revenue increased 15% in constant currencies. Non-GAAP Mainstream 3D software revenue increased 14% in constant currencies on SolidWorks new seat growth of 13% and strong growth in maintenance revenue, including renewals.
-- GAAP recurring software revenue represented 60% of software revenue. Non-GAAP recurring software revenue, representing 60% of non-GAAP software revenue, increased 28% in constant currencies for the year reflecting growth in maintenance and periodic licenses.
-- Services and other revenue increased approximately 6% in constant currencies on growth of PLM consulting services, offset in part by lower revenue related to DS operations formerly known as IBM business partner activities.
-- GAAP operating margin was 20.1% for the year. The non-GAAP operating margin was 26.2% compared to 26.9% for 2006, with currency exchange rate variations accounting for approximately 60 basis points of the 70 basis points decrease.
-- GAAP earnings per diluted share decreased 1% for the full year primarily reflecting higher investments in marketing and sales and G&A, a higher effective tax rate and the impact of amortization of acquired intangibles in connection with acquisitions. Non-GAAP earnings per diluted share increased 8% for the full year 2007 due to an increase in non-GAAP operating income of 6%, higher financial revenue and a lower effective tax rate.
-- DS also announced initial plans to allocate up to EUR 35 million towards the repurchase of its common stock during 2008.
Cash flow and other financial highlights
Net operating cash flow was EUR 70.9 million and EUR 311.0 million, respectively, for the fourth quarter and year ended December 31, 2007. Cash and short-term investments totaled EUR 626.6 million and long-term debt totaled EUR 202.9 million at December 31, 2007.
Other Corporate Announcements
On January 24th, DS announced the launch of PLM 2.0 and its new, next-generation platform, Version 6 (V6). PLM 2.0, PLM online for all, is a 3D online environment for everyone to experience products virtually where all user interactions generate product experience. PLM 2.0 is to PLM what Web 2.0 is to the Web, harnessing collective intelligence from online communities. Any user can imagine, share and experience products in the universal language of 3D. PLM 2.0 brings knowledge, from idea to product experience, to life.
V6 is an open platform, embracing SOA standards. V6 delivers a single PLM platform for all PLM business processes, available to anybody anywhere, spanning engineering groups, businesses and end users. V6 also gives intelligent access to all product experience information no matter the data source location, with MatrixOne technology built into the foundation. Business Outlook
Thibault de Tersant, Senior Executive Vice President and CFO, commented: "Turning to 2008 we are reconfirming our 12% non-GAAP software revenue growth objective in constant currencies. We see good opportunities for growth coming from both our core and target industries. We are initiating our non-GAAP earnings per share growth objective of about 10% to 12% for 2008. In addition, we expect to see about an 80 to 130 basis points expansion in our non-GAAP operating margin in 2008 compared to 2007.
"In summary, thanks to the investments in our sales channels and product portfolio, we enter 2008 a substantially stronger company, well positioned to deliver growth in software, operating margin and earnings per share in spite of the macro-economic environment."
The Company's objectives are prepared and communicated only on a non-GAAP basis and are subject to the cautionary statement set forth below:
-- First quarter 2008 non-GAAP total revenue objective of about EUR 305 to EUR 310 million and non-GAAP EPS of about EUR 0.40 to EUR 0.42;
-- 2008 non-GAAP total revenue objective of about 10% growth in constant currencies; 2008 non-GAAP software revenue objective of about 12% growth in constant currencies;
-- 2008 non-GAAP EPS objective of about EUR 2.17 to EUR 2.22, representing about 10% to 12% growth;
-- 2008 non-GAAP operating margin objective of about 27% to 27.5%;
-- Objectives based upon exchange rate assumptions for the 2008 first quarter and full year of US$1.45 per EUR 1.00 and JPY 160 per EUR 1.00;
-- The constant currency revenue objective leads to a reported 2008 non-GAAP revenue range of about EUR 1.365 to EUR 1.380 billion;
The non-GAAP objectives set forth above do not take into account the following accounting elements: deferred revenue write-downs estimated at approximately EUR 1 million for 2008; stock-based compensation expense estimated at approximately EUR 18 million for 2008; amortization of acquired intangibles estimated at approximately EUR 48 million for 2008. The above objectives do not include any impact from one-time costs and one-time gains related to the anticipated DS global headquarters' relocation in 2008. These estimates also do not include any new stock option or share grants, or any new acquisitions completed after February 13, 2008.
Recent Business News Highlights
-- On January 24th, DS launched ENOVIA MatrixOne 10.8 - a single, collaborative PLM platform foundation.
-- On January 23rd, DS announced that more than 4,600 attendees participated in the SolidWorks World 2008 User Conference & Exposition, the largest annual worldwide 3D CAD event.
-- On January 21, DS introduced 3DLive for multi-CAD PLM environments.
-- On January 16th, DS announced the release of SIMULIA SLM for simulation lifecycle management.
-- On January 15th, DS launched ENOVIA SmarTeam Engineering Express.
-- On December 11th, 2007, DS and Rockwell Automation announced plans to integrate the digital factory and plant operations to create a virtual design and production environment.
Webcast and conference call information
Dassault Systemes will host a webcast and a conference call today, Wednesday, February 13, 2008. Management will host the webcast at 10:00 AM London time/11:00 AM Paris time and will then host the conference call at 3:00 PM CET/2:00 PM London time/9:00 AM New York time. The webcast and conference call will be available via the Internet by accessing www.3ds.com/corporate/investors/ Please go to the website at least fifteen minutes prior to the webcast or conference call to register, download and install any necessary audio software. The webcast and conference call will be archived for 30 days. Additional investor information can be accessed at http://www.3ds.com/corporate/investors/ or by calling Dassault Systemes' Investor Relations at 33.1.40.99.69.24.
Forward-looking information
Statements herein that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding our non-GAAP financial performance objectives, are forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended).
Such forward-looking statements are based on our management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results or performances may differ materially from those in such statements due to a range of factors. In preparing such forward-looking statements, we have in particular assumed an average U.S. dollar to euro exchange rate of US$1.45 per EUR 1.00 and an average Japanese yen to euro exchange rate of JPY160 to EUR 1.00 for the first quarter and full year 2008; however, currency values fluctuate, and our results of operations may be significantly affected by changes in exchange rates. We have also assumed that there will be no substantial decline in general levels of corporate spending on information technology, and that our increased responsibility for both indirect and direct PLM sales channels, and the resulting commercial and management challenges, will not prevent us from maintaining growth in revenues or cause us to incur substantial unanticipated costs and inefficiencies. Our actual results or performance may also be materially negatively affected by difficulties or adverse changes affecting our partners or our relationships with our partners, including our longstanding, strategic partner, IBM; new product developments and technological changes; errors or defects in our products; growth in market share by our competitors; and the realization of any risks related to the integration of any newly acquired company and internal reorganizations. Unfavorable changes in any of the above or other factors described in the Company's SEC reports, including the Form 20-F for the year ended December 31, 2006, which was filed with the SEC on May 29, 2007, could materially affect the Company's financial position or results of operations.
Non-GAAP financial information
Readers are cautioned that the supplemental non-GAAP information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-GAAP financial information may not be comparable to similarly titled non-GAAP measures used by other companies. Further specific limitations for individual non-GAAP measures, and the reasons for presenting non-GAAP financial information, are set forth in the company's annual report for the year ended December 31, 2006 on Form 20-F filed with the SEC on May 29, 2007. To compensate for these limitations, the supplemental non-GAAP financial information should be read not in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.
Information in constant currencies
When we believe it would be helpful for understanding trends in our business, we provide percentage increases or decreases in our revenue (in both US GAAP and on a non-GAAP basis) to eliminate the effect of changes in currency values, particularly the U.S. dollar and the Japanese yen, relative to the euro. When trend information is expressed herein "in constant currencies", the results of the "current" period have first been recalculated using the average exchange rates of the comparable period in the preceding year, and then compared with the results of the comparable period in the preceding year.
About Dassault Systemes:
As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systemes brings value to more than 100,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systemes develops and markets PLM application software and services that support industrial processes and provide a 3D vision of the entire lifecycle of products from conception to maintenance to recycling. The Dassault Systemes portfolio consists of CATIA for designing the virtual product - SolidWorks for 3D mechanical design - DELMIA for virtual production - SIMULIA for virtual testing - ENOVIA for global collaborative lifecycle management, and 3DVIA for online 3D lifelike experiences. Dassault Systemes is listed on the Nasdaq (DASTY) and Euronext Paris (#13065, DSY.PA) stock exchanges. For more information, visit www.3ds.com
CATIA, DELMIA, ENOVIA, SIMULIA, SolidWorks and 3DVIA are registered trademarks of Dassault Systemes or its subsidiaries in the US and/or other countries.
(Tables to follow)
DASSAULT SYSTEMES
CONSOLIDATED STATEMENTS OF INCOME (U.S. GAAP)
(in millions of Euro, except per share data, unaudited)
----------------------------------------------------------------------
Three months ended Twelve months ended
---------------------------------------------------
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
----------------------------------------------------------------------
New licenses
revenue 132.7 134.4 417.5 432.3
Periodic
licenses,
maintenance and
product
development
revenue 175.6 152.2 645.8 530.8
---------------------------------------------------
Software revenue 308.3 286.6 1,063.3 963.1
Services and
other revenue 54.8 62.8 195.5 194.7
---------------------------------------------------
Total Revenue EUR 363.1 EUR 349.4 EUR 1,258.8 EUR 1,157.8
Cost of software
revenue
(excluding
amortization of
acquired
intangibles) 11.2 13.4 53.0 49.6
Cost of services
and other
revenue 39.2 39.3 156.3 143.7
Research and
development 74.6 75.1 302.9 299.9
Marketing and
sales 95.1 84.3 350.0 296.0
General and
administrative 26.7 24.4 97.1 83.7
Amortization of
acquired
intangibles 11.4 8.6 46.8 39.0
---------------------------------------------------
Total Operating
Expenses EUR 258.2 EUR 245.1 EUR 1,006.1 EUR 911.9
===================================================
Operating Income EUR 104.9 EUR 104.3 EUR 252.7 EUR 245.9
Financial revenue
and other, net (0.7) 4.3 7.3 4.6
---------------------------------------------------
Income before
income taxes 104.2 108.6 260.0 250.5
Income tax
expense (27.5) (31.6) (81.2) (70.8)
Minority interest (0.1) 1.2 (0.3) 0.1
===================================================
Net Income EUR 76.6 EUR 78.2 EUR 178.5 EUR 179.8
===================================================
Basic net income
per share 0.65 0.68 1.53 1.56
===================================================
Diluted net
income per share EUR 0.64 EUR 0.66 EUR 1.49 EUR 1.51
===================================================
Basic weighted
average shares
outstanding (in
millions) 117.2 115.5 116.4 115.2
===================================================
Diluted weighted
average shares
outstanding (in
millions) 120.6 119.0 119.6 119.1
----------------------------------------------------------------------
U.S. GAAP revenue variation as reported and in constant currencies
----------------------------------------------------------------------
----------------------------------------------------------------------
Three months ended Twelve months ended
Dec. 31, 2007 Dec. 31, 2007*
-----------------------------------------
Variation* Variation Variation* Variation
in cc** in cc**
----------------------------------------------------------------------
GAAP Revenue 4% 10% 9% 15%
GAAP Revenue by activity
Software Revenue 8% 14% 10% 16%
Services and other Revenue (13%) (7%) 0% 6%
GAAP Software Revenue by
segment
PLM software revenue 7% 14% 11% 17%
of which CATIA software
revenue 8% 14% 7% 12%
of which ENOVIA software
revenue 12% 8% 30% 37%
Mainstream 3D software
revenue 9% 16% 8% 15%
GAAP Revenue by geography
Americas (2%) 10% 10% 20%
Europe 6% 6% 6% 6%
Asia 8% 21% 12% 24%
----------------------------------------------------------------------
* Variation compared to the same period in the prior year. - ** In constant currencies.
DASSAULT SYSTEMES
CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. GAAP)
(in millions of Euro, unaudited)
----------------------------------------------------------------------
December 31, December 31,
2007 2006
----------------------------------------------------------------------
TOTAL ASSETS
Cash and short-term investments 626.6 459.2
Accounts receivable, net 320.0 303.6
Other assets 1,004.5 1,093.2
----------------------------
Total assets EUR 1,951.1 EUR 1,856.0
----------------------------------------------------------------------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
Long-term debt 202.9 204.3
Other liabilities 552.4 541.7
Shareholders' equity 1,195.8 1,110.0
----------------------------
Total liabilities and shareholders' EUR 1,951.1 EUR 1,856.0
equity
----------------------------------------------------------------------
DASSAULT SYSTEMES
CONDENSED CASH FLOW STATEMENTS (U.S. GAAP)
(in millions of Euro, unaudited)
----------------------------------------------------------------------
Three months ended Twelve months ended
-------------------------------------------------------
December December December December
31, 31, Variation 31, 31, Variation
2007 2006 2007 2006
----------------------------------------------------------------------
Net Income 76.6 78.2 (1.6) 178.5 179.8 (1.3)
Changes in
working
capital and
non-cash P&L
items (5.7) (39.9) 34.2 132.5 83.1 49.4
-------------------------------------------------------
Net Cash
provided by
operating
activities 70.9 38.3 32.6 311.0 262.9 48.1
Acquisition of
assets and
equity, net
of cash (15.5) (6.5) (9.0) (105.8) (286.9) 181.1
Sale of assets
and equity 0.2 0.0 0.2 0.3 0.1 0.2
Loans and
others 0.2 0.1 0.1 (0.3) 1.9 (2.2)
--------------------------------------------------------
Net Cash
provided by
(used in)
investing
activities (15.1) (6.4) (8.7) (105.8) (284.9) 179.1
Borrowings 0.0 0.0 0.0 0.0 200.0 (200.0)
Share
repurchase
and proceeds
from stock
option
exercise, net 10.1 (19.6) 29.7 48.0 (25.2) 73.2
Payments on
capital lease
obligations 0.0 (0.4) 0.4 (0.4) (1.7) 1.3
Cash dividend
paid 0.0 0.0 0.0 (50.8) (48.2) (2.6)
--------------------------------------------------------
Net Cash
provided by
(used in)
financing
activities
(1) 10.1 (20.0) 30.1 (3.2) 124.9 (128.1)
Effect of
exchange rate
changes on
treasury (2) (10.4) (8.0) (2.4) (34.6) (23.6) (11.0)
========================================================
Increase
in treasury
(2) 55.5 3.9 51.6 167.4 79.3 88.1
----------------------------------------------------------------------
----------------------------------------------------------------------
Treasury (2)
at beginning
of period 571.1 455.3 459.2 379.9
Treasury (2)
at end of
period 626.6 459.2 626.6 459.2
----------------------------------------------------------------------
(1) Excluding changes in short-term investments.
(2) Treasury includes cash, cash equivalents and short-term
investments.
DASSAULT SYSTEMES
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
US GAAP - NON-GAAP RECONCILIATION
(in millions of Euro, except per share data, unaudited)
Readers are cautioned that the supplemental non-GAAP information
presented in this press release is subject to inherent limitations.
It is not based on any comprehensive set of accounting rules or
principles and should not be considered as a substitute for U.S. GAAP
measurements. Also, our supplemental non-GAAP financial information
may not be comparable to similarly titled non-GAAP measures used by
other companies. Further specific limitations for individual non-GAAP
measures, and the reasons for presenting non-GAAP financial
information, are set forth in the company's annual report for the
year ended December 31, 2006 on Form 20-F filed with the SEC on May
29, 2007. To compensate for these limitations, the supplemental non-
GAAP financial information should be read not in isolation, but only
in conjunction with our consolidated financial statements prepared in
accordance with U.S. GAAP.
----------------------------------------------------------------------
Three months ended December 31, Variation
-------------------------------------------------------
Adjust- 2007 Adjust- 2006 Non-
2007 ment non- 2006 ment non- GAAP
GAAP (1) GAAP GAAP (1) GAAP GAAP (2)
----------------------------------------------------------------------
Total Revenue EUR EUR EUR EUR
363.1 8.0 371.1 349.4 3.8 353.2 4% 5%
Total Revenue
breakdown by
activity
Software
revenue 308.3 8.0 316.3 286.6 3.8 290.4 8% 9%
of which
Recurring
Software
revenue 168.8 2.0 170.8 142.2 3.8 146.0
Recurring
portion of
Software
revenue 55% 54% 50% 50%
Services and
other revenue 54.8 62.8 (13%)
Total Software
Revenue
breakdown by
segment
PLM software
revenue 241.3 8.0 249.3 225.0 1.7 226.7 7% 10%
of which CATIA
software
revenue 145.2 7.4 152.6 135.0 8% 13%
of which
ENOVIA
software
revenue 50.3 0.6 50.9 44.9 1.8 46.7 12% 9%
Mainstream 3D
software
revenue 67.0 61.6 2.1 63.7 9% 5%
Total Revenue
breakdown by
geography
Americas 106.0 1.8 107.8 108.3 1.8 110.1 (2%) (2%)
Europe 181.4 4.8 186.2 170.9 1.4 172.3 6% 8%
Asia 75.7 1.4 77.1 70.2 0.6 70.8 8% 9%
----------------------------------------------------------------------
Total
Operating EUR EUR EUR EUR
Expenses 258.2 (16.5) 241.7 245.1 (13.0) 232.1 5% 4%
Stock-based
compensation
expense 5.1 (5.1) - 4.4 (4.4) - n/a n/a
Amortization
of acquired
intangibles 11.4 (11.4) - 8.6 (8.6) - n/a n/a
----------------------------------------------------------------------
Operating EUR EUR EUR EUR
Income 104.9 24.5 129.4 104.3 16.8 121.1 1% 7%
Operating
Margin 28.9% 34.9% 29.9% 34.3%
Income before
Income Taxes 104.2 24.5 128.7 108.6 16.8 125.4 (4%) 3%
Income tax
expense (27.5) (6.9) (34.4) (31.6) (9.3) (40.9) n/a n/a
Income tax
effect of
adjustments
above 6.9 (6.9) - 4.6 (4.6) - n/a n/a
One-time tax
restruc-
turing effects - 4.7 (4.7) - n/a n/a
Minority
interest (0.1) 1.2 n/a n/a
Net Income EUR EUR EUR EUR
76.6 17.6 94.2 78.2 7.5 85.7 (2%) 10%
Diluted Net
Income Per EUR EUR EUR EUR
Share (3) 0.64 0.14 0.78 0.66 0.06 0.72 (3%) 8%
----------------------------------------------------------------------
(1) In the reconciliation schedule above, (i) all non-GAAP adjustments to GAAP revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-GAAP adjustments to operating expenses data reflect the exclusion of the amortization of acquired intangibles and stock-based compensation expense (as detailed below), as indicated; and (iii) all non-GAAP adjustments to GAAP income data reflect the combined effect of these non-GAAP adjustments plus, with respect to net income and diluted net income per share, the exclusion of one- time tax restructuring effects in 2006.
----------------------------------------------------------------------
Three months ended December 31,
----------------------------------------------------------------------
2007 2006
2007 non- 2006 Non-
GAAP Adjustment GAAP GAAP Adjustment GAAP
----------------------------------------------------------------------
Cost of services and
other revenue 39.2 (0.2) 39.0 39.3 (0.2) 39.1
Research and development 74.6 (2.9) 71.7 75.1 (2.5) 72.6
Marketing and sales 95.1 (1.1) 94.0 84.3 (0.9) 83.4
General and
administrative 26.7 (0.9) 25.8 24.4 (0.8) 23.6
Total stock-based
compensation expense (5.1) (4.4)
----------------------------------------------------------------------
(2) The non-GAAP percentage increase (decrease) compares non-GAAP measures for the two different periods. In the event there is a non- GAAP adjustment to the relevant measure for only one of the periods under comparison, the non-GAAP increase (decrease) compares the non- GAAP measure to the relevant GAAP measure. (3) Based on a weighted average 120.6 million diluted shares for Q4 2007 and 119.0 million diluted shares for Q4 2006.
DASSAULT SYSTEMES
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
US GAAP - NON-GAAP RECONCILIATION
Readers are cautioned that the supplemental non-GAAP information
presented in this press release is subject to inherent limitations.
It is not based on any comprehensive set of accounting rules or
principles and should not be considered as a substitute for U.S. GAAP
measurements. Also, our supplemental non-GAAP financial information
may not be comparable to similarly titled non-GAAP measures used by
other companies. Further specific limitations for individual non-GAAP
measures, and the reasons for presenting non-GAAP financial
information, are set forth in the company's annual report for the
year ended December 31, 2006 on Form 20-F filed with the SEC on May
29, 2007. To compensate for these limitations, the supplemental non-
GAAP financial information should be read not in isolation, but only
in conjunction with our consolidated financial statements prepared in
accordance with U.S. GAAP.
----------------------------------------------------------------------
Twelve Months ended
December 31,
----------------------------
2007 Adjustment 2007
GAAP (1) non-GAAP
----------------------------------------------------------------------
Total Revenue EUR EUR
1,258.8 17.1 1,275.9
Total Revenue breakdown by activity
Software revenue 1,063.3 17.1 1,080.4
of which Recurring Software revenue 634.8 11.1 645.9
Recurring portion of Software revenue 60% 60%
Services and other revenue 195.5
Total Software Revenue breakdown by
segment
PLM software revenue 811.0 14.4 825.4
of which CATIA software revenue 478.4 8.5 486.9
of which ENOVIA software revenue 166.9 5.9 172.8
Mainstream 3D software revenue 252.3 2.7 255.0
Total Revenue breakdown by geography
Americas 391.8 6.1 397.9
Europe 575.9 8.4 584.3
Asia 291.1 2.6 293.7
----------------------------------------------------------------------
Total Operating Expenses EUR EUR
1,006.1 (64.7) 941.4
Stock-based compensation expense 17.9 (17.9) -
Amortization of acquired intangibles 46.8 (46.8) -
----------------------------------------------------------------------
Operating Income EUR EUR
252.7 81.8 334.5
Operating Margin 20.1% 26.2%
Income before Income Taxes 260.0 81.8 341.8
Income tax expense (81.2) (23.1) (104.3)
Income tax effect of adjustments above 23.1 (23.1) -
One-time tax restructuring effects -
Minority interest (0.3)
Net Income EUR EUR
178.5 58.7 237.2
Diluted Net Income Per Share (3) EUR EUR
1.49 0.49 1.98
----------------------------------------------------------------------
----------------------------------------------------------------------
Twelve Months ended
December 31, Variation
----------------------------------------
2006 Non-
2006 Adjustment non- GAAP
GAAP (1) GAAP GAAP (2)
----------------------------------------------------------------------
Total Revenue EUR EUR
1.157.8 19.7 1,177.5 9% 8%
Total Revenue breakdown by
activity
Software revenue 963.1 19.7 982.8 10% 10%
of which Recurring Software
revenue 512.1 19.7 531.8
Recurring portion of Software
revenue 53% 54%
Services and other revenue 194.7 0%
Total Software Revenue
breakdown by segment
PLM software revenue 730.5 16.1 746.6 11% 11%
of which CATIA software
revenue 447.8 0.1 447.9 7% 9%
of which ENOVIA software
revenue 128.2 9.3 137.5 30% 26%
Mainstream 3D software revenue 232.6 3.6 236.2 8% 8%
Total Revenue breakdown by
geography
Americas 356.0 10.5 366.5 10% 9%
Europe 541.9 6.4 548.3 6% 7%
Asia 259.9 2.8 262.7 12% 12%
----------------------------------------------------------------------
Total Operating Expenses EUR EUR
911.9 (50.6) 861.3 10% 9%
Stock-based compensation
expense 11.6 (11.6) - n/a n/a
Amortization of acquired
intangibles 39.0 (39.0) - n/a n/a
----------------------------------------------------------------------
Operating Income EUR EUR
245.9 70.3 316.2 3% 6%
Operating Margin 21.2% 26.9%
Income before Income Taxes 250.5 70.3 320.8 4% 7%
Income tax expense (70.8) (32.6) (103.4) n/a n/a
Income tax effect of
adjustments above 21.1 (21.1) - n/a n/a
One-time tax restructuring
effects 11.5 (11.5) - n/a n/a
Minority interest 0.1 n/a n/a
Net Income EUR EUR
179.8 37.7 217.5 (1%) 9%
Diluted Net Income Per Share EUR EUR
(3) 1.51 0.32 1.83 (1%) 8%
----------------------------------------------------------------------
(1) In the reconciliation schedule above, (i) all non-GAAP adjustments to GAAP revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-GAAP adjustments to operating expenses data reflect the exclusion of the amortization of acquired intangibles or stock-based compensation expense (as detailed below), as indicated; and (iii) all non-GAAP adjustments to GAAP income data reflect the combined effect of these non-GAAP adjustments, plus, with respect to net income and diluted net income per share, the exclusion of one-time tax restructuring effects in 2006.
Twelve months ended December 31,
----------------------------------------------------------------------
2007 2006
2007 non- 2006 non-
GAAP Adjustment GAAP GAAP Adjustment GAAP
----------------------------------------------------------------------
Cost of services and
other revenue 156.3 (0.7) 155.6 143.7 (0.4) 143.3
Research and development 302.9 (10.3) 292.6 299.9 (6.8) 293.1
Marketing and sales 350.0 (3.7) 346.3 296.0 (2.5) 293.5
General and
administrative 97.1 (3.2) 93.9 83.7 (1.9) 81.8
Total stock-based
compensation expense (17.9) (11.6)
----------------------------------------------------------------------
(2) The non-GAAP percentage increase (decrease) compares non-GAAP measures for the two different periods. In the event there is a non-GAAP adjustment to the relevant measure for only one of the periods under comparison, the non-GAAP increase (decrease) compares the non-GAAP measure to the relevant GAAP measure.
(3) Based on a weighted average 119.6 million diluted shares for 2007 and 119.1 million diluted shares for 2006.
DASSAULT SYSTEMES
NON-GAAP KEY FIGURES
(in millions of Euro, except per share data, headcount and exchange
rates, unaudited)
Non-GAAP key figures exclude the effects of adjusting the carrying
value of acquired companies' deferred revenue, amortization of
acquired intangible assets, stock-based compensation expense and the
one-time effects of a tax restructuring.
Comparable U.S. GAAP financial information and a reconciliation of the
GAAP and non-GAAP measures are set forth in the preceding tables.
----------------------------------------------------------------------
Three months ended
----------------------------------------------
December 31, December 31, Variation
2007 2006 Variation in cc*
----------------------------------------------------------------------
Non-GAAP Revenue EUR 371.1 EUR 353.2 5% 12%
Non-GAAP Revenue
breakdown by activity
Software Revenue 316.3 290.4 9% 16%
Services and other
Revenue 54.8 62.8 (13%) (7%)
Non-GAAP Software
Revenue breakdown by
segment
PLM software revenue 249.3 226.7 10% 17%
of which CATIA software
revenue 152.6 135.0 13% 20%
of which ENOVIA
software revenue 50.9 46.7 9% 16%
Mainstream 3D software
revenue 67.0 63.7 5% 12%
Non-GAAP Revenue
breakdown by geography
Americas 107.8 110.1 (2%) 10%
Europe 186.2 172.3 8% 8%
Asia 77.1 70.8 9% 22%
----------------------------------------------------------------------
Non-GAAP Operating
Income EUR 129.4 EUR 121.1 7%
Non-GAAP Operating
Margin 34.9% 34.3%
Non-GAAP Net Income 94.2 85.7 10%
Non-GAAP Diluted Net
Income Per Share EUR 0.78 EUR 0.72 8%
----------------------------------------------------------------------
Closing headcount
----------------------------------------------------------------------
Average Rate USD per
Euro 1.45 1.29 12%
Average Rate JPY per
Euro 164.3 151.9 8%
----------------------------------------------------------------------
----------------------------------------------------------------------
Twelve months ended
----------------------------------------------
December 31, December 31, Variation
2007 2006 Variation in cc*
----------------------------------------------------------------------
Non-GAAP Revenue EUR 1,275.9 EUR 1,177.5 8% 14%
Non-GAAP Revenue
breakdown by activity
Software Revenue 1,080.4 982.8 10% 16%
Services and other
Revenue 195.5 194.7 0% 6%
Non-GAAP Software
Revenue breakdown by
segment
PLM software revenue 825.4 746.6 11% 16%
of which CATIA software
revenue 486.9 447.9 9% 14%
of which ENOVIA
software revenue 172.8 137.5 26% 32%
Mainstream 3D software
revenue 255.0 236.2 8% 14%
Non-GAAP Revenue
breakdown by geography
Americas 397.9 366.5 9% 19%
Europe 584.3 548.3 7% 7%
Asia 293.7 262.7 12% 24%
----------------------------------------------------------------------
Non-GAAP Operating
Income EUR 334.5 EUR 316.2 6%
Non-GAAP Operating
Margin 26.2% 26.9%
Non-GAAP Net Income 237.2 217.5 9%
Non-GAAP Diluted Net
Income Per Share EUR 1.98 EUR 1.83 8%
----------------------------------------------------------------------
Closing headcount 7,459 6,840 9%
----------------------------------------------------------------------
Average Rate USD per
Euro 1.37 1.26 9%
Average Rate JPY per
Euro 161.4 146.1 10%
----------------------------------------------------------------------
* In constant currencies.
Contact:
Dassault Systèmes:
Valérie
Agathon/Beatrix Martinez, 33.1.40.99.69.24
Or
Financial
Dynamics:
Harriet Keen/Haya Chelhot, 44.20.7831.3113
or
Laurence
Borbalan/Carole Richon
Florence de Montmarin
33.1.47.03.68.10