MCAD/MCAE Industry View – An August 2010 Update
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MCAD/MCAE Industry View – An August 2010 Update


Commentary:

MCAD/MCAE Industry View – An August 2010 Update


by Dr. Russ Henke
Henke Associates


Introduction:

This August 2010 issue of the MCAD/MCAE Industry Commentary recounts the financial performances of a selected group-of-five MCAD/PLM/MCAE vendors (G5) for the nominal Second Quarter of calendar 2010.

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) and Mechanical Computer Aided Engineering (MCAE) vendor companies were analyzed and compared. Expectations of future financial performances of these same entities were documented.

The May 2003 MCAD Commentary was followed by twenty-eight (28) quarterly updates in MCADCafé.com, one for each subsequent calendar quarter. URL's on all past articles are available. The entities initially covered were ANSYS, Autodesk, Dassault Systèmes, 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.

On May 7, 2007 UGS announced the close of its acquisition by Siemens AG effective May 4. Thereafter, the business went to market as UGS PLM Software (and later as Siemens PLM Software), a global division of the Siemens Automation and Drives (A&D) Group. Over the years UGS itself had bounced back and forth between being a public company and a private company under different ownerships. Regrettably, we have been able to gain very little insight into UGS' financial performance itself from public Siemens' corporate reports after the Siemens acquisition. Occasionally we will include Siemens PLM Software news items that bear on the industry as a whole.

Then on June 25, 2008 Autodesk completed its acquisition of Moldflow Corporation, so thereafter Moldflow was eliminated here from separate coverage.

On July 07, 2009 MSC.Software announced that it had entered into a definitive agreement with affiliates of Symphony Technology Group (STG) under which a company controlled by STG would acquire all of MSC's outstanding shares in a one-step cash merger transaction. This acquisition of MSC.Software by STG was finally consummated on October 14, 2009. No financial results for MSC.Software were published for Q3 2009, and none since. Unless and until such data are subsequently made available, MSC.Software has been dropped from coverage herein, although occasionally MSC.Software news items that bear on the industry as a whole will be mentioned.

Henke Associates recognizes that some MCAD/PLM/MCAE vendors have expanded their offerings into the world of “multi-physics” by moving beyond pure MCAD into other disciplines, such as fluid dynamics and electronic analysis (e.g. ANSYS). This Commentary will also report on these new areas as appropriate. (The EDA WEEKLY posted on EDACafe.com on July 19, 2010, entitled, “ANSYS turns 40!” dealt with ANSYS multi-physics, and it is available in the EDACafe.com EDA WEEKLY archives).

This thirtieth MCAD/MCAE Industry article in the sequel recounts mainly the financial performances of the remaining group-of-five (G5) MCAD/PLM/MCAE entities for the nominal second quarter of calendar 2010:




The following is divided into two (2) basic sections, the first of which discusses the G5 financial results for the nominal Second Quarter of Calendar 2010, and the second section covers Recent MCAD/MCAE News Highlights. Enjoy!


G5 MCAD/MCAE Vendors' Financial Performances in Q2 2010:

Measured in $US except where indicated, Table 1 below reveals that the combined total revenue of the G5 was $1364.8 million in Q2 2010, a figure which was a mere 3.1% above combined total in sequential Q1 2010, but it was almost 13% better year over year than Q2 2009.

Dassault Systemes contributed the most ($60.4 million) to the modest 3.1% G5 growth in $US revenue of Q2 2010 over Q1 2010, less some $21 million for ESI Group. All the vendors save ESI Group contributed significantly to the 13% year over year improvement in total G5 quarterly revenues, except for ESI Group's tiny reduction.




Note: FX rates are averages used to match the various quarters shown, verified by www.x-rates.com using monthly average exchange rates averaged into quarters. The relevant FX rates used are as follows: euros to dollars Q2 2010 = 1.27277, Q1 10 = 1.38, Q4 09= 1.48, and Q2 09 = 1.362.

We turn now to earnings in Table 2 below. Measured in US$, the four vendors reporting earnings created almost $38 million more in Q2 2010 earnings than in Q1 2010, with Autodesk contributing 61% of the increase and DS some 27%.

Furthermore, Q2 2010 sported nearly $92 million better year over year net income for the G4 than the recessionary Q2 2009. Here again, Autodesk was responsible for 54% of the increase, DS 29%, and ANSYS and PTC tossed in the remaining 17% of the $92 million increment.

The $168.2 million of net income on $1334.56 million in revenues among the four vendors reporting earnings in nominal Q2 2010 represents a very healthy 12.6% ROS.




Details on Individual G5 Vendors' Q2 2010 Performances




On August 05, 2010 ANSYS, Inc. (NASDAQ: ANSS) announced in-line performance against its guidance in nominal Q2 2010 revenue, and it announced over-performance in non-GAAP Earnings Per Share (EPS) for the second quarter of 2010.

Double digit revenue growth in the second quarter was again spread across all major geographic regions, all major product lines and a broad array of industries. Solid top line performance translated to strong margins and 16% non-GAAP earnings per share growth in the second quarter. (Note: The MCAD Commentary usually deals only with GAAP numbers, but the non-GAAP mention was recounted here because ANSYS saw fit to highlight it. However, the remainder of this segment on ANSYS will deal solely in GAAP data).

"This quarter's results continue to reflect the improved business momentum that we have seen over the last few quarters, in spite of the greater than anticipated negative currency effects, due mostly to the volatility of the Euro. Overall, our business performed well on both the license and maintenance fronts, with a positive contribution from all major geographies. We strengthened our balance sheet, reduced our overall debt and our deferred revenue balance increased to an all time high," stated Jim Cashman, ANSYS president and CEO. "We are encouraged by our first half performance, despite pockets of uncertainty that remain in the global business climate. We also continue to validate our belief about the future potential of simulation through our customers' continued adoption of the ANSYS simulation suite to transform their product design processes, taking advantage of the strength of our broad physics portfolio to drive innovation, efficiencies and productivity gains."

ANSYS reported total GAAP revenue of $137.8 million in Q2 2010, 13% higher than the $122.0 million in the second quarter of 2009, and 1.3% more as compared to sequential Q1 2010 revenue of $136.0 million. (ANSYS also reported total GAAP revenue of $273.8 million in the first six months of 2010 as compared to $238.3 million in the first six months of 2009). Note: As implied in the first sentence in this ANSYS section, revenue of $137.8 million in Q2 2010 was right in the middle of the guidance given last quarter for Q2.

GAAP net income of $35.5 million was reported for the second quarter of 2010, 31% higher than the $27.1 million in the second quarter of 2009, and 9.6% higher as compared to $32.4 million in sequential Q1 2010. (GAAP net income was $67.9 million in the first six months of 2010 was 41% higher than the $48.2 million in the first six months of 2009).

This performance resulted in GAAP diluted earnings per share of $0.38 in the second quarter of 2010 as compared to $0.30 in the second quarter of 2009; and GAAP diluted earnings per share of $0.73 in the first six months of 2010 as compared to $0.53 in the first six months of 2009. Note: The $0.38 EPS figure was 2 cents above the top of the guidance range given 3 months ago for Q2 2010.


Third Quarter and Fiscal Year/Calendar 2010 Guidance

The Company currently expects the following for the third quarter ending September 30, 2010:

The Company currently expects the following for the fiscal year ending December 31, 2010:


ANSYS' self description:

ANSYS, Inc., founded in 1970, develops and globally markets engineering simulation software and technologies widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia. The Company focuses on the development of open and flexible solutions that enable users to analyze designs directly on the desktop, providing a common platform for fast, efficient and cost-conscious product development, from design concept to final-stage testing and validation. The Company and its global network of channel partners provide sales, support and training for customers. Headquartered in Canonsburg, Pennsylvania, U.S.A., with more than 60 strategic sales locations throughout the world, ANSYS, Inc. and its subsidiaries employ over 1,600 people and distribute ANSYS products through a network of channel partners in over 40 countries. Visit www.ansys.com for more information.



The day before ANSYS' Q2 2010 results were announced by CEO Jim Cashman, ANSYS stock closed at 46.58, which was a record high. The August 5 day of ANSYS' Q2 results' announcement itself, despite the favorable Q2 results numbers provided above, the ANSYS stock price slipped to 43.96, or a loss of 5.62%. It is noted that the entire NASDAQ went from 2303.57 on August 4 to 2293.06 on August 5, or a loss of only 0.46%, but still a loss. Some analysts said that ANSYS did not quite achieve all its goals in Q2 2010, but we saw above that ANSYS exceeded both its revenue guidance and its EPS guidance issued 3 months earlier.

By August 16, ANSYS stock had fallen to close at 40.87 on August 16, or 12.3% off its record high. Meanwhile, the NASDAQ had also dropped to 2181.87, or 121.7 points, or a loss of 5.3%.

However, on August 17, ANSYS stock arrested its falling direction and closed at 41.84 after nudging 42.21 during the trading day. The NASDAQ closed at 2209.44, up 1.26% for the day, reversing its 4 day drift.








On August 12, 2010 Autodesk, Inc. (NASDAQ: ADSK) reported its financial results for its second fiscal quarter of 2011, the period ending July 31, 2010, treated here as “nominal Q2 2010”.

Nominal Q2 2010 Revenue was $473 million, an increase of 14% as compared to $415 million in Q2 2009 and approximately flat sequentially (down 0.4%). The $473 million revenue figure for nominal Q2 2010 was $13 million above the top of the revenue range issued as guidance last quarter.

Autodesk experienced year-over-year growth in each major geography. Revenue in the Americas was $168 million, an increase 6% compared to the second quarter last year and 4% sequentially. The Americas posted year-over-year growth for the first time since nominal Q2 2008.

Nominal Q2 2010 revenue results in Autodesk's international geographies were particularly solid, with all of its top 5 countries showing year-over-year growth.

GAAP Net Income for nominal Q2 2010 was $60 million, a vast year over year improvement compared to the Q2 2009 figure of $10.5 million, and up sequentially over 62% from the $36.9 million of Q1 2010

On a GAAP basis, nominal Q2 2010 diluted earnings per share were $0.25, compared to diluted earnings per share of $0.05 in the second quarter last year, and diluted earnings per share of $0.16 sequentially in nominal Q1 2010. The EPS figure of $0.25 for nominal Q2 2010 was in fact 8 cents above the top of the range of EPS guidance issued three months ago.

Revenue from commercial new licenses continued its momentum, growing 46% compared to the second quarter last year and 18% sequentially.

On a product family basis, nominal Q2 2010 revenue from Autodesk's model-based design products was $138 million, an increase of 14% compared to the second quarter last year, and flat sequentially. Year-over-year growth in Autodesk's model-based design products was led by growth in Autodesk's Inventor and Revit families of products.

Autodesk's horizontal design products, which consist primarily of AutoCAD and AutoCAD LT, grew 25% compared to the second quarter last year but declined 5% sequentially. Revenue from vertical design products, such as AutoCAD Architecture and AutoCAD Mechanical, increased 14% compared to the second quarter last year and was flat sequentially.

Combined revenue from horizontal design products and vertical design products was $231 million, an increase of 22% compared to the second quarter last year but a decrease of 3% sequentially.

Guidance for nominal Q3 2010 (the quarter ending October 31, 2010) is for total Autodesk revenue of $450 million to $475 million, and GAAP EPS between $0.18 and $0.23.

“Our focus on growing our revenue base while controlling costs resulted in better than expected revenue and profitability in the second quarter," said Carl Bass, Autodesk president and CEO. “Although the pace of the global recovery is varied by country, we are pleased that we achieved revenue growth in all of our major geographies. We experienced strong year-over-year growth in many key areas including operating margin, revenue from commercial new licenses, and cash flow from operations. Our results reflect the traction that we are gaining in both new and existing accounts.”


Autodesk's self description:

Autodesk, Inc., is a leader in 3D design, engineering and entertainment software. Customers across the manufacturing, architecture, building, construction, and media and entertainment industries - including the last 15 Academy Award winners for Best Visual Effects - use Autodesk software to design, visualize, and simulate their ideas. Since its introduction of AutoCAD software in 1982, Autodesk continues to develop the broadest portfolio of state-of-the-art software for global markets. For additional information about Autodesk, visit www.autodesk.com.

Autodesk and AutoCAD are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. Academy Award is a registered trademark of the Academy of Motion Picture Arts and Sciences. All other brand names, product names, or trademarks belong to their respective holders. Autodesk reserves the right to alter product and service offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document. © 2010 Autodesk, Inc. All rights reserved.




While Autodesk stock did not react too much on nominal Q2 2010 financial results announcement day August 12, 2010 (its stock opened at 27.26 and closed at 27.45), Friday the 13th was a different story: the stock opened higher at 28.57, visited a high of 29.68 (+8.12%), before settling at 28.12 (+2.44%) at the close. While ADSK then flirted with a smaller high of 28.55 on Monday, it drifted down to an even lower close of 27.66 on August 16. Meanwhile the NASDAQ was drifting very slightly lower over those 4 days.

On Tuesday August 17, the Autodesk stock again visited a high of 28.39 before closing at 27.91, up 0.9% for the day. The NASDAQ closed at 2209.44, up 1.26% for the day, reversing its 4 day drift.






On July 28, 2010 Dassault Systèmes (DS) (Paris: DSY) (Euronext Paris: #13065, DSY.PA) reported its IFRS[1] unaudited financial results for the second quarter ended June 30, 2010.


DS Q2 2010 Summary Highlights

“Dassault Systèmes had a very solid second quarter, with sales above the high end of our revenue target excluding any currency benefits, and earnings and operating margin results significantly above our objectives, thanks in large measure to execution at both the sales and operational levels. In the Mainstream 3D market, SolidWorks delivered strong results with new licenses up 20%, showing an encouraging business trend in the SMB market” commented Bernard Charlès, Dassault Systèmes President and Chief Executive Officer.

“On top of the smooth integration of IBM PLM, the second quarter was a very dynamic period with new strategic customer partnerships with leading, global companies including Michelin and Gap Inc., and more on the way. We added a new addressable market in search-based applications with the Exalead acquisition, expanded V6 PLM with a new release and with the Geensoft acquisition to advance in design and simulation for smart products. Looking forward, we are focused on the significant opportunity ahead of us to leverage both our direct and indirect sales resources to expand our presence across the eleven industries Dassault Systèmes serves.”

Anticipating the report of the details of Q2 2010, Dassault provided this preamble: DS completed the acquisition of the IBM PLM operations on March 31, 2010 and these operations were merged into the Company's operations within its PLM business segment for the three-month period commencing April 1, 2010. Due to the deep integration of former IBM PLM employees into the Company's operations, involving many changes in territories and responsibilities, it is not possible to track the IBM PLM revenue and profit since the acquisition date. As previously disclosed, the IBM PLM share of DS software revenue was estimated at approximately €53 million in the second quarter of 2009. The IBM PLM acquisition was a significant contributor to growth in direct sales and sales related headcount and in turn to revenue, expenses and earnings during the 2010 Second Quarter in comparison to the respective 2009 period.



IFRS earnings per diluted share increased 82% to €0.40, up from €0.22 in the 2009 second quarter.

Thibault de Tersant, Senior Executive Vice President and CFO, commented, “The quarter unfolded largely as we expected from a revenue perspective. We saw some upside thanks to our recurring software revenue, which has reached a positive inflection point somewhat earlier than we had estimated. Our customers are moving back to their historical subscription renewal levels, confirming the value our software brings to them. Our bottom-line performance was particularly gratifying, with a non-IFRS operating margin of 28% and an EPS growth of 57%, coming in above our objectives thanks principally to the continued positive impact of our 2009 efficiency plan and our revenue performance.

“Looking ahead we are reconfirming our second half outlook and adding to it the recently completed acquisitions, leading to an acceleration of revenue growth to about 22% to 25% in constant currencies for the 2010 second half. Taking into account the second quarter over-performance leads to an updated full year non-IFRS total revenue growth objective of 16% to 18% in constant currencies. Our objectives are consistent with our view of a gradual improvement in the economic environment.

“With respect to our earnings and operating margin objectives, we are now targeting non-IFRS EPS growth of 21% to 26% to reflect our continued focus on driving efficiencies across the business and benefiting from the progress made to date, and to take into account the currency evolution.”

The Company's current objectives are the following:

The Company's objectives are prepared and communicated only on a non-IFRS basis and are subject to the cautionary statement set forth below.

The non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2010 currency exchange rates above: deferred revenue write-downs estimated at approximately €17 million for 2010; share-based compensation expense estimated at approximately €21 million for 2010 and amortization of acquired intangibles estimated at approximately €66 million for 2010. The above objectives do not include any impact from other operating income and expense, net principally comprised of, acquisition, integration and restructuring expenses. These estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after July 29, 2010.

The DS Annual Shareholders' Meeting was held on May 27, 2010. At the meeting shareholders approved for the fiscal year ended December 31, 2009 the payment of an annual cash dividend equivalent to €0.46 per share, equal to the prior year. The Company has consistently paid annual cash dividends since its initial public offering in 1996. The cash dividend was paid on June 17, 2010.


Dassault Systèmes' self description:

As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systèmes brings value to more than 115,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes 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 Systèmes portfolio consists of CATIA for virtual product design - SolidWorks 3D for Professionals - DELMIA for virtual production - SIMULIA for realistic simulation - ENOVIA for global collaborative lifecycle management, and 3DVIA for online 3D lifelike experiences. Dassault Systèmes' shares are listed on Euronext Paris (#13065, DSY.PA) and Dassault Systèmes' ADRs may be traded on the US Over-The-Counter (OTC) market (DASTY). For more information, visit http://www.3ds.com








On June 15, 2010 ESI Group reported partial financial results for its first fiscal quarter, the quarter ended April 30, 2010. [Note: Consistent with past reporting practice in these MCAD COMMENTARIES, the ESI Group results for the quarter ended April 30, 2010 will be treated here as Nominal Q2 2010].

ESI Group Nominal Q2 2010 Summary:

Nominal Q2 2010, which is the first quarter of ESI's fiscal year, is “traditionally relatively non-significant, reflecting distinct economic influences: a fall in services activity mirroring the trend observed throughout the sector, but a strong level of repeat business for license sales and a significant upturn in new business. At the current time, we are confident that we will record a good global performance this financial year”, said Alain de Rouvray, ESI Group's Chairman and CEO.



Note Bene:

ESI Group Sales for the first quarter of its current financial year (Nominal Q2 2010) totaled 15.9 million euros, down -2.9% in actual terms and down -3.7% by volume (constant exchange rates) compared to the 16.4 million euros of the same quarter of the previous year. The evolution of the geographical split in activity reflects the return to buoyant growth in Asia compared to Europe or the Americas, which are continuing to be affected by the economic situation. Europe thus accounted for 37% of Nominal Q2 activity, the Americas for 20% and Asia for 43%.

License sales totaled 11.0 million euros in Nominal Q2 2010. Given the difficult economic environment, and in line with trends observed throughout the sector, Services activity was down by -7.6% in actual terms and -7.7% by volume. Services were notably affected by postponed contracts due to budget deferments. This activity represented 31% of total quarterly activity, versus 32% last year. This trend is expected to stabilize over the next quarter.


ESI's self-description:

ESI is a pioneer and world-leading solution provider in virtual prototyping that takes into account the physics of materials. ESI has developed an extensive suite of coherent, industry-oriented applications to realistically simulate a product's behavior during testing, to fine-tune manufacturing processes in accordance with desired product performance, and to evaluate the environment's impact on performance. ESI's solutions fit into a single collaborative and open environment for End-to-End Virtual Prototyping, thus eliminating the need for physical prototypes during product development. The company employs over 750 high-level specialists worldwide covering more than 30 countries. ESI Group is listed in compartment C of NYSE Euronext Paris.


NYSE Euronext





On July 27, 2010 PTC (NASDAQ: PMTC) reported results for its third fiscal quarter ended July 3, 2010, referred to as Nominal Q2 2010 for purposes of this MCAD Commentary.


Nominal Q2 2010 Highlights

The Q2 2010 results include a GAAP tax rate of 8%.


Nominal Q2 2010 Results Commentary

C. Richard Harrison, chairman and chief executive officer, commented, "Q2 2010 was another solid quarter for PTC with total revenue up 7% year-over-year and license revenue up 37%. Our revenue performance was above the high-end of our expectations, driven primarily by continued strength of our PLM business." On a constant currency basis total Q2 2010 revenue was up 8% and license revenue was up 39% compared to the year ago period. Our PLM license revenue in Q3 was $36.5 million, up 63% year-over-year, continuing to highlight our leadership position in a large and growing segment of the enterprise software market," continued Harrison. "Our pipeline for new business opportunities with new and existing customers remains strong. During the quarter we recognized revenue from leading organizations such as BAE, Compal Electronics, Continental AG, Fresenius Medical Care, Harman Becker, Kuhn, Lenovo, NASA, Samsung, and the United States Navy."

James Heppelmann, president and chief operating officer added, "Our continued revenue momentum in the PLM market is further bolstered by an additional 2 'domino' account wins during Q2 2010.. Since 2009, we have won 15 strategically important domino accounts, all of which are large multinational companies who have chosen to standardize their PLM initiatives on our Windchill platform. Dominoes represent the largest of the many competitive displacement opportunities we are pursuing, and we believe they are a clear indicator of our momentum in the PLM market. They also demonstrate that PTC is gaining share and becoming recognized as the industry leader for both our technology and product development process expertise. We are further engaged in more than 250 other opportunities world-wide with companies that are looking to replace their existing PLM solution to help improve their competitive position in their own markets."

"We are very optimistic about the long-term opportunity for PTC and are committed to achieving our goal of a 20% non-GAAP EPS CAGR over the next 5 years," continued Heppelmann. "Based on the market momentum we are seeing, the strength of our pipeline and our increased sales capacity, we continue to be excited about our FY'11 growth opportunity. We will provide formal FY'11 guidance when we issue our quarterly results in October."

Neil Moses, chief financial officer, commented, "In addition to strong license revenue performance in Q3, our maintenance and services revenue were essentially flat on a year-over-year basis, indicating that the impact of the soft license sales in 2009 is bottoming. We also saw modest license growth in both our CAD and SMB businesses, which we view as a sign of recovery in those markets. Our balance sheet remains solid with $219 million of cash. During Q3 we repurchased $15 million worth of our stock and repaid the remaining outstanding balance on our revolving credit facility."


Outlook Commentary

"Looking forward to the remainder of FY'10, our results (this past quarter) give us increased confidence in our ability to meet our full-year revenue target of $1 billion," continued Moses. "We have raised our currency assumption from $1.20 USD/EURO to $1.25 USD/EURO, which positively impacts revenue by approximately $3 million and negatively impacts expense by approximately $1 million [for nominal Q3 2010]. We are maintaining our full [fiscal] year license revenue growth expectations of 35% to 40% year over year, with our combined maintenance and services businesses expected to be down modestly on a year-over-year basis."

The FY'10 targets assume a non-GAAP tax rate of 25%, a GAAP tax rate of 16% and 120 million diluted shares outstanding. The FY'10 non-GAAP guidance excludes approximately $49 million of stock-based compensation expense, $34 million of acquisition-related intangible asset amortization and $27 million of related income tax effects.

The Nominal Q3 2010 guidance assumes a GAAP tax rate of 17% and 120 million diluted shares outstanding.

PTC HEADCOUNT

Total PTC headcount was 5,289 at the end of Nominal Q2 2010, up slightly from 5,205 at the end of nominal Q1 2010.

M&A

PTC says it views M&A primarily as a strategic vehicle to further enhance oits product portfolio and growth opportunity.
PTC intends to remain opportunistic as it relates to M&A throughout the course of the year. The Company has $230 million available under a revolving credit facility as well as available cash with which to execute strategic M&A opportunities. However, the majority of PTC's M&A opportunities comprise small, strategic technology tuck-ins. For example, early in Q1 2010 PTC acquired technology in the fast growing carbon information management market, enhancing its product analytics platform with “green product development” capabilities.

WRAP-UP

Given the strength of its nominal Q2 2010 results, PTC management says it is increasingly confident in the Company's ability to achieve its fiscal year target of $1 billion in revenue. From a strategic perspective, PTC is engaged in more than 250 competitive displacement opportunities; PTC has been named Microsoft Global ISV Industry Partner of the Year; and PTC is seeing year over year license growth in the CAD and SMB markets.

PTC self-description:

PTC provides discrete manufacturers with software and services to meet the globalization, time-to-market and operational efficiency objectives of product development. Using the company's PLM and CAD solutions, organizations in the Industrial, High-Tech, Aerospace and Defense, Automotive, Retail & Consumer and Medical industries are able to support key business objectives and create innovative products that meet customer needs and comply with industry regulations. For more information on PTC, please visit http://www.ptc.com/.



Recent MCAD/MCAE News Highlights:



In today's media, one often hears, “Didn't the futurists promise flying cars by now?” Check out this next news release:


Terrafugia's "Roadable Aircraft" Engineered with Virtual Prototyping from ANSYS

On July 27, 2010 ANSYS published this news release: The world's first commercial "flying car" will go the distance on both highways and runways next year when it rolls off the production line -- thanks, in part, to design optimization from ANSYS.

Terrafugia (Woburn, MA) used ANSYS(R) engineering simulation software to design and verify its new production prototype of the Transition(R) aircraft that also can drive on the highway, which was unveiled July 26, 2010 at the EAA AirVenture airshow. Terrafugia engineers conducted whole-vehicle airflow tests that assessed the effects of design changes on overall performance -- working in parallel across the various Transition components. The simulations were used to maximize wing lift in the air and to minimize the effects of crosswinds along the road.



"The Transition's test flights identified some important engineering issues that ANSYS fluid dynamics software helped us to address in the production prototype," said Gregor Cadman, an engineer at Terrafugia. "Our latest design improves both the in-air and on-road performance of the Transition, as well as ensures that the vehicle lends itself to full-scale manufacturing. Simulation software from ANSYS played a central role in these engineering efforts. Without the ability to work in a virtual environment, we would have had to construct complicated physical models, modify or rebuild them, and conduct hours of real-world testing, slowing down the process and adding significantly to development costs."

The Transition is the world's first vehicle to combine a lightweight, aerodynamic aircraft with the stability needed for long-distance driving on the highway. The vehicle can cruise up to 490 miles at over 105 miles per hour, can drive at highway speeds on the road, and is capable of transforming from plane to car in less than 30 seconds. The sophisticated design features foldable wings that span more than 26 feet, a rear-wheel-drive system for the road and a propeller for flight. Terrafugia's team of aeronautical engineers earned global attention when the Transition proof-of-concept vehicle completed a successful 60-second test flight in March 2009. The company expects to begin commercial production of the vehicle in 2011.


About Terrafugia

Terrafugia, Inc. (pronounced ter-ra-FOO-gee-ah) is the developer of the first street-legal airplane which pilots can fly between local airports and drive on any road. The start-up company has received worldwide media attention, including coverage by Forbes, Fortune, CNN, CBS and Fox News. Based in Woburn, Massachusetts, U.S.A., the company is composed of a team of award-winning engineers who have been advancing the state of personal aircraft since 2006. Founded by five pilots who are graduates of the Massachusetts Institute of Technology (MIT) and supported by a world-class network of advisors and private investors, Terrafugia's mission is the innovative expansion of personal mobility. Learn more at www.terrafugia.com.




AutoCAD 2011 Speeds Work, Saves Money for Design and Engineering Firms

On August 10, 2010 Autodesk, Inc . announced the results of an AutoCAD 2011 software Productivity Study. David S. Cohn Consulting of Bellingham, WA compared the productivity of AutoCAD 2011 to AutoCAD 2008 on typical AutoCAD design processes in a variety of industries. The consulting firm concluded that AutoCAD 2011 showed an average productivity improvement of 31% for users who upgrade from AutoCAD 2008 to AutoCAD 2011, and a 44% overall productivity improvement for users who upgrade to AutoCAD 2011 and Windows 7, while also upgrading to a new HP Z200 workstation.

“The results of the study were more dramatic than I expected -- after all, how much faster can you draw a line?” said Cohn, a widely recognized expert in the use of AutoCAD and president of David S. Cohn Consulting. “To test AutoCAD 2011, I selected eight designs, most of which I concluded would take a typical user anywhere from an hour to half to a day to complete. I saw dramatic improvements in overall productivity. It took 13 hours, 24 minutes to complete all eight designs using AutoCAD 2008, compared to 9 hours, 16 minutes to complete the same tasks using AutoCAD 2011.”

The consulting firm's study found that for typical drawings, the ease of access afforded by the user interface, together with new features and functionality, resulted in individual user productivity increases ranging from 15% to 94%.

Performance improvements documented in the study include:

David Cohn is a renowned AutoCAD expert with more than 25 years of hands-on experience as a user, developer, author and consultant. He has been benchmarking computer hardware and software since 1985, and has published hundreds of articles and reviews as a contributing editor to Desktop Engineering.




One of Cohn's many hobbies is photography, as his picture here of the Taj Mahal attests. Cohn is the author of more than a dozen books about AutoCAD. A licensed architect, Cohn was also one of the earliest AutoCAD third-party software developers, creating numerous AutoCAD add-on programs.

For more information, visit http://www.autodesk.com/productivity




Six (6) Dassault Systeme's End-of July 2010 News Highlights:

1. DS Outlined New Five-Year Financial Objectives at Capital Markets Day, June 15, 2010. DS publicly outlined its growth plan including targeting a 30% non-IFRS margin and the five-year goal to more than double non-IFRS EPS in comparison to 2009.

2. Dassault Systèmes Acquires Exalead, a Paris headquartered-company providing Search Platforms and Search-Based Applications (SBA) for consumer and business users. (On May 12, 2010 Dassault Systèmes (DS) had announced an OEM agreement with Exalead).





Every month, over 100 million people rely on Exalead for information search, access and reporting, including people in companies like Sanofi-Aventis and World Bank for business use, and Friendster, Lagardère Active and ViaMichelin for contextual consumer search.




Exalead provides the industry's only platform designed from the ground up to apply advanced semantic processing to Web-scale data volumes and usage. Exalead brings unique scalability, agility and usability to industries such as Banking, Retail, Publishing, Business Services, Life Sciences and Consumer Services where easy access to information is essential. The acquisition price was approximately €135 million.

3. DS Advances Systems Strategy with the Acquisition of Geensoft, a France-based company. Geensoft provides embedded systems development tools and professional services that help engineering teams in the aerospace, automotive, defense, energy, industrial automation, medical and transportation industries to more efficiently manage their engineering processes as well as design, verify and validate their model-based embedded systems applications. With Geensoft, the Company's V6 portfolio is expanded by adding the capacity to model and generate the entire vehicle control software system, allowing a validation loop by connecting the physical equipment with the digital mock-up. The purchase price was approximately €5.5 million.

4. DS launched V6R2011, the latest release of its PLM 2.0 platform as part of its Lifelike Experience strategy. The release includes new advances in collaborative creation with 874 new features, additional collaborative innovation enhancements, as well as an entirely new V6 Academia solution. It includes CATIA advancements in systems functionality and content, such as various automotive-focused Modelica libraries, as well as Lifelike Human and Lifelike Conveyor, two new DELMIA production solutions for enterprise resource modeling. SIMULIA V6R2011 delivers to designers the power of Abaqus technologies for complex assemblies. 3DVIA Composer continues to extend its competitive advantage in 3D lifelike technical publishing experience. V6R2011 also updates Dassault Systèmes' PLM Express offer with new key attributes for the mid-market. V6R2011 features new capabilities in collaborative innovation, extending the depth of ready-to-use solutions in its eleven target industries, including consumer product goods, fashion, high tech, aerospace & defense, and automotive. These ENOVIA-based solutions deliver a strategic foundation for all communities to participate in the product lifecycle online.

5. DS introduced Abaqus Release 6.10 from SIMULIA with New Multiphysics Technology.

In response to expanding industry demand for realistic simulation, the new release delivers more than 100 customer-requested enhancements for modeling, performance, usability, visualization, multiphysics, and core mechanics. Abaqus 6.10 introduces a new multiphysics capability for performing Computational Fluid Dynamics (CFD) simulation.

6. DS Has Launched Open Online DraftSight Community. DS has made available DraftSight.com, aimed at providing all computer-aided design (CAD) users access to new services and products to unlock valuable data stored in billions of DWG files. Building on Dassault Systèmes' vision of enabling social innovation, the launch of this community comes as a direct result of customer demand and marks the next step in bringing DWG file management and storage into an easy-to-use, online, service-oriented environment.





ESI Announces VA One 2010


On July 29, 2010 ESI announced “VA One 2010” in Paris. The software is a complete solution for simulating noise and vibration across the full frequency range and seamlessly combines Finite Elements, Boundary Elements, and Statistical Energy Analysis (SEA) in a single model. This new release includes over 80 major enhancements and is focused on improved methods for response diagnosis.

Diagnosing the response of a system is an important step in a vibro-acoustic analysis that can provide physical insights and help guide the design of various counter measures. The VA One 2010 release simplifies this process and includes advanced methods to be applied to this task. In particular, the Statistical Energy Analysis (SEA) module now includes functionality for automatic identification of dominant transmission paths (using advanced algorithms from Graph Theory), along with sensitivity analysis for quickly determining the key parameters that control the response. Furthermore, the low frequency Finite Element and Boundary Element modules include expanded functionality for panel contribution analysis to help identify key radiating surfaces.




VA One model of sound radiated by vehicle horn at 2kHz


The VA One 2010 release also includes functionality for calculating complex or coupled modes for any combination of Finite Element, Boundary Element, Poroelastic Element and SEA subsystems in a model. This new functionality is ideal for diagnosing damped resonances, particularly in open systems or for systems that contain foam and fiber noise control treatments.

"We are pleased to announce the release of VA One 2010”, said Dr. Phil Shorter, Director of Vibro-Acoustic Product Operations, ESI Group. “This release includes over 80 major enhancements across all modules and ensures that our users have access to state-of-the-art methods for vibro-acoustic analysis and design".

For more information, please visit: www.esi-group.com/products/vibro-acoustics




Continental To Standardize on PTC's Windchill® Platform for Global Product Development

On July 27, 2010 PTC announced that Continental had selected Windchill , PTC's PLM (product lifecycle management) solution, as its global standard for product development in its Automotive Group.

"PLM is a key component of our IT-Strategy, which aims at standardizing and harmonizing the IT landscape at Continental Automotive," said Ralf Brunken, CIO at Continental Automotive Group. "As a result of our assessment among several PLM vendors, we selected PTC's Windchill for its strong technological performance and for the company's value-oriented approach which both are critical when engaging in such a strategic and long-term partnership."

Continental will replace its existing PLM system and standardize its three automotive divisions - Chassis & Safety, Powertrain and Interior - on PTC's Windchill platform. The integral, web-based Windchill solution will be used as the worldwide PLM backbone for engineering change, multi-CAD data management, ECAD data management as well as for third-party integration, thus enabling seamless process integration and global collaboration. Windchill is ultimately expected to support more than 12,000 users in both engineering and non-engineering departments.




"In today's global economy, a PLM solution is mission critical for a company in the automotive industry," said Wolfgang Schaefer, CFO at Continental Corporation. "We expect PTC's Windchill solution to improve our engineering processes and product quality."

James E. Heppelmann, CEO-elect and president at PTC commented, "Shrinking margins, globalization, and increasing regulatory requirements have put strong pressure on the highly competitive automotive industry. In such an environment, companies have an intense need to optimize their business processes. We are thrilled that Continental has chosen Windchill to support this critical business initiative. In addition to providing world-class technology, our global service organization will support Continental in defining world-class engineering processes and introducing Windchill to the extended enterprise. We look forward to expanding our long-standing partnership with Continental."


About the Continental Corporation:

With sales of approximately €20 billion in 2009, Continental is among the leading automotive suppliers worldwide. As a supplier of brake systems, systems and components for powertrains and chassis, instrumentation, infotainment solutions, vehicle electronics, tires and technical elastomers, Continental contributes enhanced driving safety and global climate protection. Continental is also a competent partner in networked automobile communication. Continental currently employs approximately 138,000 in 46 countries.

The Automotive Group with its three divisions Chassis & Safety (sales of approximately €4.4 billion in 2009, 27,000 employees), Powertrain (sales of approximately €3.4 billion in 2009, 24,000 employees) and Interior (sales of approximately €4.4 billion in 2009, 27,000 employees) achieved sales of approximately €12 billion in 2009. The Automotive Group is present in more than 130 locations worldwide. As a partner of the automotive and commercial vehicle industry, it develops and produces innovative products and systems for a modern automotive future, in which cars provide individual mobility and driving pleasure consistent with driving safety, environmental responsibility and cost-efficiency.

The Chassis & Safety Division develops and produces electronic and hydraulic brake and chassis control systems, sensors, driver assistance systems, airbag electronics and -sensorics, washer systems and electronic air suspension systems. Its core competence is the integration of active and passive driving safety into ContiGuard®. The Powertrain Division integrates innovative and efficient system solutions for vehicle powertrains. The comprehensive range of products includes gasoline and diesel injection systems, engine management, transmission control, including sensors and actuators, as well as fuel-supply systems and components and systems for hybrid and electric drives. Information management is at the very heart of the Interior Division, which provides a range of products that includes instrument clusters and multifunctional displays, control units, electronic car-entry systems, tire-monitoring systems, radios, multimedia and navigation systems, climate control systems, telematics solutions and cockpit modules and systems.

For further information please visit: http://www.continental-automotive.com/




MSC.Software to Dramatically Improve Fatigue Offering to Help Customers Perform Durability Simulations

On August 12, 2010 MSC.Software announced its reinstated partnership with HBM nCode, a premier supplier of durability, test and analysis products.

HBM nCode solvers have powered MSC Fatigue, an FE-based durability and damage tolerance solver from MSC.Software that enables users with minimal knowledge of fatigue to perform comprehensive durability analysis.




As an example application provided on MSC.Software's web site, with the help of MSC Software Professional Services and products such as ADAMS/Durability and FE-Fatigue, John Deere Welland Works completed the design and testing of their new rotary cutter system within two weeks instead of several months. Thanks to the implementation of durability analysis, John Deere could reduce the number of the required physical prototypes and was able to try out several design concepts. As a result, the total development time on one cutter was reduced from four years to two, and John Deere is on track to produce another cutter in one year.

Today August 12, 2010 marks an important day for MSC customers as MSC.Software and HBM nCode have finalized an agreement to release a dramatically upgraded and improved version of MSC Fatigue to enable durability engineers to analyze data more rapidly and accurately.

"Through this partnership, our customers will be able to receive a vastly improved version of MSC Fatigue with timely upgrades on a regular basis," said Dominic Gallello, CEO, MSC.Software. "We are confident it will improve the experience our customers have with the software in reducing time to market and improving product quality."

Steve Tudberry, Vice President of HBM nCode Products, agreed. "MSC's customers will finally benefit from the next-generation capabilities our DesignLife customers have long enjoyed. We look forward to collaborating with MSC not only on the MSC Fatigue product but future products as well."

Please continue to visit www.mscsoftware.com for updates and release announcements for the new version of MSC Fatigue.

About HBM nCode:

Providing over 25 years of expertise in durability and data analysis, HBM-nCode products have been an important brand for providing solutions to understand product performance, accelerate product development and improve design to a broad range of industries. More information is available at www.ncode.com.

nCode is a brand of HBM, a worldwide technology and market company, offering products and services across large portions of the measurement spectrum, from virtual to physical.

About MSC.Software:

MSC.Software is a global supplier of multidiscipline simulation solutions that help companies improve quality, save time and reduce costs associated with designing and testing manufactured products. MSC.Software works with customers worldwide to develop better products faster with simulation technology, software, and services. MSC.Software employs 1,000 people in 20 countries. For additional information about MSC.Software's products and services, please visit www.mscsoftware.com.

The MSC.Software corporate logo, Simulating Reality, Adams, Dytran, Easy5, Marc, MD Adams, MD Nastran, Patran, Mentat, MSC, MSC.Masterkey, MSC Nastran, MSC Fatigue, Mvision, SimDesigner, SimManager, and SimXpert are trademarks or registered trademarks of the MSC.Software Corporation in the United States and/or other countries. NASTRAN is a registered trademark of NASA. All other trademarks belong to their respective owners.




Chrysler Group LLC Contracts with Siemens PLM Software for Product Design and Development Platform

On July 26, 2010 Siemens PLM Software, a business unit of the Siemens Industry Automation Division and a global provider of product lifecycle management (PLM) software and services, announced that Chrysler Group LLC, which produces Chrysler, Dodge, Jeep®, Ram Truck and Mopar® vehicles and products, had selected Siemens PLM Software's technology for product design and development.

Chrysler Group began using Teamcenter® software, Siemens PLM Software's digital lifecycle management solution, as its corporate-wide PDM system in 2008. Teamcenter provides a single source of product knowledge across a company, available at any time in any location during the product development process.

Chrysler Group has now added NX™ software, Siemens PLM Software's comprehensive digital product development solution, to provide efficiency gains in engineering and design and to help create a common product development platform.

“Integration of this tool will help to enhance our ability to collectively engineer new products with improved quality and faster time to market,” said Scott Kunselman, Senior Vice President - Engineering, Chrysler Group LLC.

“Chrysler's decision to replace existing solutions with NX and Teamcenter as its corporate-wide standard is a testament to our commitment to provide a robust, open PLM platform for the automotive industry,” said Tony Affuso, Chairman of the Board and Chief Executive Officer, Siemens PLM Software. “Siemens PLM Software is honored to partner with Chrysler to deliver a solution that enhances innovation and manages complexity, both of which are requirements for today's market.”




Siemens PLM Software's technology is used by automakers and suppliers to collaborate, plan, design and validate the development and manufacturing engineering of vehicles. The tools help satisfy the critical needs of automakers for managing collaboration across complex engineering functions and throughout the extended supply chain. By breaking down barriers between engineering functions, providing real-time access to information, and performing analysis and simulation, Siemens PLM Software is said to have delivered double-digit efficiency improvements.

About Siemens PLM Software:

Siemens PLM Software, a business unit of the Siemens Industry Automation Division, is a global provider of product lifecycle management (PLM) software and services with 6.7 million licensed seats and 63,000 customers worldwide. Headquartered in Plano, Texas, Siemens PLM Software works collaboratively with companies to deliver open solutions that help them turn more ideas into successful products. For more information on Siemens PLM Software products and services, visit www.siemens.com/plm.

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[1] Footnote: Virtually all US companies that have international operations, and any company whose HQ is outside the USA (e.g. Dassault Systemes, ESI Group, ARM Holdings plc, et al) encounter the need to express financial data in both GAAP as well as IFRS standard formats. Apparently, the world is moving more and more to merging the two accounting standards, with a definite bias toward IFRS.

(This is not to say that companies will totally abandon the use of non-GAAP or non-IFRS reporting when it suits their reporting presentation goals).

International Financial Reporting Standards (IFRS) have been affecting US companies for some time, whether through their business dealings with non-US customers and supply chains that use IFRS, or through their non-US subsidiaries' adoption of IFRS. If they have not done so already, US companies will feel the increasing effect of IFRS as key aspects of United States Generally Accepted Accounting Principles (US GAAP) and IFRS continue to converge. The US Securities and Exchange Commission's (SEC) roadmap for adopting IFRS recently called for adoption by 2014, although that date is of course subject to delay.

Despite such delay, the US government's acknowledgment of the need for a single set of high-quality global standards, in addition to the continuing globalization of capital markets, suggest that IFRS (not US GAAP) will eventually become the new global standard.

Most likely the end result will be a convergence of US GAAP and IFRS standards. In the meantime, many US companies and their investors will see, among other things, major changes in financial statements. The impact of the accounting changes caused by convergence will go beyond mere financial reporting. Tax policy, mergers and acquisitions, financial planning, systems requirements, and compensation structures are just some of the areas that will be affected. Get familiar with it; it's coming fast! And who ever said accounting was dry and boring?

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About the Author of this August 2010 MCAD/PLM/MCAE Commentary:

Since 1996, Dr. Russ Henke has been president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management consulting firm. The number of client companies for HENKE ASSOCIATES now numbers more than forty. During his corporate career, Henke operated companies sequentially on "both sides" of MCAE/MCAD and EDA, as a user and as a vendor. He's a veteran corporate executive from Cincinnati Milacron, SDRC, Schlumberger Applicon, Gould Electronics, ATP, and Mentor Graphics. Henke is a Fellow of the Society of Manufacturing Engineers (SME) and served on the SME International Board of Directors. He is also a member of the IEEE and a Life Fellow of ASME International. In April 2006, Dr. Henke received the 2006 Lifetime Achievement Award from the CAD Society, presented by CAD Society president Jeff Rowe at COFES2006 in Scottsdale, AZ. In February 2007, Henke became affiliated with Cyon Research's select group of experts on business and technology issues as a Senior Analyst. This Cyon Research connection aids and supplements Henke's ongoing, independent consulting practice (HENKE ASSOCIATES). Dr. Henke is also a contributing editor of the EDACafé EDA WEEKLY.

To obtain details on the "2010 Business Planning Tool Kit Promotion" from HENKE ASSOCIATES, which has been extended until December 2010, please click on the URL below and scroll to the last entry on that page:

http://www.henkeassociates.net


Since May 2003 HENKE ASSOCIATES has now published a total of ninety-two (92) independent COMMENTARY articles on MCAD, PLM, EDA and Electronics IP on IBSystems' MCADCafé and EDACafé. Further information on HENKE ASSOCIATES, and URL's for past Commentaries, are available at http://www.henkeassociates.net. March 31, 2010 marked the 14th Anniversary of the founding of HENKE ASSOCIATES.




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