Thibault de Tersant, Senior Executive Vice President and CFO, commented, “Our third quarter financial performance came in well in line with our objectives, in fact, at the high end with software revenue up 12% in constant currencies and earnings per share rising 26%, demonstrating the inherent earnings leverage of our business model.
“Turning to our outlook, we expect 2008 to be a year of strong, organic software growth for DS. We have factored into our fourth quarter and full year outlook the signs of weakening we saw in September due to the economic crisis. However, thanks to our diversification strategy, sales channels expansion, recurring revenue model and year-to-date results, we continue to target a non-GAAP software revenue growth objective of 12% in constant currencies. Additionally, we are increasing our 2008 non-GAAP EPS objective range to €2.15 to €2.20 from €2.10 to €2.17 previously. Our fourth quarter objective assumes a US dollar to euro exchange rate of $1.45 per €1.00, reflecting the fact that the US dollar continues to be very volatile at this point in time.”
The Company’s objectives are prepared and communicated only on a non-GAAP basis and are subject to the cautionary statement set forth below. The Company’s objectives are the following:
The non-GAAP objectives set forth above do not take into account the following accounting elements: deferred revenue write-downs estimated at approximately €4 million for 2008; stock-based compensation expense estimated at approximately €21 million for 2008 and amortization of acquired intangibles estimated at approximately €45 million for 2008. The above objectives do not include any impact from other operating income and expense, net comprised of income and expenses in connection with the relocation of the Company’s corporate headquarters and restructuring expenses, which totaled €6 million in the third quarter and €8.5 million year-to-date. These estimates also do not include any new stock option or share grants, or any new acquisitions or restructurings completed after October 29, 2008.
Webcast and conference call information
Dassault Systèmes will host a webcast and a conference call today, Wednesday, October 29, 2008. Management will host a webcast at 8:30 AM London time/9:30 AM CET time and will then host a conference call at 2:00 PM London time/3:00 PM CET/ 10:00 AM New York time. The webcast and conference call will be available via the Internet by accessing http://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 Systèmes’ Investor Relations at 188.8.131.52.69.24.
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 € 1.00
and an average Japanese yen to euro exchange rate of JPY145 to € 1.00
for the 2008 fourth quarter and an average U.S. dollar to euro exchange
rate of US$1.50 per € 1.00 and an average
Japanese yen to euro exchange rate of JPY157 to € 1.00
for the 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 although we have tried to factor in the potential impact of
the current global financial crisis on our fourth quarter objectives,
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 the
current global financial crisis, 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, 2007,
which was filed with the SEC on April 4, 2008, could materially affect
the Company ’ s financial position or results