PARIS—(BUSINESS WIRE)—July 27, 2006— Dassault Systemes (DS) (Nasdaq: DASTY) (Paris: DSY), a world leader in 3D and Product Lifecycle Management (PLM) solutions, reported financial results for the second quarter and six months ended June 30, 2006.
Second Quarter Highlights
-- GAAP total revenue up 29% to EUR 280.0 million; GAAP software
revenue up 32% to EUR 238.0 million; GAAP EPS of EUR 0.25
-- Non-GAAP total revenue up 32% to EUR 286.0 million (up 33% in
-- Non-GAAP software revenue up 35% to EUR 244.0 million, (up 36%
in constant currencies); excluding ABAQUS and MatrixOne,
Non-GAAP software revenue up 16% (17% in constant currencies)
-- Non-GAAP EPS up 12% to EUR 0.37 on operating margin of 24.5%
-- MatrixOne achieves break-even in first period following
-- Non-GAAP PLM revenue up 35% (36% in constant currencies)
-- DS raises 2006 EPS and constant currency revenue growth
objectives; reconfirms 2006 operating margin objective
Bernard Charles, Dassault Systemes President and Chief Executive
Officer, commented, "DS had a great second quarter, with revenue,
earnings and operating margin coming in above our objectives. Software
revenue increased 36% in constant currencies on broad-based strength,
with CATIA results providing a solid foundation. The strong
performance of our sales organization and partners, including IBM,
business partners and the SolidWorks channel, contributed to this
"We continue to see good dynamics for our business in Asia, where
revenues increased 49% in constant currencies for the second quarter.
In particular, the level of interest in PLM remains high in Asia and
we see this continuing as evidenced by record attendance at our major
user conferences in Japan and China in July.
"In summary, DS is very well positioned for growth in 2006 and the
coming years as the leading provider in PLM, which is mission critical
for product development performance and innovation. We have continued
to gain market share in the first half of 2006 and with our recent
acquisitions of both ABAQUS and MatrixOne we are further expanding our
addressable market. Working together with our customers and partners,
we expect to continue to extend the value PLM brings to multiple
Thibault de Tersant, Executive Vice President and CFO of Dassault
Systemes, commented, "MatrixOne is delivering on all of our
acquisition objectives. MatrixOne's performance exceeded our targets
and it is already at break-even in its first period of operation as a
part of Dassault Systemes. And our plans to achieve cost savings are
solidly on track."
Second Quarter Financial Results
Dassault Systemes completed the acquisition of ABAQUS, Inc. in
October, 2005 and MatrixOne Inc. in May, 2006 and has accounted for
these acquisitions pursuant to U.S. GAAP (hereinafter GAAP) purchase
accounting rules. Certain supplementary information is provided in
this press release which is not in conformity with GAAP. See tables
for a reconciliation of 2006 and 2005 second quarter and six month
GAAP and Non-GAAP financial data.
GAAP Revenue Discussion
Revenue growth reflected broad-based strength across DS software
applications. GAAP total revenue increased 29% to EUR 280.0 million
for the 2006 second quarter, compared to EUR 217.3 million in the
year-ago quarter. GAAP software revenue increased 32% to EUR 238.0
million in the recently completed quarter.
Service and other revenue increased 15% to EUR 42.0 million in the
2006 second quarter, compared to EUR 36.4 million in the 2005 second
Non-GAAP Revenue Discussion
In the 2006 second quarter, total revenue increased 32% to EUR
286.0 million and increased 33% in constant currencies compared to the
year-ago period on strong growth in software revenue. Software revenue
in the 2006 second quarter increased 35% to EUR 244.0 million and
increased 36% in constant currencies. Excluding ABAQUS and MatrixOne,
software revenue increased 17% in constant currencies on broad
strength. In the 2005 second quarter, software revenue was EUR 180.9
million. Software and service revenue represented 85% and 15%
respectively of Non-GAAP total revenue in the 2006 second quarter. New
CATIA and SolidWorks seats licensed increased 15% to 20,485 seats in
the 2006 second quarter, compared to 17,755 in the year-ago period.
For the 2006 second quarter, PLM revenue increased 35% to EUR
229.9 million, and increased 36% in constant currencies, up from EUR
170.7 million in the year-ago quarter. ENOVIA revenue increased 88%
and 90% in constant currencies, and excluding MatrixOne, ENOVIA
revenue grew 19% in constant currencies. Underlying the strong growth
of PLM was CATIA, with a good level of activity. In particular, CATIA
seats licensed increased 12% to 9,100 in the 2006 second quarter.
ABAQUS had a solid quarter with revenue of EUR 23.2 million and
MatrixOne's revenue totaled EUR 17.8 million, both before the impact
of the deferred revenue write-downs required under GAAP purchase
accounting treatment. ABAQUS and MatrixOne software applications are
included in PLM results.
SolidWorks revenue increased 20% to EUR 56.1 million and increased
22% in constant currencies in the recently completed quarter, compared
to EUR 46.6 million in the 2005 second quarter. SolidWorks seats
licensed increased 19% to 11,385 licenses for the second quarter.
From a regional perspective, 2006 second quarter revenue in Europe
increased 35%, in the Americas it increased 20% (19% in constant
currencies) and in Asia, revenue increased 42% (49% in constant
Operating Income and Margin and EPS
GAAP earnings per diluted share decreased 22% to EUR 0.25 in the
2006 second quarter, compared to EUR 0.32 in the year-ago period. GAAP
operating income decreased 9% to EUR 49.7 million (17.8% operating
margin) in the 2006 second quarter, compared to EUR 54.7 million in
the 2005 second quarter (25.2% operating margin).
Non-GAAP earnings per diluted share increased 12% to EUR 0.37 in
the 2006 second quarter, up from EUR 0.33 in the 2005 second quarter.
Non-GAAP operating income increased 27% to EUR 70.2 million in the
2006 second quarter, compared to EUR 55.2 million in the year-ago
quarter. The Non-GAAP operating margin was 24.5% in the 2006 second
quarter, ahead of the Company's stated objective. This was a solid
performance compared to the Non-GAAP operating margin of 25.4% in the
year-ago quarter, given the dilution from recent acquisitions.
Other financial highlights
Net operating cash flow was EUR 63.7 million and EUR 164.9 million
for the second quarter and six months ended June 30, 2006,
respectively. At June 30, 2006, cash and short-term investments
totaled EUR 473.5 million and long-term debt was EUR 202.9 million. In
May 2006, DS finalized the acquisition of MatrixOne Inc. for an all
cash purchase price of $410 million in aggregate, before reflecting a
cash balance of US$93 million and estimated tax benefits.
Second quarter customer highlights included, among others:
-- In a separate press release today, DS is announcing that
Airbus is standardizing product development processes on CATIA
and ENOVIA VPLM for all new programs.
-- In a separate press release today, DS is announcing that Ford
Motor Company has extended its multi-year contract, which
designates CATIA V5 as the global design and engineering
standard for all new vehicle and powertrain systems
-- New PLM wins and reorders included Legrand in E&E (electrical
and electronics), Viking in Consumer goods, Mecasonic and
Tokyu Car in F&A, the Quai Branly Museum, Keylex in Automotive
and Kaji Metal in Aerospace.
-- ENOVIA MatrixOne closed 18 transactions in the Semiconductor
sector, including significant orders from Qualcomm and Agere,
and expanded its presence in the apparel sector with Luxottica
-- SolidWorks wins included Fuji Xerox Co. in E&E in Japan, and
in F&A, Comact Equipment in Canada, Hoffman Enclosures in the
United States, Knipex in Germany and Metal Saur in Brazil.