Commentary: MCAD Industry View - A November 2006 Update

Dr. Russ Henke Dr. Jack Horgan Commentary

MCAD Industry View — A November 2006 Update


by Drs. Russ Henke & Jack Horgan
Henke Associates

In the first MCAD Industry Commentary published May 2003 in MCADCafé.com, then-recent yearly and quarterly financial performances of a selected group of public Mechanical Computer Aided Design (MCAD) companies were analyzed and compared. Expectations of future financial performances of these same MCAD entities were documented. The May 2003 MCAD Commentary was followed by fourteen quarterly updates in MCADCafé.com, one for each subsequent calendar quarter. URL's on all past articles are available. The entities covered were ANSYS, Autodesk, Dassault Systemes, UGS PLM, ESI Group, Moldflow, MSC.Software, PTC and Tecnomatix.

As a result of the acquisition of Tecnomatix by UGS that closed April 1, 2005, Tecnomatix was eliminated from coverage thereafter as a separate entity.

Accordingly, this fifteenth article in the sequel recounts the financial performances of the remaining group-of-eight (G8) MCAD/PLM entities for the nominal third quarter of 2006.

Recent MCAD & PLM News Highlights

On October 18, 2006 PTC announced it had acquired ITEDO Software GmbH and ITEDO Software LLC (collectively, ITEDO), headquartered in Germany, for approximately $17 million in cash.

On November 16, 2006 ANSYS, Inc. announced that affiliates of Willis Stein & Partners have agreed to sell 3,350,356 shares of ANSYS common stock that represent approximately 8.7% of ANSYS' currently outstanding shares of common stock and that were originally acquired by Willis Stein in connection with the Company's acquisition of Fluent Inc. in May 2006.

On November 16, 2006, MSC.Software Corporation announced that the staff of the SEC has formally notified the company that the SEC has terminated its investigation that has been underway since April 2005. No enforcement action has been recommended as a result of this investigation.

MCAD Vendors' Financial Performances in Q3 2006

As a group, the G8 MCAD vendors generated combined revenues of $1.45 billion in the third quarter of 2006. This was a robust revenue increase of nearly 22% from the $1.2 billion reported in the third quarter of 2005, and a 2.3% rise from the $1.4 billion in the just prior quarter.

Company

Last QTR Revenue

Prev QTR Revenue

Last vs. Prev QTR

Comparable 2005 QTR

Last QTR vs. Comparable QTR

ANSYS

70

62

12.6%

39

79.6%

Autodesk

457

450

1.6%

378

20.9%

Dassault (�)

276

280

-1.3%

214

29.2%

Dassault ($)

351

360

-2.6%

261

34.5%

ESI Group (�)

13.6

12.8

6.4%

11.9

14.6%

ESI Group ($)

17.3

16.1

7.2%

14.5

19.3%

Moldflow

15

17

-10.6%

15

0.2%

MSC

58

68

-14.1%

76

-22.8%

PTC

246

217

13.3%

195

25.8%

UGS PLM

296

297

-0.4%

290

1.8%

Total

1,452

1,419

2.3%

1,193

21.7%

Table 1 - Quarterly Revenues of G8 MCAD Vendors (US$ millions)

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